Jan. 28—NORTHPORT — The first thing Kelly Kehl wants to do after she and husband John move into their home in Northport is paint the walls.

Having never rented where she was allowed to do so, she’s “super excited” about the possibility, whereas John wants to finish the basement for a band rehearsal space to start rocking.

They’ll move into their home Saturday, becoming the first successful home buyers from the community land trust called Peninsula Housing.

“We’re very happy and excited, and we hope that … maybe this will spark a fire with the housing market in this area for more people that are working class to be able to continue to live up here, or come back,” Kelly said.

Larry Mawby is Peninsula Housing’s board president, and the retired winemaker said the couple got a $220,000 mortgage for a house that cost the community land trust about $400,000 when factoring in the repairs and other investments.

That’s an affordable price for a household earning 80 percent of Leelanau County’s area median income — the nonprofit figures that at about $79,000.

To keep the price in such a hot real estate market that low, Peninsula Housing tried something different: splitting the home from the property, then leasing the property to the Kehls for $60 a month, Mawby said. Half of that monthly payment goes into a repair fund the couple can use to maintain the home, while the other half supports the community land trust’s operations.

The 89-year lease comes with rules, including requiring the Kehls to pay property taxes for the home and parcel, Mawby said. While the community land trust is tax-exempt, state law prevents the land under the home from falling under that exemption because Peninsula Housing is charging for the lease.

Lease terms also require the Kehls to maintain the home, and get Peninsula Housing’s OK for any additions, Mawby said. The nonprofit likely won’t agree to anything that adds significant value to the home — say, adding another bedroom and bathroom — because that could make it unaffordable to the next owner.

Plus, the Kehls agreed that if and when they sell the house, Peninsula Housing gets the first right of refusal, and the Kehls get 25 percent of the appreciated value on top of the original purchase price, Mawby said. That will be determined by comparing the appraised value at the future sale versus its appraisal when the Kehls bought it.

That agreement acts as a price cap of sorts on future sales, and the remaining 75 percent of appreciated value stays with the home, according to Mawby.

“It’s not as good a deal as if they could just buy a house in the first place, but the point is they can’t afford to,” he said. “It’s a much better deal than being a renter where the rental payment is just going to the landlord, it’s just going out of your pocket and you’re never going to see anything back.”

Kelly said she’s heard and read lots of negative remarks on the land lease aspect, and agreed it’s no better or worse than similar restrictions on other homes — a condo or a homeowners association, say.

An attorney not connected to Peninsula Housing helped the Kehls understand the ins and outs of the agreement, John said. Peninsula Housing required as much.

The Kehls have been married for six years, and Kelly said she’ll be ending her 20-year stretch of renting. She dreamed the couple would own their own home someday, but that dream faded as they looked at houses they either couldn’t afford, or which were quickly bought — often with cash.

John credited Realtor Hillary Voight for pointing them to the house and Peninsula Housing. From there, the couple went through Northwestern Michigan Community Action Agency to qualify for the purchase. That included filling out some paperwork and taking homeownership classes.

Getting a mortgage was tricky, but Neighborhood Lending in Traverse City figured it out, John said.

The Kehls’ blue house in Northport is just the start, Mawby said. Peninsula Housing bought a duplex in Lake Leelanau from an owner who kept rents low and wanted them to stay that way. HomeStretch Nonprofit Housing is managing that rental through a partnership that Mawby said he hopes could be the first of several as opportunities arise.

Peninsula Housing also has a house in Suttons Bay for which a couple is working on a mortgage, Mawby said.

The community land trust also has a design charrette coming up at the end of April for 10 acres of land it owns outside of Suttons Bay, Mawby said. The parcel, off South Herman Road west of Herman Park, could be the site of dozens of new homes and the nonprofit wants public buy-in for whatever project Peninsula Housing pursues there.

“We want to get as much public input so we can get something that really fits the community, that minimizes the unhappiness of the people that are going to be unhappy with this, and maximizes the happiness of the folks that want to see affordable housing,” he said.

It’ll be some time before that project can launch — Mawby said the nonprofit will have to find millions in gap financing to cover whatever a loan won’t pay for, and Suttons Bay Township Zoning Administrator Steve Patmore said the township is working on a zoning rewrite that could change the property from agricultural to neighborhood residential.

Mawby said the nonprofit is exploring numerous possible ways to finance the project, including building it in phases over several years.

“All the possibilities are on the table,” he said.