Minnesota Housing Finance Agency (MHFA) – Rehab Loan
This is a deferred loan with no interest or monthly payments until such a time you sell, transfer or move from the property. On the 16th year, this deferred loan is forgiven.
- Maximum loan amount is $27,000
- Maximum loan term is 15 years for properties taxed as real property and 10 years for mobile/manufactured homes taxed as personal property located in a mobile home park.
- Can be used for rehabilitation of single-family homes, town-homes and condominiums constructed after January 1, 1978, and manufactured housing taxed as real or personal property.
- All loans are forgiven if the borrower does not sell, transfer title, or ceases to occupy the property during the loan term.
Eligible Home Improvements
Basic improvements to the livability, accessibility, energy efficiency and addressing lead paint hazards are eligible. Electrical wiring, furnace replacement, plumbing and septic repairs are just some of the possible repairs.Download Application (PDF)
Eligibility Requirements for Loan
- Owner occupies the property to be rehabilitated
- Owner does not have assets that exceed $25,000
- Owner meets the following income limits
Size of Household – Income Limits
- 1 Person: $18,100
- 2 Persons: $20,600
- 3 Persons: $23,200
- 4 Persons: $25,800
- 5 Persons: $27,900
- 6 Persons: $29,900
- 7 Persons: $32,000
- 8 Persons: $34,000
Small Cities Development Program (SCDP)
This program provides financial assistance for low to moderate income individuals who are residing in substandard housing. This program also encourages the improvement of the general appearance and value of the housing stock while making a visible and substantial improvement in the quality of life and appearance of the community. Small Cities Development program also offers financial assistance to commercial and rental property owners. This program can provide upgrades to properties, helping them to meet code requirements and design standards.
*Commercial and Residential SCDP Grants are awarded annually to cities who have submitted applications.
- Eligible Units: Single-family homes, commercial, or rental units (depending on the grant). Mobile homes are not eligible.
- Ownership: The applicant must own or be purchasing a property within the targeted area of the project. Ownership of property also includes life estates and Contract for Deeds, as long as the CFD vendors and the Life Estate remainder SCDP pagemen fall under the income guideline as well. Trusts are not eligible.
- Occupancy: The home to be improved must be the applicant’s principal place of residency. The applicant must live in the home a majority of the year.
- Eligible Repairs: Repairs that are permanent and necessary are eligible. Examples include roofing, foundations, siding, heating units, electrical, plumbing, and other health and safety items. Additions are not allowed.
- Real Estate Taxes & Property Insurance: An applicant must be current with their real estate taxes and the home must be insured while the loan is in place in order to receive a Housing Repair Loan.
The loans will be loaned as 0% deferred loans. This deferred loan requires no monthly payments, no interest will accrue and it will revert into a grant if the property does not change ownership within the time specified in the grant guidelines. With the exception on life estates, which have no descending forgiveness.
- Average Loan: Average loan amount depends on the grant. Usually 70-80% grant funds and 20-30% owner match for project funding. UCAP will assist in determining the match and other resources that may be available to fund the match, if applicable.
- Income: Income guidelines for homeowners are determined by HUD section 8 and are based on 80% area median income. There are no income guidelines for commercial projects. Rental projects have different income rules.
- First-Come-First-Serve: Applicants are served on a first-come-first-serve basis, with the exception on waitlist criteria.
- UCAP will inspect the property, identify any housing problems, and will work with the applicant to determine what repairs should be done. LEAD RULES AND REGULATIONS DO APPLY.
- The homeowner will select the contractor from a list of UCAP approved contractors that they would like to bid on their project and bid packets will be distributed to these contractors.
- The owner shall enter into a repayment agreement with the City to accept the conditions of the loan. The repayment agreement will be filed at the County Recorder’s Office.
- Construction time length averages 90 days (contingent on favorable conditions).
- Upon project completion, a final inspection will be done and the project will be closed.
Current SCDP Projects
City of Lakefield
City of Fairfax
City of Fulda
City of Westbrook:
- Target area has opened up city-wide
- SCDP Income Guidelines for Westbrook (PDF)
City of Mountain Lake
- Closing December 2016
For more information please contact:
[P] 507-537-1416 ext 2134
[E] Email Lleni
[P] 507-537-1416 ext 2140
[E] Email Jeff