Rental Rehabilitation Loan Program
The purpose of the Rental Rehabilitation Loan Program is to preserve existing affordable rental housing options in Saint Paul. Eligible properties include occupied single-family, duplex, triplex or fourplex rental buildings currently classified as C or D by the Department of Safety and Inspections (DSI), or classified as A, B, C or D in ACP50 priority areas.
The Metropolitan Council defines Areas of Concentrated Poverty (ACPs) as census tracts where 40% or more of the residents have family or individual incomes that are less than 185% of the federal poverty threshold. To identify areas where people of color experience the most exposure to concentrated poverty, the Council further differentiates Areas of Concentrated Poverty where 50% or more of the residents are people of color ACP50s.
The Department of Planning and Economic Development (PED) has reserved up to $750,000 to be distributed to responsible landlords desiring to upgrade their current property classification by making property improvements that increase the safety and quality rental units.
- have a valid Certificate of Occupancy
Eligible properties are highlighted in orange on the map below.
Loan Limits and Term Length
- Up to $30,000 per building
- Amortized quarterly over 10 years
- 0% interest
- Distributed on a first come, first served basis until the program's complete fund of $750,000 has been distributed.
In order to help preserve our city’s affordable housing options, participating landlords must not increase rents of the assisted units by more than 3% per year while remaining at, or below, the HUD Fair Market Rents for the entirety of the Loan term. More information is included in the “program policies” document.
Please be aware of the following if you plan to apply for a loan from the Rental Rehabilitation Program:
- If you are awarded a loan, DO NOT permit your contractors to start work on your property prior to loan closing. Work started before loan closing is not eligible for funding.
- Rents of the assisted units will be restricted to no more than a 3% yearly increase while also remaining at or below Fair Market Rents (less tenants paid utilities) for the duration of the loan term.
- The loan will be due in full if the borrower sells, transfers the title, or fails to comply with any of the other program requirements as defined in the loan documents.
- After the completion of the project, the property must meet the minimum rental housing standards as confirmed by annual inspections.
- Through the duration of the loan term, the property must not be down graded by DSI.
Applicants are considered eligible to receive funding if they meet the following criteria listed on page 3 of the Program Policies.
Eligible Uses of Loan Funds:
Projects that would qualify for funding by the Rental Rehabilitation Program include, but are not limited to:
- Improvements made to increase the livability and/or curb appeal of the property.
- Improvements made to comply with ADA and Health and Safety regulations, including lead hazard reduction.
- Landscaping work including ground cover (correcting poor grade around the foundation walls as a result of damage done by water infiltration.)
- Limited professional services related to the improvements.
Ineligible Uses of Loan Funds:
- Projects that include updating or adding appliances, furniture, hot tubs, whirlpools, baths, saunas, or other personal items;
- New construction of decks, patios, sheds, fences, or other outbuilding;
- Refinancing and working capital; and
- Only cosmetic landscaping, such as trees, shrubs and sod.
For more information on eligible and ineligible uses of program funds, please see page 3 of the Program Policies.
Application Process and Checklist
Please note that some elements, like the written and signed referral letter from your District Council, may take some time, so plan accordingly as you are completing your application.
PED will notify applicants of their decision within 30 days of receiving their application. If the application is accepted, a commitment letter of funding will be provided to the applicant. A loan closing will also be scheduled with the applicant. He or she will be required to sign a note, mortgage loan agreement and other documents with the City prior to commencing improvements. Other than for architectural designs, project expenditures made prior to the execution of a loan agreement are not eligible for reimbursement.
In order to provide your project with the best possible chance to receive funding, please make sure you have all the necessary documentation included in your application packet.