Loans

Residential Rehabilitation - Forgivable Loan Program
The purpose of the Community Development Block Grant Housing Rehabilitation Program is to provide financial assistance to low- and moderate-income families for repair of their houses to make them decent, safe and sanitary.

The U.S. Department of Housing and Urban Development (HUD), through the Community Development Board, administers a program for financing the rehabilitation, improvements and repair of owner-occupied property.

The program is administered for the City of Waterloo by the Community Development Board. Funds for the program are provided by the Federal Housing and Urban Development Community Development Block Grant funds as authorized by the Housing and Community Development Act of 1974. Funds for housing rehabilitation under the Block Grant Program will be allocated by the City Council on a year-to-year basis.

Assistance is available to homeowners in the form of a Forgivable Loan. The basic requirements of a Forgivable Loan are as follows:

  1. The applicant must be the owner –occupant of the housing unit for one year and reside in the property for at least one year.

  2. The applicant must be the deed holder of the property as evidenced by the Black Hawk County Recorder Real Estate Assessment and Tax Information document.

  3. The property must be a single family (1-4 unit as defined by HUD) residential property and within the city limits of Waterloo.

  4. Applicants must have gross household income less than 80% of the area median income adjusted by household size using the HUD guidelines.

  5. All liens, delinquent taxes and assessments against the property must be paid and hence must have insurance.

  6. The property must obtain flood insurance if it is located in the 100 year flood zone.

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A Forgivable Loan is not repayable unless you sell or move from your home during the five years after the loan is approved. This loan will be forgiven on the following basis:

If you sell your home:

You payback:

During 1st year after the Forgivable Loan -

100%

During the 2nd year - 

80%

During the 3rd year -

60%

During the 4th year

40%

During the 5th year

20%

In other words, if you retain ownership of your home and continue to live in it for five years, the total amount of the Forgivable Loan will be canceled and you owe nothing. The maximum amount that can be given on a Forgivable Loan is $25,000. If the cost of rehabilitation of a property is more than that amount, the property owner has the option of providing the difference. Otherwise the house will be considered infeasible and no assistance offered.

Program policy prohibits any activity from being conducted in a Special Flood Hazard Area (SFHA). This shall include Housing Rehabilitation and Emergency Repairs as well as, Down payment Assistance and Tenant Based Rental Assistance and all other eligible uses for Community Development Block Grant and HOME Funding.”

Program policy shall exclude any activity where the Iowa SHPO does not concur with the RE’s determination, however, if the SHPO fails to respond within their 30 day comment period and waives its opportunity to comment, the activity can proceed to the next step in the process based upon the agency’s finding and determination.

The most frequently asked questions and their answers are as follows:

Q. WHERE DO YOU APPLY FOR ASSISTANCE? 
A. Call the Community Development Office at 291-4429 or come to Carnegie Annex, Suite 202, 620 Mulberry Street.

Q. WHAT IS A REHABILITATION FORGIVABLE LOAN? 
A. It is a Forgivable Loan made from Community Development Block Grant funds to rehabilitate and improve properties within the City limits. If an owner retains ownership and lives in the house for five years, the loan is totally forgiven.

Q. WHAT IS THE MAXIMUM AMOUNT OF A FORGIVABLE LOAN? 
A. The amount needed to rehabilitate the property, up to a maximum amount of $25,000.

Q. CAN THE PROPERTY BE LOCATED ANYWHERE? 
A. To be eligible, the property must be located within the City limits and must not be scheduled for acquisition by the City or Community Development Board or be in the 100 year flood plain.

Q. MUST THE OWNER LIVE IN THE PROPERTY? 
A. The owner must live in the property that is to be rehabilitated for at least one year.

Q. WHAT KIND OF WORK CAN BE DONE? 
A. That work needed to bring the property up to a decent, safe and sanitary condition. Structural, safety, mechanical, energy efficiency and exterior items will be addressed.

Q. WHO DECIDES WHAT WORK IS NEEDED? 
A. Inspectors will inspect your property. A Rehabilitation Specialist will advise you as to what work is eligible under this program.

Q. WHO WILL DO THE WORK? 
A. A Rehabilitation Specialist will assist you in obtaining bids from reliable contractors and will assist you in contracting with the lowest acceptable bidder. If you have a qualified contractor that you would like to recommend, he/she can also bid on the work.

Q. WHO WILL INSPECT THE WORK? 
A. A Rehabilitation Specialist will monitor the work to insure that it is done in a proper and workmanlike manner.

Q. WHAT SHOULD I DO IF I HAVE QUESTIONS CONCERNING THE PROGRAM OR THE WORKMANSHIP OF THE WORK BEING DONE ON MY HOUSE? 
A. You should contact the Rehabilitation Specialist who is assigned to your case. The Community Development Board has prepared a Grievance Procedure to assist you, which will be given to you during the pre-construction conference.

Q. WILL A LIEN BE PLACED ON MY PROPERTY IN THE CASE OF A FORGIVABLE LOAN? 
A. A mortgage will be recorded stating that if the property is sold within five years a prorated amount will be owed. After five years this mortgage will expire and the loan is forgiven. Remember, when you are approached by a person representing the Community Development Office, be certain to ask for identification. For your own benefit and protection, record their name, title and other pertinent information.

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