HOUSING REHABILITATION LOANS

The City of Jackson offers lower income eligible homeowners and rental property owners a variety of loans for the repair of residential properties located in the City of Jackson.  These are designed to make repairs affordable and bring the property up to code.  The loans are from state and federal sources and have interest rates from 0% to 8%.  The receipt of applications is dependent upon the availability of funds and other program factors. The following is a general description of each program.

 Emergency Hazard Loan: This loan is used to repair emergency hazardous systems, including furnaces, electrical, roofs and other cited building systems to city standards in owner occupied properties containing no more than two units.  All hazards must be corrected.  The maximum loan is $10,000.  Only owners whose household income is no more than 50% of the area median may be eligible.

 Exterior Only Code Enforcement*: This program is used to correct exterior code violations, and interior hazardous conditions as cited under the Exterior Code Enforcement Program.  Loans of up to $20,000 can be obtained for the repairs.  Only properties with two or fewer units may be eligible.

 Deferred Loan*: This loan is used to repair City code violations and violations that will soon occur in owner occupied properties with no more than two units.  The maximum loan is $20,000.  Household income can be no more than 80% of median income as defined by HUD.

 Deposit Loan*:  This provides a 15 year mortgage when used with a Title 1 loan and has a 20 year term when used with a conventional mortgage.  The maximum amount available is $25,000. Household income can be no more than 80% of the area median income as determined by HUD.  Interest rates are from 4%, to 8% and are determined by income.  This loan can be used to repair code violations, items that will soon be code violations and make limited general repairs.

 World Changers: World Changers, an outreach program of the Northern American Mission Board of the Southern Baptist Convention, stresses hands-on volunteer youth involvement in building community through home construction and renovation work. The City of Jackson has been fortunate to have hundreds of supervised volunteer youth come to Jackson each year from all over the country.  Their work typically includes roofing and exterior carpentry and painting. Materials are provided by the City.

MSHDA PIP Loan*: The Michigan State Housing Development Authority (MSHDA) offers a Property Improvement Program (PIP) Loan of up to $25,000 administered by the City of Jackson.  The interest rate is based on household income and can range from 1% to 8%.  The maximum household income is $54,750 and the applicant’s debt to income must be less than 45%.  The loan can be used to repair code violation, incipient violations and general improvements on owner occupied and owner occupied rental properties. For non owner occupied rental units, the loan amount available depends upon the number of units. This loan is offered by some banks for non-owner occupied rental units.

So What Should I Expect If I Apply For A Loan?

Here are the steps to be taken:

•  Call 788-4060 for an application

•  Applicant financial interview is conducted

•  Property is inspected and results sent to the applicant

•  Repair bids are requested from three contractors

•  Scope of project reviewed with applicant, inspector and financial assistant

•  A contractor agreement is prepared for review and adjusted if needed

•  Loan closing is conducted and mortgage documents are recorded

•  Construction contract is signed and contractor obtains needed permits

•  Contractor performs work

•  Completed work is inspected, contractor waivers of lien are obtained, owner signs for acceptance of work and contractor is paid

Want to learn more about these programs or if one can satisfy your needs?  Call us at 768-6407.

 *  The federal government requires the elimination of lead hazards in properties repaired with these loans.  The cost of eliminating lead hazards is treated as a forgivable loan, with 20% of the cost forgiven each year over a five year period.  The owner must use the home as their primary residence during this period.