Rental Rehab Programs (Citywide)
Funding is available for market rate rental properties.
The purpose of this program is assist rental property owners improve the livability or energy efficiency of their rental properties in Hutchinson with a 5 year loan at prime minus 1 percent interest rate.
- Eligible improvements include, alterations, renovations, and/or repairs, or to bring a property into compliance with state, county, municipal health, housing, building, fire and/or housing maintenance codes or other public standards applicable to housing. See the Eligible Improvements List for examples of allowed improvements.
- Funds are limited. Applications will be prioritized on a first-come, first served basis. This basis is dependent on the completion of the full application packet.
- A repayment agreement will secure HRA loan funds.
- Two itemized bids must be submitted. No HRA inspections will be done but the owner/contractor will be required to get a Building Permit from the city and follow that process*.
- Minimum loan $5,000.
- Maximum loan amount is $24,000 for a single family property; $15,000/unit for multiple unit properties up to 7 units.
- Rental property is within the city limits of the City of Hutchinson.
- Applicant must have ownership interest in the property.
- Owner has to have good credit, financially secure and be able to make payments (personal guaranty need for Corp., LLC, LLP or LP)
- No judgement/liens can be recorded against the property.
- must be current on mortgage payments and property taxes.
- Have property insurance to cover all lien amounts.
- Registered with the City of Hutchinson Rental Registration Program
Paid Administration Fees & Closing Costs:
$350 – loan application fee, paid to the HRA
$50 – document preparation paid to the HRA
$46 – McLeod County recording fee
Actual cost of O & E report from a title company
Actual cost of Credit report with FICO scrore from Equifax, TransUnion or Experian
*This loan program addresses only limited eligible work items requested by the homeowner that are subject to the City of Hutchinson’s building permit. Only a building permit inspection for the specific work item will be performed. The HRA and City of Hutchinson will not perform a full house inspection and is not responsible for any other code issues that may be present.
Taking applications for the waiting list for rental properties that meet rent and tenant restrictions.
- Funds are limited so applicants will be prioritized on a first-come, first served basis. This basis is dependent on the completion of the full application packet.
- Contract for Deed is not an eligible form of ownership for the RRRP.
- Program Requirements include that an adequate number of units be occupied by low-moderate income (LMI) households at affordable rents (Rent minus the tenant paid utility allowances listed on the back). Buildings proposed for participation must meet the following minimum requirement: 51% of the units (50% in the case of a duplex) must be occupied by an income qualified household (see below) who rents are at or below the rent rate for McLeod County (see below).
- During the five-year compliance period rents should not be increased.
- The work that can be done with the RRRP dollars are generally limited to repairs or replacement of existing, deteriorating exterior features such as windows, doors, roofs, furnaces, energy improvements and to correct building code violations. No “remodeling” can be done with the RRRP funds. However, handicap accessibility improvements are allowed.
- Owners may be eligible for up to $15,000/Unit. Repayment at follows:• 50% will be forgiven after 5 years of meeting the affordability criteria (deferred grant).
• 50% will be a 0% interest loan – principle repayment.
- A repayment agreement will secure RRRP loan funds for a 5 year period. After 5 years, if all grant requirements are met, 50% will be forgiven. If the owner sells or transfers the property during that 5 year period, the deferred grant and the 0% loan balance must be repaid.
- The property owner must provide any of the construction costs needed above the maximum RRRP funds.
- The rehabilitation process must be coordinated through the Hutchinson Housing & Redevelopment Authority (HHRA) and competitive bids from MN licensed contractors with insurance must be received for the work. Any work done before coordinating with the HRRA will not be eligible for SCDP funding.
2018 Income Limits for McLeod County
2018 Rent Limits for McLeod County