Funds available to rehabilitate homes, businesses, rental units

People interested in making improvements to residential or commercial properties are urged to apply for funding through the Small Cities Development Program.
The city of Luverne was approved for a state grant of $941,760 for housing and commercial building rehabilitation in certain targeted areas of Luverne.
Luverne Economic Development Director Holly Sammons was instrumental in securing the grant for the city, and she updated members of the LEDA at their Monday morning meeting.
She said the goal is to complete 21 residential rehab projects in Luverne, nine rental (commercial, not single family rental) and 15 downtown commercial projects.
So far, there are 14 residential, two rental and seven commercial applications for grant funding.
The program opened to applicants last summer, and the expiration date is Dec. 31, 2016.
“So we’re about halfway there and we’re halfway through our grant cycle,” Sammons said about the timeline and the number of applicants.
She said a shortage of available contractors is presenting a challenge in the application process.
“People are applying, but they’re having trouble finding contractors who will bid the project,” Sammons said. “That’s good news for contractors, because there’s a lot of work out there for them, but we’re supposed to have three bids on these projects, and we’re having trouble getting only one.”
She said she’s been able to arrange for waivers for some applicants in order to move their projects along with only one or two contractor bids.
The funds are for rehabilitation of commercial, rental and residential properties in targeted neighborhoods of Luverne.
The funding would cover 35 percent of projects in the form of grants, 35 percent in low-interest loans and 30 percent owner equity for commercial projects, and up to 70 percent in grants for residential and rental projects.
To help offset out-of-pocket costs for the homeowner contributions, the city of Luverne will fund an additional $2,750 grant to each qualified applicant.
To illustrate the offer, Sammons said a qualifying resident with a $10,000 home improvement project could end up paying only $250 out of pocket through the rehab program.
For example, 70 percent of the project, or $7,000, could be financed through a loan forgiven over a 10-year period, and the remaining 30-percent equity contribution, or $3,000, would be covered by the $2,750 grant from the City and $250 cash contribution from the applicant.
The maximum amount a resident could receive is $25,000, but if 21 are approved, the average amount would be $18,200. The average commercial award would be $25,000, which is structured as half grant and half loan. The average award for rental units is $7,000 per unit.
The residential home owner target area includes all homes within an area bordered on the north by  the north side of Lincoln Street, on the east by the west side of NE and SE Park Street, on the south by the south side of Warren Street, and on the west by the east side of S. Davidson Street and the west side of N. Davidson Street.
The downtown commercial and rental target area for the grant is one block on either side of Main Street east of Highway 75 to Blue Mound Avenue and one block south of Main Street on the west side of the highway.
The target rental properties will primarily be the second-story apartments above commercial properties on Main Street.
Completed applications are taken on a first-come, first-served basis, and final complete applications are served in the order they are received.
Details about the rehab program are on the city of Luverne website, cityofluverne.org.