Single Family Home Rehab Loan

Major Features of the Loan

• Loan amount is up to $25,000. The loan is secured by a deed of trust on the property.
• Person receiving the loan owns and lives in the home to be repaired.
• Owner's household income is low income, or up to moderate income in target areas.(See below)
• The loan is paid back at the time of sale or transfer of the property, or if the property is no longer owner occupied.
• Interest is charged at a rate of 0 - 4% per year depending upon income level (see Interest Rate Table), for up to 10 years. The interest is deferred (not paid back) until the principal amount is repaid.
• There are no fees paid up front.
• City staff assists with preparing the work specifications and overseeing completion of the work by the contractor.

Type of Rehabilitation or Fix Up Work Covered by the Program

• Major systems repair or replacement, including heating and air conditioning, electrical and plumbing work.
• Safety improvements, such as GFI outlets and replacement of broken or inoperable windows.
• Exterior improvements including painting, siding, roofing, etc.
• For additional eligible improvements see List of Work Covered by Program.

Income and Other Financial Limits

• Available to low income households whose gross total household income (before taxes and deductions) is 80% of median income or below. (Available in target neighborhoods to moderate income households whose gross total income is less than 120% of median income.) See Low and Moderate Income Table.
• Owners may still qualify even if they have a mortgage loan on the property. In general, the value of all loans secured by the house should not exceed 100% of the value of the house. Exceptions will be considered.
• Credit is generally not an issue, however all utility bills, property taxes, and mortgage payments should be paid up to date.

Cost of the Loan and How it is Paid Back

• There are no monthly payments paid on the loan as long as the homeowner continues to own and live in the house. When the house is sold, no longer owner-occupied, or ownership is transferred (and sometimes when the home is refinanced), the principal amount of the loan and interest due is paid back to the City.
• A loan of up to $25,000 to cover the cost of repairs and closing costs is made by the City to the homeowner. The homeowner does not receive any cash. Funds are paid directly to the contractor with the homeowner's approval.
• Interest rates are charged per year, for up to 10 years. Interest is deferred. It is paid only when the loan is paid off. Interest rates are described in the chart below. They vary from 0% - 4%.
• Closing costs are approximately $400 and are included in the loan amount. They are not paid up front. Costs are disclosed in writing before any agreements or contracts are signed.

Steps To Complete a Single Family Rehabilitation Loan Project

1. Submit an application to CD&H staff. The homeowner's application is determined to be eligible or qualified for the program by CD&H staff.
2. The homeowner works with a City Rehabilitation Analyst to develop a description of the work, cost estimates, and a bid package.
3. The work is bid out to at least 3 qualified home improvement contractors.
4. A loan agreement and mortgage documents between the homeowner and the City are signed and recorded. Funds are held by the City to pay for the work.
5. A contract to complete the work is signed by the homeowner and the chosen contractor.
6. The contractor is paid by the City as the work is completed and is approved by the home owner.
7. The loan is paid back, with interest, at the time of sale or transfer of the property or when no longer owner-occupied.

Qualified Contractor Requirements

1. Contractor holds a valid, appropriate California State Contractor's License and Home Improvement Certification.
2. Contractor holds general liability insurance in the amount of one million dollars or more.
3. Contractor holds workers compensation insurance in the amount of one millions dollars or more.
4. If awarded the project, the Contractor agrees to carry the City of Glendale as an additionally insured on general liability insurance.
5. If awarded the project, the Contractor obtains a City Business License and obtains necessary permits to perform the work.