Rental Rehabilitation Program

Rental Rehabilitation Program

What are the rental property owner’s eligibility requirements? 

  • Rental property must be registered as a rental property with the city of Sioux Falls.
  • Property owners must be in good standing with the city of Sioux Falls – Building Services department and must be in compliance with code enforcement. 
  • Property owners with a history of code violations will be reviewed to determine eligibility in the program for Rental Rehabilitation loan funds. 
  • This program will not provide funding for the development of new rental units. 

What are the property eligibility requirements? 

  • Rental property must be located within the designated program area
  • Rental property must be registered as a rental property with the city of Sioux Falls. 
  • All work will be completed by contractors licensed with the city of Sioux Falls – Building Services department. 
  • If rental property owner is a contractor, loan funds will be provided for materials only. 
  • Properties must be current with property taxes, insurance, and assessments 
  • Property owners must be current with rental properties financial mortgage obligations. 
  • Only properties that are structurally sound will be eligible for assistance. 

What is the maximum amount of assistance? 

  • Loans will be limited to:
    • $25,000 per rental structure with a minimum loan being $2,000.
    • A maximum of 4 loans (4 structures) being provided to any one property owner.
    • If property is owned by a corporation or limited liability company, a listing of all board members or property owners is necessary.

What are the terms of the loan?

  • Loans will be secured with a recorded mortgage on file.
  • Loans will bear an interest rate of 3 percent and be amortized over a maximum period of 5 years.
  • No loan origination fees will be charged.
  • No interest will be charged for the first 6 months following loan signing.
  • Payments will begin on the 1st day of the 7th month following the loan signing.
  • Monthly repayments will be paid to Community Development until satisfied.
  • Total debt ratio on property cannot exceed 90% of appraised/assessed value.
  • Loans provided by Community Development are not assumable.

What work is eligible?

  • Loans will be utilized for exterior and interior rehabilitation, excluding appliances.
    • Exterior work includes: Roof, doors/windows, porches, steps/stairs, gutters/downspouts, siding, paint, insulation, foundation
    • Interior work includes: Mechanical, paint, wall repair, floor coverings, cabinetry, insulation
  • Exterior painting will be required if existing paint is deteriorated. EPA lead rules will apply.
  • All other work related to the rental property will be the responsibility of the property owner.
  • All change orders must be approved by Community Development prior to the work being completed.

What is involved?

  • Applicants must allow an inspection of the requested items for each property by a Community Development staff member. It will be the responsibility of the property owner to solicit bids from licensed contractors. After soliciting bids, the property owner will select the contractor for the project and sign a mortgage with Community Development to secure funding.
  • It should be noted that until you sign the mortgage, you are under no legal obligation.

How do I apply for Rental Rehabilitation funds?

  • Call the Community Development office at 367-8176.
  • Stop in at 235 W. 10th Street (lower level of Carnegie Town Hall).