Rental Rehabilitation Loan

Community Development
Rental Rehabilitation Loan


The City of Waterloo Rental Rehabilitation Loan Program is to provide owners of affordable rental housing a financial tool to improve safety, integrity, accessibility and curbside appeal of their property. Another goal of the program is to help improve neighborhoods by upgrading existing housing stock. Owners desiring to make property improvements that provide safe, decent, and healthy rental units are urged to apply.

The City of Waterloo Community Development office has a $25,000 maximum 0% interest loan available to owners of affordable rental housing. Upon repayment of 80% of the loan, Waterloo Community Development will forgive the remaining 20% of the loan payments. Rental Rehabilitation Loans used in conjunction with the Lead Based Paint Hazard Control Program are not eligible for the 20% forgiven portion. These loans must be paid in entirety. The loan would be due in full if the borrower sells or transfers the title, or fails to comply with any of the other requirements as defined in the loan documents. The loan will be secured with a note and recorded mortgage. Loan payments will be amortized over a 24 to 120 month period based on the loan amount. Owners will be required to submit annual income and rent certification forms to monitor program compliance.

Program Criteria:
At a minimum, requirements of the Rental Rehabilitation Loan Program will comply with local and federal regulations and Affirmative Action.

  • Applicant must have an ownership of the property and the property must be registered as a rental property within the City of Waterloo. The owner of a rental unit(s) must show legal and equitable interest in the property to be rehabilitated prior to the date of approval of assistance and must be able to enter into a mortgage as security for a loan.   A titleholder can be defined as a mortgagor, a holder of fee simple title, or any type of deed which transfers all the rights of the property to the owner. 
  • Applicants must have insurance on the property at the time of the application.
    • Applicants must maintain hazard insurance equal to or greater than the amount of the loan or the after-rehabilitation appraised value, whichever is greater, with the appropriate loss payable clause naming the City of Waterloo as loss payee.  Loan recipient must provide a current certificate of said insurance to the City.  The mortgage shall state that failure to maintain hazard insurance shall cause the entire amount of the loan to become due and payable immediately.
  • Applicant must be current with mortgage, property taxes and assessments. The applicant will remain current on any property tax/special assessment payments or the entire amount of the loan will become due and payable immediately.
  • Property must be structurally sound and repairs or improvements must comply with Housing Quality Standards upon completion along with the City’s Minimum Housing Code.
  • Owner may not increase rent more than 3% annually with a rent ceiling equivalent to Fair Market Rent (FMR) determined annually by the U.S. Department of Housing and Urban Development (HUD) for the 5 year period of affordability. Applicant will be required to submit an annual Tenant Income Certification Form to report tenant income and rents annually during the life of the loan.
  • Units and tenant documentation must be available for an annual inspection during the initial 5 years of the loan
  • Income will be determined by Community Development staff using the gross annual income of the tenant’s household. Tenants will be required to submit income and asset documentation. Gross annual income includes all sources of income of anyone over the age of 18 whom live in the household that which was received over a 12 month period.  Documents used to determine tenant income will be defined by Community Development Staff. The household income may not exceed the amounts listed in the table below.
2024 Income Guidelines
  • Owner must agree to affirmatively market rental units to low-income families for the initial 5 year period of the loan. Tenant household income cannot exceed the income guidelines established by HUD annually. If the tenant household income increases during tenancy they are not required to move.
  • Landlord must provide the previous year’s tax statement and documentation that shows the property will maintain a stable positive cash flow and must demonstrate the ability to repay the loan. An analysis of the property debt and revenue will be completed.
  • Vacant properties must be rented to an income eligible tenant within six months of the rehabilitation completion.
  • Multi-family units may qualify if 51% of the units are occupied by low-moderate income tenants. An income determination would need to be completed for all units.
Eligible uses of Program Funds:
Rehabs will be prioritized as follows:
    • Code Enforcement violations
    • Removal of Slum and Blight
    • Improvements that which will enhance property value and livability, modifications for accessibility and reduction of lead paint hazards.
    • Minimum Housing Quality Standards 
  • Eligible costs include the costs of meeting the requirements of housing quality standards, housing code standards and general property improvements.
  • Address slum and blight on a spot basis.
  • Eligible improvements must be permanent improvements.
  • The need to address any lead hazard exposure will be initially determined during a visual assessment. All lead based paint exposure must be addressed to EPA standards.
  • Improvements made to increase livability and curb appeal
  • Improvements for energy efficiency and conservation
  • Improvements to enhance accessibility and ADA requirements
  • Landscaping which corrects poor grade around the foundation and trimming of trees that interferes with the structure of the house
  • General Property Improvements which include the upgrade of major building components such as roof, windows, HVAC and electrical systems items which substantially protect or improve the basic livability of the property including:  total renovation of the plumbing or electrical systems when not required, the renovation of items which will result in reduced maintenance, or the installation of permanent work-saving elements which benefit the health and safety of the tenant are eligible costs.

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