Forgivable Loan Program

Residential Rehabilitation: Forgivable Loan Program

The purpose of the Community Development Block Grant Housing Rehabilitation Program is to provide financial assistance to low- and moderate-income families for repair of their houses to make them decent, safe and sanitary.

The U.S. Department of Housing and Urban Development (HUD), through the Community Development Board, administers a program for financing the rehabilitation, improvements and repair of owner-occupied property.

The program is administered for the City of Waterloo by the Community Development Board. Funds for the program are provided by the Federal Housing and Urban Development Community Development Block Grant funds as authorized by the Housing and Community Development Act of 1974. Funds for housing rehabilitation under the Block Grant Program will be allocated by the City Council on a year-to-year basis.

Assistance is available to homeowners in the form of a Forgivable Loan. The basic requirements of a Forgivable Loan are as follows:

  1. The applicant must be the owner-occupant of the housing unit for one year and reside in the property for at least one year.

  2. The applicant must be the deed holder of the property as evidenced by the Black Hawk County Recorder Real Estate Assessment and Tax Information document.

  3. The property must be a single family (1-4 unit as defined by HUD) residential property and within the city limits of Waterloo.

  4. Applicants must have gross household income less than 80% of the area median income adjusted by household size using the HUD guidelines.

  5. All liens, delinquent taxes and assessments against the property must be paid and hence must have insurance.

  6. A Forgivable Loan is not repayable unless you sell or move from your home during the five years after the loan is approved. This loan will be forgiven on the following basis:

If you sell your home:                                                             You payback: 

During 1st year after the Forgivable Loan -                                100%

During the 2nd year -                                                                      80%

During the 3rd year -                                                                       60%

During the 4th year -                                                                       40%

During the 5th year -                                                                       20%

In other words, if you retain ownership of your home and continue to live in it for five years, the total amount of the Forgivable Loan will be canceled and you owe nothing. The maximum amount that can be given on a Forgivable Loan is $25,000. If the cost of rehabilitation of a property is more than that amount, the property owner has the option of providing the difference. Otherwise the house will be considered infeasible and no assistance offered.

Program policy prohibits any activity from being conducted in a Special Flood Hazard Area (SFHA). This shall include Housing Rehabilitation and Emergency Repairs as well as, Down payment Assistance and Tenant Based Rental Assistance and all other eligible uses for Community Development Block Grant and HOME Funding.”

Program policy shall exclude any activity where the Iowa SHPO does not concur with the RE’s determination, however, if the SHPO fails to respond within their 30 day comment period and waives its opportunity to comment, the activity can proceed to the next step in the process based upon the agency’s finding and determination.