Housing Development Programs

Rental Rehabilitation

Program Overview

The Lancaster County Rental Housing Rehabilitation Program (the Program) is available to provide owners of rental residential properties of 2-7 units in Lancaster County financial assistance to rehabilitate their properties. In exchange, property owners are required to rent to low- and moderate-income tenants for at least ten (10) years or the term of financial assistance.

The program is administered in the form of a partially forgivable loan and will provide up to 60% of the project cost or $40,000 per unit. If lead is present (if the property was built before 1978), the project may be subject to an assistance maximum of $25,000 depending on the proposed level of lead remediation.

The ultimate goal of the program is to assure that tenants are provided with decent, safe and sanitary living environments at an affordable rent.

For more information view the program guidelines below:

Rental Housing Rehabilitation Program Guidelines

Project Eligibility

In order to qualify for assistance through the Rental Housing Rehabilitation Program:

  • The property to be rehabilitated must be located in Lancaster County, outside the City of Lancaster.

  • The property to be rehabilitated must be a permanent structure available for rent on a year-round basis.

  • Mixed-use properties (commercial and residential) are eligible for assistance as long as the commercial use is compatible with the residential use. Assistance is only provided for the rehabilitation of the residential portions of the property.

  • Properties where the owner occupies one of the units are eligible for assistance as long as the assistance is only provided for the rehabilitation of the rental units.

  • Mixed-income properties (renting to tenants with incomes in excess of 80% Median Family Income (MFI) as well as tenants that are under 80% MFI are eligible as long as the assistance through this program is targeted to those units that are income eligible.

  • Conversion of a vacant commercial building into rental housing under this program is permitted. Mobile homes are not eligible for assistance through the Program. Conversion of existing single-family homes into two or more units are not eligible for assistance through the Program.

  • The property to be rehabilitated must have major building systems that are in need of replacement or that fail to meet applicable building codes and standards of the municipality in which they are located. The average rehabilitation cost must be at least $5,000 per residential unit.

  • The property must have between two (2) and seven (7) units. Properties with four (4) or fewer units can be processed more quickly than those with more units due to environmental review requirements.

  • If the property to be rehabilitated is occupied at the time of application submission, at least 51% of the tenants must be considered to be low- or moderate-income as determined annually by the U.S. Department of Housing and Urban Development (HUD) and rents must be equal to or less than Fair Market Rents (FMR) as determined annually by HUD for the Lancaster, PA Metropolitan Statistical Area (MSA). All FMRs include utilities paid by tenants per Utility Allowance schedules in effect.

  • The applicant must be the owner of record of the property to be rehabilitated. Or, the applicant must have the property under control through a valid Agreement of Sale (the applicant must take ownership of the property prior to the rehabilitation loan settlement). Financing is not available for properties being purchased through a Lease/Purchase Agreement.

  • All relevant taxes for the property must be current.

  • The owner of record may be an individual or individuals, corporation, partnership or nonprofit organization. The owner of record, including the principals of a corporation, may not have a history of code violations in any municipality in Lancaster County.

  • In order to comply with the Federal Uniform Relocation Act, notifications concerning the rehabilitation of rental units and the possibility of relocation must be sent to all tenants in the property considered for rehabilitation. It is not the intent of the Program to require tenants to relocate (displaced to another dwelling unit during the rehabilitation of their unit) and that such event may result in the disqualification of the unit from the Program. However, if all parties involved agree that displacement is necessary, all associated costs shall be in accordance with the Federal Uniform Relocation Act and shall be the sole responsibility of the property owner. NOTE: Property owners cannot elect to not renew a lease or evict a resident due to upcoming rehabilitation work, this would constitute.

Multi-Family Housing Program

Program Overview

The Multi-Family Housing Program provides assistance for the rehabilitation of existing rental properties and construction of new rental and ownership housing units. Funding is provided by the U.S. Department of Housing and Urban Development (HUD) through the HOME Investment Partnerships Program (HOME Program). Projects are required to be affordable to and occupied by lower income households for a period of 5 to 20 years, depending on the type of project (new construction vs. rehabilitation) and the amount of funding invested by the Redevelopment Authority.

Projects with a mix of unit types and affordability levels are encouraged but are not required. Only the Redevelopment Authority assisted affordable units (‘HOME designated units’) (not the market rate units) are subject to the gross rent and income restrictions listed below. These gross rent and income limits are published annually by HUD.

  • The rent for at least 60% of the assisted units shall not exceed 30% of the annual income of a family whose income equals 50% of the Lancaster County median income, as determined by HUD, with adjustments for smaller and larger families. These are called Low HOME Rent Units and must be occupied by very low income families (that is, families earning less than 50% of the Lancaster County median income).

  • The rent for the remaining assisted units shall not exceed 30% of the adjusted annual income of a family whose income equals 60% of the Lancaster County median income, as determined by HUD, with adjustments for the number of bedrooms in the units. The rent limits provided by HUD will include average occupancy per unit and adjusted income assumptions. These are called High HOME Rent Units and shall be occupied by families earning less than 60% of the Lancaster County median income.

  • In no instance may any rent, the Low HOME Rent or the High HOME Rent, exceed the fair market rent for existing housing for comparable units in the area as established by HUD for the Section 8 Rental Assistance Program.

  • An allowance for utilities to be paid by the tenant family must be subtracted from the gross rents. This allowance is calculated using the Utility Schedule of the Lancaster County Housing Authority for the Section 8 Rental Assistance Program.

Nothing herein prohibits the developer from establishing more restrictive rent and income guidelines for the project, such as when the project is being developed in conjunction with the federal Low Income Housing Tax Credit program.

Design Standards

Projects must comply with all applicable federal, state and local building and health codes.

Projects must comply with Redevelopment Authority design standards and minimum room sizes, local code and accessibility standards, environmental due diligence, Rental Housing Program guidelines, and regulations of the HOME Program including, but not limited to, loan underwriting, subsidy layering and affirmative marketing guidelines. Additionally, all projects must comply with the Fair Housing Amendments Act of 1988, Section 504 of the Rehabilitation Act of 1973, as amended, and the Americans with Disabilities Act of 1990, as applicable.

If a project proposes a mixed-use program, the non-residential space in the project can be no more than 49% of the gross area of the project. The types of non-residential uses are subject to Redevelopment Authority approval. HOME program funds cannot be used in the development of non-residential space.