Home Repair Program - Frequently Asked Questions:
1. WHAT IS A HOME REPAIR LOAN AND WHAT ARE THE TERMS?
It is a deferred loan from the Redevelopment Authority of Lancaster County funded by HUD through the Housing and Community Development Act of 1974 to rehabilitate owner-occupied homes. The interest rate is 0% and you do not have to make monthly payments. Funds are returned to the Redevelopment Authority at the time of sale, transfer of the property or refinancing for other than a lower interest rate or lesser term.
2. HOW DO I QUALIFY FOR A LOAN?
Property owners must meet the eligibility requirements based on family size and income. Owners must occupy their residence year-round and must own the property in fee simple title, (the deed must be in their name). The current homeowner must have owned the home for a minimum of two (2) years prior to the initial interview. The maximum value of a home cannot exceed $400,000.00.
3. HOW MUCH MAY I BORROW?
A Home Repair Loan may be for the amount needed to rehabilitate the property, up to a maximum of $25,000.00. Additionally, the cost for required rehabilitation items shall be at least $5,000.00.
4. WHAT OTHER RESTRICTIONS OR PROGRAM REQUIREMENTS APPLY?
Owners must carry homeowner’s insurance on their property and have all real estate taxes paid. An owner’s liquid assets cannot exceed $35,000 (unless over age 62) and properties must be located in Lancaster County, but outside of Lancaster City limits. The program also requires that owners must meet the minimum home equity amount based on the amount of rehabilitation needed. If you own a manufactured home, a separate program has been established to assist the owners of manufactured homes in leased land communities.
5. WILL A LIEN OR MORTGAGE BE PLACED ON MY PROPERTY?
A mortgage or title lien will be secured against the subject property depending on the program. Program staff is happy to provide more information about the lien terms.
6. WHO DECIDES WHAT WORK IS NEEDED?
The Redevelopment Authority Rehabilitation staff will survey your property and advise you on the work required to meet program standards. The homeowner’s input is welcomed on this inspection. The Technical Services Representative will assist in obtaining bids from reliable, insured, and licensed contractors and will award the contract to the lowest responsible bidder.
7. WHAT KIND OF REPAIRS OR WORK CAN I HAVE DONE?
Financing will be provided for the cost of addressing hazardous situations within major systems in the home, such as (list major repairs here) The total cost of rehabilitation shall not exceed $25,000.00, except in special circumstances approved by the Board of the Redevelopment Authority.
8. WHAT IF THE FUNDS ARE NOT ENOUGH TO BRING MY HOME UP TO THESE STANDARDS?
A determination will be made that the property’s equity justifies the rehabilitation within the allotted loan maximum limits.
9. WHEN IS A CONTRACT SIGNED WITH A HOME REPAIR CONTRACTOR?
Only after your Application and Rehabilitation Loan has been approved by the Redevelopment Authority Staff.
10. WHO INSPECTS THE WORK?
The Redevelopment Authority staff, and the homeowner will see that the work is done in a proper and workmanlike manner. Homeowners approve the work write-up and are given this write-up and the contract to follow the repairs.
12. HOW AND WHEN IS THE CONTRACTOR PAID?
The contractor will be paid in draws according to the contract signed. He is paid for the work that has been satisfactorily completed by checks prepared by the Redevelopment Authority. The contractor will not be paid until you, the owner, are satisfied and until the Technical Services Representative certifies the work has been done according to the contract and work write-up.
13. MAY LANDLORDS APPLY FOR THIS LOAN?
Mixed-use properties are not eligible for assistance. Investor-owners may apply for Rental Rehabilitation Program funds also through the Redevelopment Authority.
14. CAN I PAY ON THIS HOME REPAIR LOAN AT ANYTIME WITHOUT PENALTY?
Yes, the loan can be paid off sooner, but the deferred loan is intended to be repaid when the property is sold, or ownership is transferred.
15. HOW LONG DOES THE REHABILITATION PROCESS TAKE?
The amount of time depends on several things: 1.) Your ability to provide eligibility items for our office, such as proof of income, deed, insurance, taxes; and 2.) The amount of work that is necessary to address the hazardous situations; and 3.) Other circumstances, such as our office’s workload, material shortages, or the weather.