SIDE STREETS: City low-interest loan program can rehab a home or a whole neighborhood

Everyone knows it’s a tough economy. Got drafty windows? They’ll wait another year, right? Furnace getting old? It’ll last the winter, right? And, heck, nobody is lending money for things like home repairs anyway, right?

Wrong. Wrong. Wrong.

Actually, low-interest loans and even no-interest loans are available to Colorado Springs residents with modest incomes to rehab their homes. Trouble is, the federally funded program is a well-kept secret.

“Believe it or not, we don’t have enough applicants for this great program,” said Tim Little, a real estate agent who serves on the city’s Loan Review Committee, a five-member board that oversees the program.

“Some months, we don’t have any applicants at all,” Little said. “It’s a shame because it’s the kind of program that can really help people.”

In four years on the board, Little said he’s seen the impact the loan program can make on a community.

“One neighbor will get a loan to rehab their home, and then another will hear about it and more neighbors will, too,” Little said. “It can revitalize a whole neighborhood.”

But you can’t borrow if you don’t apply, and that’s the problem.

Eileen McMullen, who administers the program for the city, said applications have dwindled.

“It’s really a wonderful program,” McMullen said. “But we’ve had fewer and fewer people applying. It’s a sign of the times, I guess.”

Actually, McMullen oversees several loan programs within the city’s housing development division that are designed to help people rehab their own homes or low-income rental properties they own, or to make homes handicapped accessible.

To qualify for an owner-occupied rehab loan, the house must be valued at less than $247,000. There are income criteria, as well. The household income for a family of four must be less than $56,650 for a 3 percent interest loan.

For a no-interest loan, the household income for a family of four must be less than $49,560. More details on the programs and the lending criteria are available on my blog.

McMullen said the process starts with a simple phone call to her office at 385-5912. The city will send an inspector to view the proposed rehab project, then will help with the application and put together a work plan that will be submitted to approved contractors for bidding.

If Little’s Loan Review Committee approves the request, a lien is taken on the property to secure the loan. A contractor is hired and paid directly by the city. In exchange, the homeowner gets needed repairs and a one-year warranty on the construction work.

“This is a great program,” Little said. “It rejuvenates houses that have fallen into disrepair and improves the quality of life for occupant owners and increases the overall value of the neighborhood.”

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