MSHDA's Community Development Division's (CD) Rental Rehabilitation program is designed to improve investor-owned properties and spur economic development in Michigan's downtowns. Funding for Rental Rehab is generally provided through the unit of local government with jurisdiction for code enforcement and/or rental licensing.
- Property owners fund at least 25% of project costs
- Affordability at initial occupancy
- $35,000 per unit maximum for the creation of rental units in previously non-residential space
- $25,000 maximum for any unit in legal residential use and occupied during the last 5 years
Refer to CD's Housing Resource Fund Summary for more detail. Housing Resource Funds may be combined with MSHDA's Property Improvement Program.
Rental Rehab projects targeted at downtown business districts often have a long-term positive impact resulting from (a) increased activity in the downtown, (b) increased revenue to downtown property owners, and (c) productive use of space which is often inappropriate for homeownership. Applications that are part of a comprehensive downtown or gateway strategy for economic development have priority. Additionally, CD will give preference to applications that meet the following criteria:
- The projects are ready to go with owner financing for the leverage portion in place at time of application submittal, (proof of leverage funds must be submitted with application).
- Projects of 4-16 units must demonstrate long term financial viability.
- Projects that create new units in the upstairs of commercial buildings in the downtown.
- Projects that are strongly supported by the municipality, by tax incentives given to building owners. This could be a Neighborhood Enterprise Zone, Brownfield, or other program that reduces the taxes for the property owner.
- Program/Projects with historic buildings that are eligible for historic tax credits (placed in service prior to 1936), and that are in a historic local district.
- Programs/Projects in a Michigan Main Street Community.
- Projects that preserve the historic character of the building.
- Projects that include "green" standards using recyclable materials, and projects that achieve high energy efficiency standards.
- Projects that create units with at least 750 square feet (SF) per unit (and at least one bedroom per unit). Projects less than 750 SF could be considered, but MSHDA would award a maximum of $25,000 for these units.
NOTE: Beginning January 1, 2011, applications for downtown Rental Rehabilitation projects that meet all or most of the above criteria can come in at any time and do not have to wait for a funding window. Applications can be for one or more buildings, but should be a request to create at least two (2) or more units.
To see the positive impact MSHDA's Rental Rehabilitation program makes watch the Mason Downtown Rental Rehabilitation Informative Video.