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Town of Normal, Illinois. Committed to Service Excellence.

Rehabilitation Grant / Loan Program

Residential Rehabilitation Grant Application [PDF]

Due to popular demand, the Rehabilitation Program currently has two (2) approved projects and four (4) pending projects. No additional applications will be accepted until March of 2010. Thank you for your interest in our program.

PURPOSE

TO CONSERVE THE EXISTING AFFORDABLE HOUSING STOCK IN NORMAL BY CORRECTING MAJOR LIFE AND HEALTH SAFETY DEFICIENCIES THROUGH THE PROVISION OF GRANTS AND/OR LOANS TO INCOME ELIGIBLE OWNER OCCUPANTS OF SINGLE FAMILY DWELLINGS.

MAXIMUM AMOUNT

The maximum amount spent on any single address shall be $10,000. Should the inspection and cost estimate exceed this amount, the property owner shall be responsible for securing the amount over $10,000. If necessary, a portion of the Town’s funds may be used to supplement any private financing the owner needs (e.g. buydown of interest rate, closing costs, etc.). In no event shall the combination of rehab/supplement exceed $10,000.

CONTRACTOR SELECTION

The Town shall endeavor to keep a list of qualified contractors. The property owner may select their own contractor, as long as the contractor’s estimate is reasonable based on the Town’s estimate. Should the property owner choose their own contractor, the contractor shall carry necessary insurance and licensing, will agree to sign the Town provided contract and will provide references should the Town require them. Should the homeowner choose, the job will be let out to bid to those on the Town’s list.

ELIGIBLE REHABILITATION ITEMS

Items deemed by the Town’s inspector to be critical to the preservation of the unit and/or the safety of the residents shall receive first priority. Second priority shall be given to those items deemed by the Town’s inspector to enhance the mechanical systems of the structure. Third priority shall be given to items deemed by the Town’s inspector to address weatherization of the structure. Other items deemed by the Town’s inspector to be in the best interest of the program’s purpose shall be addressed next. Items necessary to make the home accessible to those with disabilities shall also be considered eligible under the program.

DEFERRED PAYMENT LOANS

Those property owners who qualify for assistance under this program shall receive a 100% Deferred Payment Loan (DPL). A second mortgage in the amount the Town has spent on the rehabilitation shall be placed on the property for a period of five (5) years. This second mortgage shall automatically be forgiven at the rate of twenty percent (20%) per year as long as the recipient continues to OWN and OCCUPY the property. Should the recipient not meet one of these criteria prior to the five year expiration, the amount owing at the time the recipient sells or ceases occupancy shall be due and payable to the Town.

The Town shall subordinate its second only if, in the opinion of the Town, sufficient equity exists in the property to protect the Town’s position. In the event the recipient must secure private financing to accomplish the work eligible under the program, the Town shall take a subordinate position to the private lender should that be required in order for the private loan to be approved.

HOMEOWNER’S INSURANCE

Recipients shall be required to maintain Homeowner’s Insurance in an amount sufficient to cover replacement of the property during the five year period the Town maintains the second (or subordinate) mortgage on the property. The Town shall be named as an additional insured and shall be provided evidence of insurance on demand.

EXPENSES

Any expense deemed necessary by the Town including but not limited to title search, property appraisal, surveying, etc., shall be paid out of the $10,000 maximum allowed per address.

SELF HELP

Solely at the Town’s discretion, the recipient MAY be allowed to do their own work. This shall only be allowed when allowing the recipient to do some of the work would result in keeping the project under the $10,000 limit. The recipient must demonstrate, to the Town’s satisfaction, that they have the ability to address the tasks they wish to accomplish themselves.

REQUIRED INFORMATION

In order to determine qualification, the following will be verified:

  1. Income for applicant and all others occupying the residence at time of application.
  2. Evidence of current homeowner’s insurance
  3. A copy of the applicant’s most recent federal and state income tax return (to be furnished by applicant)
  4. Amount of all bank accounts, stock and/or bond holdings, and other investments.
  5. Current installment credit
  6. Any other items deemed by the Town to be necessary in establishing eligibility.
  7. Evidence that mortgage payments are current as well as information on original mortgage amount, amount of monthly payment (principle, interest, taxes and insurance) and current status of mortgage.
  8. Evidence of payment of all property taxes

ELIGIBILITY

Eligibility shall be based primarily on income and family size. Applicants income must be at or below eighty percent (80%) of the area median income as established by the U.S. Department of Housing and Urban Development (HUD). In establishing income, the Town shall look at the current income of the applicant and income one year previous to application. If either of these amounts exceeds the 80% limit, the applicant does not qualify. Only owner/occupants of single family dwelling units located in the Town of Normal are eligible for the program. Applicants must have resided in the residence for which assistance is sought a minimum of 365 days immediately previous to application. Contract For Deed purchasers are not eligible.

In establishing income, the following will be included:

  1. Income from employment and/or self employment of the applicant and
  2. Income of all other occupants at time of application, including social security annuities, retirement, pensions, unemployment, worker’s comp, financial gifts, etc. Exceptions to this will be income of dependents who are full time students, income which is solely for the purpose of paying for necessary medical treatments and/or devices and any other income which could not be considered “disposable.”
  3. Income from child support and alimony.
  4. NET income from the sale of stocks, bonds, property, etc. sold during the year immediately previous to application.
  5. Potential income. This will be determined by the Town of Normal and includes, but is not limited to, vehicles, collections, other items of significant value which could readily be converted to cash.

Applicants/Addresses can receive only one Rehabilitation Grant/Loan from the Town in any 10 year period. Applicants who receive assistance at one address are ineligible for assistance at any time at another address.

The Town reserves the right to refuse any application it deems to be contrary to the expressed purposes of the program and/or is made in an attempt to take unfair advantage of the program.

This page last modified 04/08/09.