Housing Rehabiliation Program

Purpose

The Housing Rehabilitation program is to preserve the quality of housing owned and occupied by low and moderate income families and to continue to expand and revitalize neighborhoods within the City, the City of Shasta Lake Owner Occupied and Tenant Occupied Rehabilitation Program provides low interest loans to qualified low and moderate income homeowners.

Loans are made subject to funding availability and eligibility.

Applicant Eligibility

Income

Eligible households are those whose gross annual income does not exceed 80% of the Area Median Income (AMI), adjusted by household size. Income limits are set by the State of California Department Housing and Community Development (HCD) Community Development guidelines, updated annually.     

2022 Maximum Gross Income Limits
 Household Size Maximum Annual Income
1 $44,450
2 $50,800
 3 $57,150 
 4 $63,500 
 5 $68,600 
 6 $73,700 
 7 $78,750 
8 $83,850

Property Eligibility

• Location: The home must be located in the City of Shasta Lake city limits.
• Eligible Repairs: Eligible repairs include weatherization, health and safety, and ADA repairs. Energy and Water conservation improvements are strongly encouraged.
• Property Improvements: All improvements must be physically attached to the property and permanent in nature. General property improvements which are not related to health and safety, energy efficiency, or to correct deterioration are not allowed. Eligible properties must be on a permanent foundation.

Owner Occupied Rehab Program

The City’s Housing Rehabilitation Program allows for owner-investor/tenant occupied properties to participate in the Program. Owner-investor/tenant occupied properties must meet all income and residency requirements. No unit to be rehabilitated will receive financial assistance if it is currently occupied by an over-income household or does not meet the eligibility standards outlined in these guidelines.

Loan Amount

Loan repayment is deferred up to 30 years at an annual interest rate of 0%. Borrowers must pay the remaining balance if the property is sold, transferred, or is no longer owner occupied. The City of Shasta Lake OOR Loan is recorded as a second mortgage against the property. Loan amounts are between $5,000 to $80,000.

Loan Terms

• Total Debt on the property, including the rehabilitation loan, cannot exceed 95% of the property value. An appraisal is required.
• No fees are to be paid out of pocket by the borrower. Appraisal, repair work, closing costs, building permits, and title fees can be included in the loan. All costs may not exceed the maximum loan amount.
• Borrowers must maintain fire insurance on the home and name the City as a loss payee during the entire term of the loan.
• The entire loan amount becomes due and payable if a change of title occurs.

For complete program guidelines, please contact the Housing Specialist.

Owner-Investor Housing Rehabilitation Program Guidelines

The City’s Housing Rehabilitation Program allows for owner-investor/tenant occupied and properties to participate in the Program. Owner Investor/ Tenant occupied properties must meet all requirements. No unit to be rehabilitated will receive financial assistance if it is currently occupied by an over-income household or does not meet the eligibility standards outlined in these guidelines.

OWNER-INVESTOR REQUIREMENTS

Tenant Income Required: If a rental is currently occupied, the tenant’s household income must be equal to, or less than, the applicable HCD income guidelines. Both existing and prospective tenants will be asked to cooperate by providing income documentation and income will be projected for 12 months based on current income.

A. If the owner-investor sells or transfers title of the rehabilitated property for any reason, the loan is due and payable.

B. An owner-investor may convert a rental property to his or her personal residence if all conditions below exist: 1. He or she can prove that the previous tenant was not evicted without cause.

2. He or she is income eligible.

3. He or she requests approval from The City.

C. If an owner-investor converts the rental property to his or her personal residence, but is not income eligible, the loan is due and payable.

D. If the owner wants to convert the rehabilitated property to any commercial or non-residential use, the loan is due and payable.

E. Over-income rental households occupying units in a project which will receive financial assistance for other eligible units will be allowed to stay in their respective units. To prevent owners from evicting ineligible tenants before applying for the Program, the owner must certify that no tenant has been forced to move without cause during the previous six months.

Loan Amount

Loan amounts are between $5,000 to $80,000.

Loan Terms

Amortized Loan - Below Market Interest Rate (BMIR) loan at 1.5% simple interest, secured by a deed of trust and with a maximum term of 15 years with standard investor restrictions (i.e., Maintenance Agreement for minimum five years and recorded Rent Limitation Agreement for life of the loan), as outlined below.

Deferred Payment Loan (DPL) for a TIG owner-investor who agrees to comply with standard investor restrictions (i.e., Maintenance Agreement for minimum five years and recorded Rent Limitation Agreement for life of the loan), as outlined below. DPL terms are the same as those desribed in Owner Occupied.

Rent Limitation Agreement (RLA) - An owner-investor who elects to rehabilitate a rental unit with CDBG financing must sign an RLA, which will be recorded.

Total Debt on the property, including the rehabilitation loan, cannot exceed 95% of the property value. An appraisal is required

No fees are to be paid out of pocket by the borrower. Appraisal, repair work, closing costs, building permits, and title fees can be included in the loan. All costs may not exceed the maximum loan amount.

Borrowers must maintain fire insurance on the home and name the City as a loss payee during the entire term of the loan.

The entire loan amount becomes due and payable if a change of title occurs.

For complete program guidelines, please contact the Housing Specialist.

How do I apply?

Please complete the attached HRP Interest Form (PDF) & Contact the Housing Specialist to set up an appointment to receive an application.

Helpful Links

State of California Department of Housing and Community Development
US Department of Housing and Urban Development
City of Shasta Lake Boundary Map (PDF)
City of Shasta Lake Energy Rebates
City of Shasta Lake Paint Rebate Program