Homeowner Rehab Loans

Frequently Asked Questions

1. What are the eligibility requirements for the program?

   Applicants must owner occupy the home, homestead as principal residence throughout the loan term, and earn at or less than 80% Area Median Income (AMI) with an asset limit of $25,000. Property must be four (4) units or less.

2. How do the Inheritance Fund layers work for the program?

   For the Inheritance Fund, there will be a Rondo Descendancy Verification application that will need to be completed. For applicants that meet the requirements of all the program layers (Regular and Inheritance Fund), up to $80,000 in assistance is available.

3. What are the required documents to submit with the application?

   The program requires three (3) months of paystubs and bank/investment accounts for all household members, along with the most recent two (2) years of federal tax returns/W2/1099s. Other items may be requested during the underwriting process.

4. What is the rehab advisor’s role in the program?

   The rehab advisor is the person who advocates on the homeowner’s behalf to ensure all work is completed according to department of housing and the passing of all codes and inspections by the City of Saint Paul.

5. What kind of rehab work is covered by the program?

   The program focuses on certain safety/habitability items that must be completed first. Only certain repairs are allowed per the program guidelines. We are not able to provide luxury updates/renovations beyond builder basic standard options. The program can not cover any appliances. The Rehab Advisor will work with you to build the scope of work to be completed. Contractors must provide two (2) years of coverage on all work completed.

6. Once I am preapproved for the rehab program, how does the disbursement of the funds work?

   The City will disburse the funds to the contractor upon the completion of the rehab project and the passing of all inspections. Work may not start until the loan closes and the notice to work order is issued by the rehab advisor.

7. How does the bidding process work?

   The City of Saint Paul has a list of contractors who are licensed in general contracting work that can be provided to homeowners, or homeowners can select their own contractors and the City will review their licenses and other credentials, such as minimum insurance coverage and certification in lead safe contracting practices.The rehab advisor will send the scope of work to the contractors selected by the homeowner, and the lowest responsible bid is typically selected.

   If the bids are higher than what you are preapproved for, the rehab advisor will remove work that is not a safety/habitability requirement, or the homeowner may pay the difference to keep it. Homeowners may also pay the difference to work with a contractor that has a higher bid, if the lowest bid is not preferred. The City does not recommend specific contractors and are not responsible for the performance of contractors.

8. What is the lead-paint risk assessment and when is it required?

   If your home was built prior to 1978, the home must undergo a lead risk assessment once you are preapproved for the program. If any hazards are found, the funds must also be used to mitigate them first and the rest will go towards the other improvements, health, and safety needs. Lead remediation work must be completed within one (1) year by a lead-certified contractor from the Minnesota Department of Health. This is not required if you are applying for an emergency rehab loan.