Downtown TIF Upper Story Housing Loan Program

A portion of the Downtown TIF (link to TIF map) is used to create new housing by renovating the upper stories of downtown buildings. Historically, upper floors of many buildings were used as apartments. Over the years, this space has been converted to nonresidential use or abandoned. With the resurgence in interest in downtown housing, the City created the Downtown TIF program in 2003.

Eligible Loan Uses

The Downtown TIF Upper Story Housing Loan Program may be used for interior or exterior rehabilitation costs. This includes “soft” costs related to architectural and design fees, appraisals, plan review and permit fees.

Property owners frequently use this program to:

• Upgrade electrical systems
  
• Reconstruct bathrooms and kitchens
  
• Upgrade windows
  
• Move interior walls
  
• Carpet, paint and trim-finish units
  
• Install new doors
  
• Plaster and dry-wall
  
  

Loan Structure

This loan program provides a forgivable loan, but requires private financing to complete the project. The loan amount is a maximum of $20,000 per newly reestablished unit and $10,000 per unit that was occupied within the past five years. However, cost averaging is allowed for multi-unit projects. The loan is forgivable (0% interest rate – otherwise known as a grant) after five years if the loan recipient still owns the property.The loan amount is a maximum of $20,000 per newly developed condo. This loan is forgivable (0% interest rate - otherwise known as a grant) even upon sale of the condo.

TIF(Tax Increment Financing) funding cannot be more than 40% of the cost of the total project. Bank, credit union or personal financing must pay for the 60% balance of the project. A 10% construction contingency is required.

Development Agreement

This program requires an in-depth development agreement, which specifies the following:

• Recorded mortgage
  
• Minimum private investment
  
• Ownership for five years following rehabilitation or City’s TIF share is immediately repaid upon sale, except in the development and sale of a condo
  
• First floor use must remain viable for five years following renovation
  
• Insurance, property taxes and City utilities must be paid and current
  
• No income or rental controls apply
  
  

How to Qualify

Downtown Rock Island property owners may qualify for this program by possessing:

• Current property taxes
  
• Proof of insurance for structure
  
• Proof of property ownership
  
• Ability to repay the loan
  
• Downtown TIF location of existing building (no new construction)
  
• Vacant upper story residential units
  
• Viable commercial use on first floor