Housing Rehabilitation Loans

Doug Kerr photoMaine, and Lewiston in particular, has some of the oldest housing stock in the country. As such, many buildings are in need of major upgrades to bring them into the 21st century. The city’s current guidelines for the rental rehabilitation loan program can be found here. Notably, the resources come from the federal Community Development Block Grant program, and must be targeted to areas of the city with a high concentration of poverty. Most of the rental units must be occupied by low to moderate-income families, and must remain affordable (details starting on page 15).

Our current loan programs have three tiers (minor/moderate/substantial) rehabilitation. The terms of the loan favor owner occupancy, particularly if the owner is low income, as well as investors that live in the Lewiston-Auburn area.

We can make these programs simpler, and tie them directly to the key interventions that must be made to rebuild our city, particularly to increase property values, health, safety, and structural integrity. To that end, we can both simplify the program(s) and focus their impact, by implementing these reforms:

  • Remove the distinctions between minor, moderate, and substantial rehabilitation, simply allowing loans of up to $25,000 for projects. Property owners should provide proof of project costs, allow inspection that the money was used appropriately, etc…
  • Focus the loans on some of the most common upgrades that property owners need to make, that also most directly improve the appearance of downtown, and the energy efficiency of buildings. To that end, the loans should be limited to improvements in siding, roofs, porches, and windows.
  • For both owner-occupied buildings, and investors living in the Lewiston-Auburn area, the loan terms should be reduced to 0% interest for up to 20 years. That means, for people considering these structural renovations, they can plan on them costing only about $105/ month for the life of the loan repayment, a serious incentive to make these needed repairs.

Finally, these loans should be limited to owners who are not able to access other Housing and Urban Development resources for their project improvements, or entities like non-profits that do not pay property taxes. The goal is to use this revolving loan fund to build up the private, local, quality, affordable ownership market of our city.

By reducing the interest rates available to local owners, we hope to make the kind of immediate, large-scale improvements necessary to revitalize our tax base.

Focusing on the exterior of buildings will ensure they last longer, avoid water damage, improve the attractiveness (and therefore value) of the neighborhoods, increase energy efficiency, and make residents safer.