City Wide Rental Loan Conversion Program

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Property owners who convert a duplex or a triplex into a single family owner-occupied home will be eligible to have 20% of their principal loan amount forgiven upon repayment. Property owners who renovate a single family rental will be eligible to have 10% of their principal loan forgiven upon repayment. The rest of the loan terms and amounts are the same as the "Targeted Area Housing Renovation Program" (Up to $40,000, 10 year-term, 1% interest, with Balloon payment, loan forgiveness depending on the type of conversion).

This incentive is available city-wide and is available to current owners of a rental home or buyers of a former rental home that was rented out for at least 2 consecutive years and the owner must prove that it was a rental for at least two (2) years (through leases, city records, etc).


Background

The City of La Crosse is prioritizing encouraging its residents to make significant repairs and do remodeling work on their homes. This is part of a its strategy to revitalize its neighborhoods and improve its aging housing stock.


Open Application Period

Applications for the Rental Loan Conversion Program are being accepted on a rolling basis. Applications for residents living within the targeted area are now closed and no longer being accepted.


Program Eligibility

To be eligible to participate in the City's Rental Loan Conversion Program you must meet these requirements:

  1. The property must be a rental to owner-occupied conversion.
  2. The home will be used as the Borrower's principal residence within 12 months from program loan closing or the subject property will be sold to an owner occupant buyer within 12 months from program loan closing.
  3. Home must be assessed at a minimum of $70,000 and property must be zone R-1 Residential or Washburn Residential
  4. Property will be owner-occupied continuously for 10 years after loan closing (guaranteed through a land-use restriction agreement recorded against property)
  5. This program is not open to La Crosse Residents who qualify for the income-based Housing Rehabilitation Loan Program. If you earn less than 80% of the County Median Income, you must apply for our Housing Rehabilitation Loan Program (instead of this program). See household member table below to see if you earn less than 80% of the County Median Income.
Household Size 1 2 3 4 5 6
Annual Income $44,050 $50,350 $56,650 $62,900 $67,950 $73,000

*If you earn less than these amounts listed above, you are not eligible for this program and must apply to the City's Housing Rehabilitation Loan Program*


Other Requirements

  1. May not borrow more than 100% of the Loan to Value (Based off of Fair Market Value (FMV))
  2. Application fee of $295, payable to the City of La Crosse Treasurer's, due after the Committee's approval.
  3. There is a match requirement. The owner must contribute 25% of total project costs through borrowed or personal funds (see examples below).
  4. Home must be brought up to meet code and meet minimum HUD Housing Quality Standards (verified through an initial and final inspection by City Staff).
  5. At least 25% of the loan must go towards exterior renovations (defined as siding, roofing, soffit, fascia, windows, exterior doors, chimney repair, porch, front entry, etc)

What Repairs Can Be Made?

Basic components of your home that can be repaired or replaced may include items such as: roofing, siding, foundation, windows, doors, painting, interior walls/ceilings, flooring, heating, air conditioning, electrical and plumbing systems. In addition, modernizing or upgrading rooms. All areas of the home must be brought up to code and meet the Minimum Housing Quality Standards, as verified by inspections by City Staff.


Contracting for Work

Homeowner is responsible for the solicitation and selection of all contractors. Work must be completed by a licensed, insured contractor.


More Information

If you think you may qualify or would like additional information, please contact Kevin Conroy at conroyk@cityoflacrosse.org or (608) 789-7336 or Ashley Marshall at marshallas@cityoflacrosse.org or (608) 789-7513.

Rental to Owner Occupied Conversions: Available City-Wide.


Project Selection Process

There are limited funds available for the respective programs. All requirements identified for eligibility must first be satisfied and then project selection will be awarded based on the scoring system below:

Incentive Points Achieved Points Available Check If Meet Criteria Description
Exterior Needs Improvements
4
Property Inventory Evaluation (PIE) identifies property as Below-High to Below-Low https://gis.cityoflacrosse.org/maps/housing_market_index/

2
PIE identifies property as Standard (High, Average, Low)

0
PIE identifies property as Above-High-Above Low
Curb Appeal Enhancement
4
Project includes work that will maintain or restore the historical character of the home or significantly improve the home's exterior.

4
Extra exterior architectural details will be added as a result of this project.
Use of a single contract for all work.
3
1 contractor utilized.

2
2 or less contractors.

0
3 or more contractors
Detail of Plans and Specifications and Bids Provided
3
Bids and plans and specifications included

0
No bids provided, no plans or specifications included
TOTALS 0 18

If no pie scoring available, staff will use discretion on which category the property meets. Staff may also change PIE score according to its judgement and discretion.

Financing and Loan Example

Example Parameters
FMV $97,500
Current Mortgage Balance: $76,000
Initial LTV 78%
Loan and Homeowner Contribution Details
Total Project Cost $46,667
Loan Amount $35,000
Homeowner contribution of 25% $11,667
Exterior Improvements required 25% $11,667
Projected New Property Value (Equalized Value):Assumes that 50% of the improvement will be added to determine equalized value
$46,667 @ 50% $23,234
Initial FMV $97,500
Equalized Value $120,934
Indebtedness
Initial Mortgage Balance $76,000
Renovation Loan $35,000
Total Indebtedness $111,000
New LTV 97% (≤ 100% qualifies)

Application

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