New Lending Fund for Housing Unveiled
5 Nov 2014
The Iowa Lakes Corridor Development Corporation, Community Housing Initiatives, area lenders and large employers announce the launch of the Iowa Lakes Corridor Housing Fund.
Created to promote the development of quality housing that is affordable to workers in Buena Vista, Clay, Dickinson and Emmet Counties in Iowa, the fund will encourage construction of new housing and rehabilitation of existing homes and apartments by providing low-interest loans to developers in partnership with area lenders.
Partners in the fund include Bank Midwest, Community State Bank & Insurance, Farmers Trust & Savings Bank, and Northwest Bank. Other area businesses have also committed to invest.
“Business leaders in the Corridor have been clear in their concern about the cost and availability of homes for area workers,” said Kiley Miller, CEO of the Iowa Lakes Corridor Development Corporation. “The Iowa Lakes Corridor Housing Fund is one step on the path to answering those concerns and ensuring sustained economic growth in the area."
Intentionally broad in its scope, the fund may be used for construction of single-family homes, apartments and condominiums, or acquisition and rehabilitation of existing single-family homes or multi-family rentals.
For new construction, the fund provides a deferred construction loan for a term of three years. Interest rates range from zero to 3 percent, depending on selling price or rental rate. A lender must be involved in the project. The fund will take a subordinate position to that lender and provide a maximum of 25 percent of the construction cost. The borrower must contribute a minimum of 10 percent equity.
The fund will also provide short-term financing of up to three years to help developers acquire and rehabilitate existing homes. Again, interest rates vary from zero to 3 percent. Loans will be for no more than 25 percent of project cost, not to exceed $150,000 per home or $450,000 per developer, and the developer must provide 10 percent equity. The minimum rehabilitation cost is $40,000 per home or $10,000 for each multifamily unit.
Applicants for the Iowa Lakes Corridor Housing Fund must provide a project description, preliminary site plan, construction plan and cost estimates, and evidence of control of the site. To learn more about the program, developers should contact their lending institution.