Urban Enterprise Zone
Historic Facade Incentive Grant
Housing Development Loan
Downtown Housing Loan Program
The purpose of this program is to cause more people to live and
work in the downtown area. The program intends to build a market
for commercial goods and services from within the downtown neighborhood
and improve the condition of downtown buildings. The intent of the
Downtown Building Rehabilitation Loan Program is to provide financial
assistance to owners of real property that rehabilitate their buildings
and utilize the upper floors for residential space.
The loan program is intended to leverage other private equity and
mortgage funds to complete the rehabilitation. Applicants for Federal
and State Historic Preservation Tax Credits are encouraged to
apply for this program.
The rehabilitation loan funds shall be used exclusively for the
cost of physical construction of roof systems, structural systems,
electrical systems, plumbing systems, fire protection systems, heating
and cooling systems, and building insulation. Only the cost directly
benefiting the residential space shall be eligible for funding.
Buildings eligible for rehabilitation shall be located within the
Central Business District Urban Renewal Area (Poplar to Cherry,
Third to Ninth Street). Buildings fronting either side of the boundary
streets shall be eligible. Buildings must be physically and economically
capable of rehabilitation to be eligible for funding. Buildings
must be capable of meeting applicable building and housing codes
Applicants shall be considered eligible if they are the owner of
the building where the rehabilitation work is proposed and are not
in default of any taxes or debts owed to any governmental unit in
Vigo County or any bank or HUD mortgages.
A loan pool is made available through the Terre Haute Department of Redevelopment to maintain the loan fund. The amount of funds available
may be amended during the duration of the program.
Public notice of the program availability will be made by newspaper
publication. Loans will be reserved for applicants on a first come,
first serve basis according to the date and time of application
until funds are exhausted. A loan reservation will expire after
4 months if the loan is not closed.
Loans will be approved by the Executive Director of the Department of Redevelopment after the construction plans and permits, construction
contracts, private financing documents, and a proforma for the project
are reviewed by the Department of Redevelopment and found in order.
Loan approval will expire 60 days after loan closing if building
permits have not been issued and construction has not been initiated.
There will be no loan application fee.
The rehabilitation loans shall be made for 10 years at zero interest.
The loans shall be forgiven on a monthly basis over 10 years from
the date of signing the note and mortgage and reduced at a rate
of 1/120th each month if the property remains in residential use
and remains in compliance with applicable building and housing codes.
Interest on any amount of the loan not forgiven due to non-compliance
shall be at 8%. The loan may be subordinate to other mortgages on
the building and assumable by subsequent purchasers. The Department of Redevelopment may conduct inspections of the property on a yearly
basis over a ten-year period to make sure the property is in good
The maximum loan for any building rehabilitation shall not exceed
50% of the construction contract amount or $25,000 per housing unit
whichever is less. Loans under this program are intended to leverage
other private funds to finance additional rehabilitation costs.
The maximum loan amount approved for any building or building owner
shall be $125,000 in a 12 month period.
Buildings rehabilitated under this loan program will be subject
to inspection by state and local building code enforcement officers.
Construction specifications and work completed shall comply with
all applicable building and occupancy codes. The Department of Redevelopment
will assist building owners, their architects, or engineers in planning
the construction, if requested.
The loan recipient shall be required to procure a licensed, bonded,
and insured general contractor to perform the construction. However,
the owner may serve as the general contractor if experienced in
the contracting field and approved by the Department of Redevelopment.
The construction contract documents and amendments shall be reviewed
and approved by the Department of Redevelopment prior to execution
by the loan recipient.
Release Of Funds:
Loan funds shall be released to the borrower and contractor after
completion of work financed under this program as certified by the
architect or engineer. Ten percent of the loan will be retained
until the completion of all work items in the construction contract.
Prior to approval of any loan through this program, the applicant
shall document its provisions for providing 1 parking space per
unit of housing within three blocks of the property to be rehabilitated.
As a condition to the loan, the applicant shall agree that any exterior
renovation of the building will be consistent with the Secretary
of the Interior's Standards for Rehabilitation.
Equal Housing Opportunity:
Loan recipient shall comply with all State, Federal, and Local equal
opportunity laws. Applicants convicted of non-compliance with equal
opportunity laws shall have their loan called due and all loan forgiveness
This housing program shall be administered by the Terre Haute Department
of Redevelopment on behalf of the Terre Haute Redevelopment Commission.
The Executive Director of the Department of Redevelopment shall execute
all documents pertaining to the program on behalf of the Redevelopment Commission. Applications are available at the Department of Redevelopment. For additional information on the Downtown Housing Development Loan Program, please contact Phil Kesner at 812-244-2396.