CEDAR RAPIDS — City officials this week celebrated the launch of a housing rehabilitation program that will provide homeowners up to $10,000 in forgivable loans to will transform older, rundown and moderate-condition neighborhoods.
The Neighborhood Finance Corp. is a lending program designed to encourage home updates by homebuyers and homeowners in targeted areas near the core of the community, including Wellington Heights, Mound View and Oakhill Jackson neighborhoods. The lending area will be adjusted every few years.
“It’s a great feeling,” said Cedar Rapids City Council member Scott Overland. “It will be really good for the city. It was hard, and at times we didn’t know if we’d get there. This is an example of what we can get done in Cedar Rapids now when people come together.”
Cedar Rapids officials had been eyeing the program for years and brought it to life in partnership with private businesses and banks. The 2008 flood derailed previous interest until Overland picked up the torch during his 2015 run for City Council and followed through after taking office.
People can apply at a local branch office, which opened this week in Collins Community Credit Union space at 1110 Old Marion Road, Suite A, as well as online at neighborhoodfinance.org/nfc-cedar-rapids.
The program is an extension of the Neighborhood Finance Corp. serving Des Moines and Polk County since 1990. In Des Moines, the program leveraged $8 million in reinvestment in core neighborhoods, said Stephanie Preusch, executive director of the organization.
The hope is to replicate the success and create a rising tide of values and stability in deteriorating neighborhoods in Cedar Rapids.
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The initiative is expected to provide 70 first mortgages and 25 home improvement loans in the first year. Acceptance into the program is not contingent on income levels but rather location, approved rehabilitation work and traditional loan qualification requirements.
The city of Cedar Rapids has already committed $1 million and will provide $1 million a year for the next five years, which is supposed to cover the forgivable portion of loans if the recipient remains in the home for five years and completes the improvements.
City Manager Jeff Pomeranz called it a longtime “dream” to encourage and help community members improve their properties. He described it as a second act to ROOTS, a housing program to replace homes in neighborhoods devastated by the 2008 flood.
An estimated $950,000 was raised from dozens of one-time donations from the business community to support administrative start up costs. Additionally, several local lenders have also contributed to a loan pool worth $8 million.
The program is expected to be self-sustaining, although the loan pool will need to be replenished every few years.
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