Fairmont Launches Rehabilitation Loan Program to Increase Housing Inventory

The entire United States is facing a housing shortage, with a deficit of 2.8 million homes that could take more than a decade to resolve. Every community effort counts, and the City of Fairmont, Minnesota, is taking steps to address the housing needs of its current residents while creating space for new ones.

“Everyone needs more housing,” says Ned Koppen, Economic Development Coordinator for the Fairmont Economic Development Authority (FEDA). “But we’re not hiding from the problem. We are in a good place because we have weekly, if not daily, conversations about housing.”

FEDA and the City of Fairmont recently debuted the Rehabilitation Loan Program through the Local Housing Trust Fund. The program is designed to assist residents in upgrading existing single-family and multi-family housing units, maintaining housing inventory in the area. By focusing on the properties already built in the community, the City of Fairmont can increase access to safe, affordable ownership and rental options.  

There Are Three Rehabilitation Loan Program Options

The Rehabilitation Loan Program is designed to support three types of housing units, maximizing the pool of people who can apply for assistance. The three categories for the loan are:

• Single-Family Owner-Occupied Housing
• Single-Family Rental Housing
• Multi-Family Rental Rehabilitation

The loan will fund 50% of the total project cost up to $25,000 for single-family units and up to $10,000 for each apartment unit, for up to four units (totalling $40,000). The money is issued as a zero-interest, deferred, forgivable loan. FEDA will forgive 10% of the loan each year until 0% is due.

This is expected to be an ongoing program as long as funds last. Applications are currently open. 

The Rehabilitation Loan Program Covers a Wide Scope of Work

The goal of the Rehabilitation Loan Program is to increase the affordability of necessary housing repairs. This allows people to continue living in existing spaces (preventing abandonment) while also improving the living experiences of those who rent locally. Adults who are aging in place can continue to enjoy their homes, while low-income renters can have a safe and well-built place to live.

The scope of eligible work highlights essential housing functions and code requirements. Common work items include:

• New roofing, windows, exterior doors, and siding.
• Electrical and water/sewer infrastructure.
• Energy-efficiency improvements, furnace upgrades, and water heater replacement. 
• Interior improvements, including sheet rock, painting, and carpeting.
• ADA accessibility improvements, including the installation of grab handles and ramps.
• Addressing state building code and city code violations.

The project must meet the city code and Minnesota Residential Code requirements. There are other eligibility requirements, including income requirements, to qualify for the loan program. Review the criteria in the documents below to learn more.

Single-Family Rental Housing Rehabilitation Loan Program

Single-Family Owner-Occupied Housing Rehabilitation Loan Program

Rental Apartment Rehabilitation Loan Program

Applicants Submit Their Projects to FEDA

Anyone interested in the Rehabilitation Loan Program should contact Ned Koppen at nkoppen@fairmont.org to receive and submit an application. Once an application is submitted, Koppen brings it to the loan committee for review. If approved, the application is then presented to the City Council.

While Koppen cannot provide a firm timeline for when applications will be reviewed, he says that the City Council meets twice a month, so it should not be a prolonged process. 

Housing Inventory Contributes to Economic Development

Housing remains a key economic development issue as communities strive to retain and attract residents. While FEDA is meeting with developers to construct new houses, this program addresses the needs of existing homeowners and tenants. Housing solutions must support people from all walks of life who have varying needs. 

“If you want new people in your community, you need housing choices,” says Koppen. “You also need opportunities for families to grow and move into other types of housing. Different housing options make it easier for employers when they are hiring. It helps every community at every level.”

The construction of new rental apartments can support young adults who have recently entered the workforce, but the renovation of existing homes can help families that are ready to grow. Repairs and ADA accommodations allow people to age in place so they can spend their final years in Fairmont.

“I hope these solutions resonate within our community,” says Koppen. “I want to help people who don’t have the means to repair where they are living. It’s important that the community knows that we understand their needs and are working to find solutions.”

Contact FEDA About the Rehabilitation Loan Program

Even if you aren’t sure if you qualify, contact Koppen and the team at FEDA to discuss the loan program. Review your project and its costs to see if you are eligible. There may be other opportunities to receive support for your housing project or renovation needs.  

Housing is right for everyone, but the City of Fairmont is addressing the issue head-on. Learn more about what it’s like living here and the housing opportunities available.