Vacant Rental Improvement Program – VRP

Frequently Asked Questions

1. Is my property eligible?
The following guidelines apply to property eligibility:

• The property must be in an area with a local service provider
• The property must not have more than five (5) units currently or post-completion
• The property must not be in foreclosure
• The completed project must be legally permissible at the time grant funds are formally committed to a property owner
• The property must have eligible vacant units or spaces (see following question)

2. What units in my property are eligible?
Existing vacant rental units or existing vacant buildings and units that will be converted to restricted rental units. The following are examples of eligible units by property type:

• Multi-family Property Units: Vacant units in multi-family properties (5 units or fewer) are eligible.
• Single-Family Property Units: Vacant single-family homes are eligible if it is used as a long-term rental. Vacant single-family homes may also be converted to rental properties of up to five (5) units. Occupied single-family homes are generally ineligible unless the home includes a separate legal and eligible vacant housing unit such as an “in-law apartment.”
• Non-residential Properties: Vacant non-residential properties are eligible for conversion to up to five rental units, if allowable by code.
• Mixed-use Properties: Vacant units in mixed-use properties are eligible.

3. What types of property owners may participate?
All participants must be the intended ongoing property owner for the duration of the 10- year regulatory period. Property owners must be legally able to participate, which means being able to execute the Participant Agreement and Declaration of Interest in the Property. Examples of eligible property owners include:

• Private individual(s).
• Certain Business Entities (e.g., LLCs) Business entities are required to disclose all principals and provide a copy of their operating agreement. Personal guarantees are required from all principals.
• Not-for-profit Organizations or Not-for-profit organizations that will retain long term ownership and management of the rental units may be eligible to participate.
• Public or Quasi-Public Entities.

4. What is the “Responsible Owner” Requirement?
Property owners must be determined by the Local Program Administrator to be a “Responsible Owner” to be eligible for participation as part of the application process. Each Local Program Administrator will establish criteria for this determination. Generally, it is expected that property owners will need to meet the following requirements at a minimum:

• Disclose all properties under their ownership and control.
• Not in bankruptcy or foreclosure.
• No outstanding federal, state, local liens on property.
• Compliant with any previous loan/grant programs.
• Not under current investigation by: Dept. of Health, EPA, HUD, state agency or local government for law or regulation violation.
• Must be current on mortgage payments, property taxes, and utilities.
• Has current comprehensive property insurance policy.

5. Will certain properties or owners be prioritized?
Yes, at a minimum, owners that live locally will be prioritized as well as owners with smaller real estate portfolios. Local Program Administrators may adopt additional prioritization criteria and can advise of any such additional criteria.

6. How much assistance can I receive through the program?
Property owners can choose from one of two grant award options as shown below. All rental limits will be capped based on the bedroom size of unit (not tenant income). The award amount maximums are based on your agreement to rent to tenants at the 60% or 80% median income levels.

• The Enhanced Award provides an incentive for renting to households at or under 60% of Area Median Income level, which also includes a lower allowable rent limit that can be charged to tenants. Maximum award per unit, $75,000, Maximum Award (for 5 units) per property $375,000.
  
• Standard Award: Maximum award per unit $50,000 , Maximum Award (for 5 Units) per property $250,000.  Tenant Household Income Limit 80% Area Median Income. The per unit award calculation is based on the number of eligible vacant units that will be rehabilitated and subject to the 10-year Regulatory Period affordability requirements.

7. Do I have to cover part of the cost?
No, there is no match or contribution requirement for property owners to be eligible to participate. However, if the grant award is not sufficient to cover the full cost of rehabilitation, a property owner will be required to demonstrate an acceptable plan for completing the full rehabilitation project, which may include evidence of available/committed funds.

8. What can the funds be used for?
Generally, any rehabilitation activities necessary to turn vacant units into habitable and marketable rental units are eligible. Funds may also be used for certain fixtures if necessary for rental and occupancy of the unit. Site work is generally not eligible except in specific circumstances. Local Program Administrators can advise you on the eligibility of proposed activities.

9. How is vacancy determined?
A unit is generally considered vacant if it is unoccupied or not legally rented at the time grant funds are committed because the unit is in uninhabitable or unmarketable condition (as determined by the LPA). There is no minimum time that a unit must be vacant for. Uninhabitable: means the unit does not meet minimum criteria as a safe and legally occupiable housing unit. If the unit is not fully code compliant for residential use, it is uninhabitable. Unmarketable: means that the unit may be legally occupiable but does not meet what would be reasonably considered acceptable conditions for decent and quality housing. Examples may include peeling paint, stained carpets, damaged ceilings, etc. The Local Program Administrator will determine if a unit is uninhabitable or unmarketable and may establish additional criteria for making such determinations. The Local Program Administrator makes the final determination regarding vacancy and unit/property eligibility.

10. Can I relocate a tenant out of a unit to rehabilitate the unit?
No, an existing tenant cannot be relocated, evicted, or otherwise displaced for the purposes of receiving program funds based on vacancy status, including instances of voluntary displacement by the tenant. The Local Program Administrator will conduct an inspection to verify vacancy and a signed attestation from the property owner will be required.

11. What are the affordability restrictions that will be placed on the units that I rehabilitate?
There are two types of affordability restrictions that will be placed on units that are rehabilitated with VRP funds:

• Tenant Income Limit: The tenant’s household income may not exceed either 60% or 80% of the Area Median Income. The Local Program Administrator will assist property owners in meeting this requirement.
• Maximum Rent Limit: There is a maximum monthly rent that can be charged to tenants occupying an assisted unit. See below for additional information on how this is determined.

Download application to read full list of requirements.