Rental Rehab Program

About the Program 


The City of Battle Creek rental program uses Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD) to support the development and rehabilitation of quality rental housing that will increase the housing density and enhance the vibrancy of mixed use neighborhoods, providing housing that is walkably connected to shopping, parks, jobs, schools and other community amenities.  Criteria for prioritizing projects proposed for funding will include the following:

  • Rental projects will generally be limited to properties located in the downtown area or along a major corridor for which rental housing is the highest and best use.  A wide variety of building types will be eligible, but may include small mixed use buildings, duplexes, coach house our other auxiliary structures, etc.  The City will not generally fund the development or rehabilitation/construction of single family homes as rental properties.
  • The City will prioritize properties where the owner is an occupant in one of the units, such as the rental unit of an owner-occupied duplex or a mixed-use building which includes commercial space housing the building owner’s business.  The City will not generally fund conversion of single-family homes to 2 or more units.
  • The City will prioritize buildings which improve vacant or underutilized space, such as the conversion of an unused second floor into an apartment.

Availability of Grant Funds


A total of $175,000 available for the 2017-2018 program year (July 1, 2017 through June 30, 2018).  

Pre-apply


Pre-applications are available at:
City Hall 
10 N Division Street, Room 117
Battle Creek, MI 49014

You may also download the Rental Rehab Application and return it to our office.

Pre-application Deadline


The City will accept for consideration all pre-applications submitted by 4:00pm on Thursday, October 5, 2017 to the Community Development Office at City Hall in Room 117.  After the City reviews the pre-application, if the project seems viable the property owner will be given a more comprehensive application to complete.  

In the event there are funds not allocated to projects after the October 5, 2017 date, the City will continue to accept pre-applications on a first come, first considered basis.  The status of the program will be updated on the City’s website.

Eligible Applicants

  
  • Building owners of suitable structures, including prospective buyers with site control.  Owners may be individuals, corporations, or partnerships, including nonprofit corporations.
  • Qualified Community-Based Development Organizations (CBDOs) may propose new construction.

Eligible Costs


The actual cost of rehabilitating housing unit(s), including:
  • Costs to meet applicable rehabilitation standards for the housing;
  • Energy-related repairs or improvements benefiting the housing;
  • Improvements required to facilitate use of the housing by persons with disabilities;
  • Abatement or reduction of lead paint hazards to enable the housing to meet applicable federal requirements.

Project Conditions

  
  • Owner participation. The building owner must provide at least 25 percent as leverage for the total project cost, including improvements to the non-housing portions of the building.  To count toward this leverage requirement:
    • Owner funds must be documented prior to construction start;
    • The City must approve all rehab measures undertaken (both housing and non-housing) and their reasonable cost prior the work being done;
    • Improvements must be done and paid after City funds are committed to the project and before the final payment of CDBG funds for housing improvements.
  • Limits of assistance. City funding will be limited to the lesser of (a) $40,000 toward the creation of a new or $25,000 per existing units or (b) 100 percent of the cost of improvements to the housing.
  • Tenant income limits. A minimum of 51 percent of the housing units (1 unit in a building with 2 rental units) must initially be occupied by households with incomes less than 80 percent of the area median income adjusted for family size, as determined by HUD.  The City may, at its discretion, impose longer or more stringent income requirements as a condition for undertaking the project.

80% Area Median Income - Battle Creek 

Household Size

1

2

3

4

5

6

7

8

     2017
 Income
 Limits
      

 $31,300 

 $35,750 

 $40,200 

 $44,650 

 $48,250 

 $51,800 

 $55,400 

 $58,950 

 

  • Rent limits. Units initially occupied by households with incomes under 80 percent of median income must be rented for a monthly rent no higher than the HUD Fair Market Rent.  The City may, at its discretion, impose longer or more stringent rent restrictions as a condition for undertaking the project. 

 2017 Fair Market Rent - Battle Creek, MI

0 BR

1 BR

2 BR

3 BR

4 BR

5 BR

6 BR

 

$514

$642

$806

$1051

$1,139

$1,310

$1,481

 

 

  • Financing mechanism. The City will place a lien on the property for five years in the amount of the total City assistance provided.  No monthly payment will be required and no interest will be charged.  The lien will be discharged and the amount of assistance forgiven after 5 years, if there has been no instance of default.  The following will be instances of default:
    • Uncorrected code violation(s);
    • Conflict of interest by the owner, including rental to a family member, employee or other person depriving the general public of an opportunity for rent assisted units.
  • Underwriting/risk management. The City will conduct an underwriting/risk assessment prior to committing funds to the project. The City will review:
    • The adequacy and appropriateness of the rehabilitation;
    • The completeness of the plans and specifications;
    • The reasonableness of the rehab cost;
    • The rental market for the unit(s);
    • The financial strength of the owner;
    • The long-term feasibility of the rental.

Contact

For more information, contact: Chris Lussier, Community Development Manager at 269-966-3267 or 
Email:  
cplussier@battlecreekmi.gov
 

Additional Resources

Go To: www.battlecreekmi.gov/562 for additional program information and links to local housing studies like the City's 2015 Target Market Analysis.