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STATE’S SMALL RENTAL PROPERTY PROGRAM MAKES ROUND TWO AWARDS TO RESTORE AFFORDABLE RENTAL PROPERTIES

The Road Home Small Rental Property Program (SRPP) recently issued more than $300 million in new funding to help small Louisiana based property owners restore their storm damaged properties. The first Round 2 letters were sent to Owner-Occupant applicants during the week of September 16-22, 2007 and the remaining awards were mailed out to the “general pool” of owners during the week of September 30-October 6, 2007. 

The Round 2 funding will help to restore approximately 4,014 properties with a total of 7,685 units. Of those, 6,556 units will rent at affordable rates for low- to moderate income level working families. The other units will be occupied by residents owners in small rental properties and market rate tenants in those cases where the owned chose to provide a mixed income building. Conditional Award amounts averaged $75,000 per property and $45,000 per assisted unit.  In addition, the program also awarded nearly $75 million from “recycled” Round 1 funds – bringing the total for new Rental Awards in Round 2 to $375 million. All told, these awards will assist 5,032 properties with 9,504 rental units, including 8,261 affordable units. 

Funding for the program is allocated by Parish based on the amount of rental housing damage each Parish received from the hurricanes of 2005.  Within each Parish, applications were scored and ranked against each other based on their responses to a series of questions regarding their property and the amenities they committed to offering their tenants when the units are completed and ready to come on line.  The highest scoring priority was given to owner occupants of small rental properties.  These owners, who will live side by side with their tenants, are an essential element of the area’s recovery and they have always been the Small Rental Property Program’s  number one priority.  Properties that were owned by smaller owners (those who owned a total of 20 units or fewer) were next in line, ranking ahead of properties that were owned by larger owners (those who owned between 21 and 100 units).  Similarly, property owners who owned a storm damaged property were ranked ahead of those who purchased a damaged property after the storm.    

In summary, the Program has issued a net total of $502 million in conditional awards.  This total includes the $300 million in new funding as well as awards from the Round 1 funding.  The $502 million total will produce 11,507 units including 9,975 affordable rental units, in a total of 5,939 properties.

The chart below shows the number and amount of the awards that have been issued by Parish in Rounds One and Two.

 

Interest in the SRPP remained extremely strong and the State received over 12,000 applications in response to the Round 2 offering.  All Round 2 applications that were not funded due to an insufficient score will be placed on a waiting list so they may receive awards as funding becomes available.  Applications that were either incomplete or contained contradictory information are being sent back to the applicants who will be given an opportunity to complete or correct their applications so they can be scored and placed on the waiting list for additional funding as it becomes available.  This approach ensures that all available funds will be allocated to Louisiana owners as rapidly as possible and provides the State an opportunity to reach out to those applicants who took the time to fill out an application but were not able to receive funding as a part of the Round 2 awards announced above.        

The Conditional Awards offered by the Program will be converted to cash payments when the property has completed an environmental review, as required by Federal statute, and the owner delivers a finished property that meets the State’s building code and includes the amenities he committed to provide.  Owners are encouraged to use their conditional award to obtain construction financing from conventional lenders if they need it to bring their property back on line.  This “reimbursement” structure ensures that funds will only be spent on properties that meet the Federal spending guidelines and provides assurance that the State will comply with HUD’s requirements.

For more information on The Small Rental Property program or to request an application, visit www.road2LA.org/rental or call 1.888.ROAD.2.LA (1.888.762.3252). TTY callers use 711 relay or 1.800.846.5277.

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