Owner-Occupied Housing Rehabilitation Loans
Many older homes in Watsonville are in need of repair and rehabilitation. Many homeowners cannot afford to pay for the necessary repairs. The City’s Housing Rehabilitation Program offers low-interest loans to eligible low-income homeowners for rehabilitation of their homes. The Program also helps borrowers to determine what type of work is needed, to prepare building plans and construction contracts, and provides construction management services from start to finish of the rehabilitation project. Funding for this program comes from various sources at various times, including state and federal grants to the City, such as: CDBG, HOME, CalHome, Joe Serna, Jr. Farmworker Housing, and occasionally others. Each type of funding comes with various eligibility terms and other requirements. Some funding sources require that the owner provide matching funds to match the loan provided by the City. For current funding availability and terms, please contact Program staff at the number below.
To be eligible for a Owner-Occupied Housing Rehabilitation loan, you must own and occupy your home as your primary residence, and your household’s total annual income may not be higher than the amount listed below next to your household size. Your household includes only those persons who occupy the home as their primary residence. Household assets, including current equity in any real estate other than the home proposed for rehabilitation, will be taken into consideration when calculating household income. Please seeTable A for current income limits.
Single-family homes located within the Watsonville city limits that are owned and occupied by low-income households may be rehabilitated with Program loans. Homes must be the principal residence of the entire household.
Eligible Types of Rehabilitation Work
The program funds are available for correction of the following problems:
1. Health and Safety Code violations
2. Structural deficiencies, including seismic upgrades
3. Building and Zoning Code violations
4. Failing building systems (roofs, plumbing, electrical and heating systems) or correction where system failure appears imminent.
5. Disabled access needs.
6. Lead and/or asbestos hazard reduction work, if determined necessary by qualified inspectors. The portion of the loan used for lead and asbestos work may be forgiveable under certain funding programs.
General property improvements, such as stand-alone energy efficiency improvements (where component or system replacement is not otherwise required), painting, and site improvements (such as driveways and walkways) will be evaluated on a case-by-case basis and will be considered of secondary priority for use of program funds.
Repayment of housing rehabilitation loans may be deferred for 30 years at a 3% simple interest rate and/or amortized over 30 years at a 3% interest rate. Payment of principal and any accrued interest is due in full upon sale, transfer, or refinance of the home. The Housing Rehabilitation Program loan, like any mortgage, will be recorded as a lien against the home. These loans are NOT usually assumable.
Rehabilitation of Rental Properties
The City also offers loans to owners of residential rental properties for rehabilitation of eligible rental units.
Please check the rental housing rehabilitation page of our website.
For more information about Housing programs, call 768-3080, or visit our Contact Us page.