Rental Housing Rehabilitation Program

The City of Watsonville offers a Housing Rehabilitation Program to help homeowners who rent to low-income households pay for necessary repairs. In addition to receiving financial assistance from the City’s Community Development Block Grant Funds (CDBG), the Program also helps homeowners:

• Determine the work that needs to be performed and cost;
• Prepare plans and construction contracts;
• Obtain permits;
• Locate a contractor;
• Provide temporary relocation services for tenants, if necessary; and
• Oversee the construction process.

Eligibility Criteria

Applicants must own and rent the home needing repairs to tenants whose gross household income is less than the limit for CDBG funds based on household size. A household includes anyone, regardless of age, who will reside in home. Household assets will be considered when determining household income. The current income limit can be found by clicking on the tab for PROGRAM LIMITS on the menu bar to the left of this screen.

 

In addition to being located within the City limits, the home’s value cannot exceed the Program limits, which are based on the median purchase price for the area.

Work to correct the following is eligible under the Program:

• Code violations
• Structural deficiencies
• Health and safety deficiencies
• Disabled access needs
• Failing building systems (i.e. roofs, plumbing, electrical, etc.) or systems where failure appears imminent.

Other repairs and/or improvements such as painting, landscaping, etc., that would not otherwise be required, are evaluated and considered on a case-by-case basis per Program requirements.

Loan Terms

Repayment of the loans is based on the applicant’s ability to pay, which is determined during the loan approval process. Payment plans are amortized from 15-30 years at 3% interest, but may also be partially or fully deferred depending on the project’s financial analysis.

The amount of assistance is subject to funding source subsidy limits as well as other considerations such as the home’s equity since this is a loan that will be recorded against the property.

Affordability Requirements

In exchange for the assistance provided through this Program, homeowners must agree to rent the rehabilitated property to tenants whose gross household income does not exceed the maximum CDBG income limits based on assumed household size at the maximum CDBG rent limit based on number of bedrooms for a set number of years. Assumed household size is defined as one person per bedroom plus one. For example: if you have a three bedroom rental unit, the assumed household size would be four.

 

For more information about the City’s Housing Programs, call (831) 768-3080 or visit our Contact Us page.