Prairie Five is currently accepting applications for the Minnesota Small Cities Development Program grants (MSCDP).
Prairie Five is currently accepting applications for the Minnesota Small Cities Development Program grants (MSCDP). In 2017, the MSCDP awarded the city $716,000 in grant funds for the purpose of rehabilitating owner-occupied residential housing and commercial buildings in Montevideo.
The grant was awarded to the city by the Dept. of Employment and Economic Development (DEED) with funding provided by the Dept. of Housing and Urban Development (HUD).
For Prairie Five and the City of Montevideo, simply applying for the grant program was a job in and of itself. According to Laura Milbrandt of Prairie Five Community Action Council, the MSCDP grants are competitive grant applications that begin with a pre-application process in Nov. of each year. “Montevideo hasn’t received one of these grants since 2012, so Prairie Five decided to venture out on our own and write a grant. We then met with Montevideo City Manager Steve Jones who said the city was ready to work with us and be a part of the grant application process,” said Milbrandt.
She went on to explain that, as the grants are competitive, an average of 50 communities in Greater Minnesota apply for these grants each year. DEED then reviews each application and the number is reduced to around 35 applications which go through a final review process. Once that is complete, the grants are awarded.
In previous years, the City of Montevideo has received several of these grants. Prairie Five has done the field administration of those grants in conjunction with the general administrator who initially wrote the grant. This was Prairie Five’s first Small Cities Grant Application as the general administrator/grant writer.
Milbrandt wrote the grant application on behalf of Prairie Five and the city. Originally, it was written to include owner occupied rehab, commercial rehab, and rental rehab. However, the rental rehab was cut from the project by DEED during its review process.
The application process in itself is very involved. Milbrandt said: “The application process included surveying areas in Montevideo for need, and eligible households and businesses. This in turn led to defined target areas within the community where those households or businesses in the target areas can apply for grants. If they are found to be eligible through an application process, they will then receive a Small Cities Grant.”
The full application from cities are normally due in Feb., with the grants being awarded in March or April. However, there was a delay in the awarding of the 2017 Small Cities grants due to HUD not awarding the funds to the states as early as they normally do.
“The Small Cities grants are typically a two-year grant that would have been scheduled to close Dec. 31, 2019. Because of the delay, prospective applicants will now have until Sept. 30, 2020, to apply for grants,” Milbrandt said.
The city has received $375,000 to provide housing repair loans to 20 income eligible homeowners living within the target area of Montevideo. Homeowners who are low to moderate income are eligible to participate in the program. The following are some of the eligibility requirements to secure a grant:
• The applicant must own or be purchasing a property within the target area of the city of Montevideo.
• The home to repaired or improved must be the applicant’s principal place of residency.
• The applicant must meet income eligibility guidelines.
• The home must be insured.
• The applicant must be current with their real estate taxes.
• City utilities must be current.
The average Montevideo Housing Repair Deferred Loan is $18,750. They will also need to furnish a match to the Montevideo Housing Repair Program. Prairie Five will assist in determining the match and other resources that may be available to fund the match. Seventy-five percent of the total cost of repairs would be loaned as a 0-percent deferred loan. Twenty-five percent would be the homeowner’s match.
A deferred loan is a loan with no monthly payment and no interest will accrue, which will be forgiven 10 percent each year or will revert into a grant if the property does not change ownership within 10 years.
Examples of eligible repairs include: roofing, foundations, siding, windows, heating units, electrical, plumbing, and health and safety items.
Prairie Five has complete details about the housing repair process.
The City of Montevideo also received $250,000 to provide commercial rehabilitation loans to 10 commercial buildings in the target are in Montevideo. The funds can be used by the business owner to make repairs to their buildings.
Funding is in the form of a combination of the following proportions of total cost:
• 70 percent of the project up to the grant maximum would be a 0-percent deferred loan with a 10 year term and forgiven 10 percent per year.
• 30 percent of the project would be owner financed.
The business owner would have no monthly payments, and the loan would revert into a grant if the property does not change ownership within 10 full years.
The average grant funds available for each project is $25,000, and eligibility requirements include:
• The property owner is the applicant with no income restrictions.
• The building must eligible under a slum and blight designation.
• Interior repairs are limited to ADA specifically designated code violations, but do count toward mandatory matching requirements.
• Work is governed by Davis Bacon and Related Acts unless the project totals are less than $2,000.
A full list of requirements and eligible repairs can be obtained by business owners from Prairie Five.
For more information on how to take advantage of these programs, contact Prairie Five Programs at 320-269-6578, or visit their website at <www.prairiefive.org>
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