Information Session
What is the Rental Improvement Program?
As maintenance and repair needs grow among Philadelphia’s aging rental housing stock, PHDC is committed to ensuring that small landlords can access capital to make much-needed repairs while maintaining reasonable rents. PHDC’s Rental Improvement Fund (RIF) offers loan products to small landlords to repair their rental properties. Loans are eligible for full forgiveness if landlords meet program affordability requirements during the loan term. If requirements are not met during the loan term, repayment with interest will be required.
What Repairs are eligible?
RIF cannot cover the cost of repairs completed before the loan is closed. All repair work must be done by a licensed and insured contractor. Loan proceeds can be used for any approved repair that addresses a safety, health, habitability, energy efficiency or water efficiency, concern. Examples of repairs that are covered include (but are not limited to):
- New and repaired roofs, windows, doors
- Repairs to deteriorated walls, floors and ceilings
- Asbestos, mold, and lead remediation
- Electrical and plumbing improvements
- Heating and cooling systems, and energy efficiency upgrades
Which landlords and properties are eligible?
- Landlords who own no more than 15 rental units across no more than 5 rental properties are eligible. This total includes rental properties owned by individuals and associated LLCs inside and outside of Philadelphia.
- Landlords must be able to produce a tax compliance certificate.
- Landlords must be current on all mortgages secured by the property.
- After RIF-funded repairs are completed, landlords must obtain and maintain an active rental license.
- Rental properties not already occupied by tenants must be occupied by tenants within one year of repair completion.
- Rental properties must be able to comply with the building code after RIF-funded repairs are complete, which means the cost of all essential repairs must fit within the RIF loan amount.
- For mixed-use and partially owner-occupied properties, RIF funds can only be used for repairs to the residential rental units and to building-wide systems. Funds may not be used for work in commercial or owner-occupied units.
- Units where the rent is affordable to households earning at or under 60% AMI (see rent guidelines chart below).
Download the English/Spanish Rental Improvement Fund (RIF) flyer
Download the Commercial English/Spanish RIF flyer
Download the Commercial English/Chinese RIF flyer
Application Process
Read the Detailed Loan Terms Below
Gather required application materials.
In addition to repair estimates and
current leases, you’ll need the following RIF form:
At any point in the process:
Contact Us
Phone: 215-448-3006
Email:
Rentalimprove@phila.gov
Maximum current rent for all units that will benefit from RIF repairs
| Maximum Monthly Rent by Number of Bedrooms | ||||||
|---|---|---|---|---|---|---|
| 0 (Studio) | 1 | 2 | 3 | 4 | 5 | 6 |
| $1,254 | $1,344 | $1,612 | $1,863 | $2,079 | $2,293 | $2,508 |
Loan Products
RIF will lend a maximum of $100,000 to a single landlord.
All RIF loans are secured with a mortgage placed against the property.
Minor Repair Loan Product
RIF cannot cover the cost of repairs completed before the loan is closed. All repair work must be done by a licensed and insured contractor. Loan proceeds can be used for any approved repair that addresses a safety, health, habitability, energy efficiency or water efficiency, concern. Examples of repairs that are covered include (but are not limited to):
- Loan amount: $10,000-$24,999 per property
- Loan term: 10 years
- Forgiveness schedule: The loan will be forgiven 20% annually beginning in Year 6 if conditions are met.
- Interest Rate: 6% if affordability requirements are not met
| Maximum Estimated Repair Costs at Application |
Contingency Included in Loan Amount |
Maximum Loan Amount |
| $20,800 | $4,199 | $24,999 |
Moderate Repair Loan Product
- Loan amount: $25,000 – $100,000 – see table below
- Loan term: 15 years
- Forgiveness schedule: The loan will be forgiven 10% annually beginning in Year 6 if conditions are met
- Interest Rate: 6% if affordability requirements are not met
- Underwriting: The projected rental income must cover existing debt payments and other property-related costs (1.2 Debt Service Coverage Ratio)
- Repair requirements: The following repairs and upgrades may be required as part of the work scope for the moderate repair product:
- Weatherization
- Knob-and-tube remediation
- Roof repair or replacement
- Fuel oil or electric baseboard heater removal
- HVAC upgrade
- Electrification readiness measures
- Energy efficient appliance upgrades
| Maximum Estimated Repair Costs at Application |
Contingency Included in Loan Amount |
Maximum Loan Amount | |
| 1 Unit Properties |
$42,000 | $8,000 | $50,000 |
| 2 Unit Properties |
$42,000 | $8,000 | $50,000 |
| 3 Unit Properties |
$63,000 | $12,000 | $75,000 |
| 4+ Unit Properties |
$84,000 | $16,000 | $100,000 |
Detailed Loan Terms
Do I have to pay the loan back?
Loan repayment will be deferred and the loan will be fully forgiven if the affordability requirements below are met. Deferral means you do not have to make any payments on the loan. If you do not apply for or meet the requirements for loan forgiveness each year, you will have to repay the unforgiven portion of the loan at 6% interest.
In order for repayment to be deferred and for the loan to be forgiven, PHDC will request a copy of the current lease for the repaired unit(s) on an annual basis and review City records to ensure the following requirements are met:
- Any rent increase cannot be more than 3%, unless you lease to a tenant using a Housing Choice Voucher (HCV), in which case the landlord can continue to request rent increases from the Philadelphia Housing Authority (PHA).
- You must provide a current lease for the repaired unit(s) each year. If building-wide repairs are completed, you must provide a copy of the lease for all units in the building.
- The property must have any code violations identified by the Department of Licenses & Inspections (L&I) corrected within six months during the loan term.
- You must maintain an active rental license during the loan term.
- You must continue to own the unit(s) during the loan term.
Are there early repayment (prepayment) penalties?
If you take out a RIF loan and prepay during the first five years of the loan term, repayment with interest will be required and you will pay a penalty. The penalty is $5,000 for the Minor Repair loan product and $10,000 for the Moderate Repair loan product.
| Minor Repair 25K/10L Loan up to $25K | |
|---|---|
| Year | Early Repayment Penalty |
| 1 | $5,000 |
| 2 | $5,000 |
| 3 | $5,000 |
| 4 | $5,000 |
| 5 | $5,000 |
| 6-10 | $0 |
| Moderate Repair Loan up to $100K | |||
|---|---|---|---|
| Early Repayment Penalty | |||
| Year | $25-50k Loan amount | $50-75k Loan amount | $75-100k Loan amount |
| 1 | $10,000 | $15,000 | $20,000 |
| 2 | $10,000 | $15,000 | $20,000 |
| 3 | $10,000 | $15,000 | $20,000 |
| 4 | $10,000 | $15,000 | $20,000 |
| 5 | $10,000 | $15,000 | $20,000 |
| 6-10 | $0 | $0 | $0 |
My property is currently vacant. Can I still apply for a RIF Loan?
Yes, RIF loans can be used to make vacant properties fit for habitation. RIF-repaired properties must maintain an active rental license and occupancy by tenants after repairs are completed.
