Am I required to spend any of my funds?

It is common for home repair costs (including soft costs like permits and drawings) to exceed the original cost estimate. Therefore, the Rental Improvement Fund requires an additional 20% of the estimated project cost to be set aside to cover possible cost overruns. This can be achieved one of two ways:

• RIF borrowers can set aside 20% of the loan to cover potential cost overruns. That would mean the repair cost estimate should not exceed 80% of the maximum loan amount. For example, for a $25K/10Y loan, the repair cost estimate should be no more than $20,825 so that $4,165 can be set aside within the loan for contingencies.
• RIF borrowers can use some of their own money to start the repair work, and the RIF loan will cover the rest, up to the total loan amount. For this option, applicants will need to provide proof that they have funds on hand to cover at least 20% of the project cost upfront as part of their RIF application.

Does renting a room in my primary residence count as being a landlord?

Renting a room to someone does not qualify you as a landlord eligible for the Rental Improvement Fund. You may also live in the rental property to be repaired, as long as the property has at least  one other housing unit that is rented (for example, a duplex).

Is there a landlord income requirement for the Rental Improvement Fund?

No. There is no income requirement for landlords.

Are corporate entities such as LLCs eligible for the program?

Landlords may apply for RIF loans to repair properties that are legally owned by an LLC. Landlords must meet the eligibility requirements as an individual, including full or partial ownership of less than five properties/15 units. Copies of the certificate of organization or articles of incorporation are required as part of the application.

My property is currently vacant. Can I still apply for the Rental Improvement Fund?

Vacancy requirements vary slightly between the two loan products. For Loan Option 1, unoccupied properties must have an active rental license in order to be eligible. For Loan Option 2, unoccupied properties must have an active rental license OR one that expired within the last 2 years.

In both cases, a rental license must be obtained immediately after repairs are complete.

Do tenants have to be using Housing Choice Vouchers (HCVs, also known as Section 8)?

No. The unit rent must meet the affordable rent requirement, but it does not have to be paid through voucher. However, landlords who rent to tenants with an HCV are eligible and encouraged to apply for RIF loans. HCV units are not subject to the affordable rent limits and landlords can continue to request rent increases through PHA.

What kinds of repairs can be paid for with RIF loans?

RIF loans may only be used to repair the specific rental unit for which you apply. Repairs must address habitability concerns, improve energy or water efficiency, or make units accessible for individuals with disabilities. Repairs that are covered include, but are not limited to:

• Asbestos, mold, and lead remediation
• Electrical and plumbing improvements
• Energy audit and weatherization improvements
• Fire alarm and sprinkler system installation or upgrades
• Heating and cooling system repairs and upgrades
• Improvements to carpeting and flooring
• Pest control
• Roof repair or replacement
• Structural repairs

What is the maximum loan amount available?

The maximum loan for Loan Option 1 is $24,999 per property. The maximum loan under Loan Option 2 is $50,000 per unit, and up to $100,000 for multi-unit properties.

The loan maximum per landlord is also $100,000. This means that landlords who own more than one rental property can apply for more than one loan, but the total of all loans made to a single landlord cannot exceed $100,000. Loan Option 1 and Loan Option 2 cannot be combined to repair one multifamily property.

How do I apply for a Rental Improvement Fund loan?

To begin the application process, we strongly encourage you to first attend our information session to learn more about the program, repair project management, and working with contractors. Sign up for a session at https://rental-improvement.phdcphila.org/#/EducationSessions

Next, gather the documents you will need:

• Current lease for unit(s) to be repaired.
• Notice to Tenant Form signed by you and the tenant(s) living in the unit(s) to be repaired. Download a copy here.
• For Loan Option 2, please ask current tenants in units that will benefit from repairs to complete this tenant household income attestation as part of your loan application:  https://bit.ly/RIFtenantincome
• Scope of work with itemized cost estimate for repairs from a licensed contractor, if available. If you do not have a scope of work, you can still apply but your application will not be considered complete until you have submitted a cost estimate from a licensed contractor.
• Bank statement proving you can cover 20% contingency costs, if the repair cost is more than 80% of the maximum loan amount).

Once your documents are gathered, complete the online application. PHDC will review your application and City records for eligibility and contact you to request any missing items. If your application meets eligibility screening requirements, you will be invited to continue the process.

PHDC will then schedule an initial inspection to confirm the repairs needed at your property and the approximate cost of the project. Once these steps are successfully completed, you will sign the documents to close the loan.

In a multi-unit building, are all units subject to the affordability requirements?

All units that are receiving the benefit of the proposed repairs are subject to the affordability requirements.

If repairs are taking place only within a specific unit (i.e. bathroom upgrades, flooring replacement), then only that unit would be subject to affordability requirements. However, for building-wide repairs like roofing, electrical upgrades, or improvements to common areas, ALL units in the building will be subject to the affordability requirements.

How long does the whole process take?

In general, it can take 3-4 weeks from the date of the application to loan closing if all documentation is submitted promptly. The review process can take up to 10 business days once you have submitted all required documents. If the application is found to be eligible, a PHDC inspector will schedule an inspection within approximately 5 business days. If the inspection doesn’t highlight any major discrepancies between the repair need and work proposed on the loan application, closing documents will be sent out for signature within 1-3 business days.

While project timelines vary significantly depending on the size and complexity of repairs, all repairs must be completed within one year of loan closing.

What is the landlord information session requirement?

You must complete a one-hour landlord information session before being approved for a RIF loan. The session will provide an overview of the RIF program and process, an introduction to repair project management, tips for selecting a contractor, an explanation of construction permit requirements, and an introduction to fair housing law. Sessions will be offered virtually. Sign up for a session at https://rental-improvement.phdcphila.org/#/EducationSessions

Does PHDC have contractors who will determine what repairs are needed and complete the repair work?

No. You must hire your own contractor. Any contractor who is licensed and insured can be hired to do repair work with a Rental Improvement Fund loan.

Will PHDC help me choose a contractor?

PHDC does not provide contractor information or recommendations. You will learn about how to choose a reputable licensed contractor in the landlord education session. You can find a list of licensed contractors on the City website at https://li.phila.gov/Contractor-Lookup/ Choosing a licensed and insured contractor will be your responsibility.

Is a general contractor required for Rental Improvement Fund projects?

Hiring a general contractor is recommended, but not required, for Rental Improvement Fund projects. If you have experience managing repair projects, you can choose to hire subcontractors directly and coordinate the work yourself. You will be required to submit proof of current licensure and insurance for all subcontractors.

Where can I get help with the application?

PHDC’s Help Desk is available via email and phone to answer questions about the program and application process. A PHDC staff person will be assigned to help you navigate the program as soon as you submit the online application. Since we may reach out by email, check your inbox and spam or junk folder regularly after your submission. Neighborhood Advisory Committees (NACs) can also provide computer access and assistance with the online application.

Where can I get help with the permitting process?

The Philadelphia Permit Navigator is a simple method for determining what type of permit(s) you need for your repair project. Go to https://permits.phila.gov/ select the Residential Portal option, and answer the quiz questions to get your result. There is also a form to request email assistance from City staff.

What are the basic loan terms for Loan Option 1?

	25K/10Y Loan
Minimum Amount	$10,000
Maximum Amount	$24,999
Term Length	10 years
Interest Rate	4%

Do I have to pay the loan back?

For the $25K/10Y loan, 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.

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.
• 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.

How do I apply for loan forgiveness for the $25K/10Y loan?

You must apply to be considered for loan forgiveness annually by submitting a copy of the lease and a rent certification form for any units repaired with RIF loan funds. PHDC will also review City records to confirm your L&I violation history, rental license status, and property ownership records. 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 4% interest.

Are there early repayment (prepayment) penalties for Loan Option 1?

If you take out a $25K/10Y RIF loan and choose to fully repay it during the first three years of the loan term, you will pay a penalty. The penalty schedule for Loan Option 1 is:

Year	25K/10L Loan Early Repayment Penalty
1	$5,000
2	$2,000
3	$1,000
4-10	None

What are the basic loan terms for Loan Option 2?

	$50K/15Y Loan
Minimum Amount	$25,000
Maximum Amount	$50,000
Term Length	15 Years
Monthly Payment	Begins 1 year after closing
Interest Rate	0%-4%

*$50K/15Y RIF loans are subject to a 0% interest rate if program affordability requirements are met during the entire loan term.

Is there a tenant income requirement for the Rental Improvement Fund?

Yes. To be eligible for a loan, the current tenant households living in units that will benefit from RIF repairs must earn under 60% of Area Median Income (AMI), as shown in the chart below. If the unit is vacant, landlords are required to rent to a household that earns under 60% AMI as soon as repairs are complete. Tenants in units that will benefit from repairs are required to complete this income attestation form as part of the loan application:  https://bit.ly/RIFtenantincome

Household Size	1 Person	2 People	3 People	4 People	5 People	6 People	7 People	8 People	9 People
Income	$46,920	$53,580	$60,300	$66,960	$72,360	$77,700	$83,040	$88,440	$93,720

What is the maximum loan available?

The loan maximum per rental unit is $50,000 for the $50K/15Y loan type. The loan maximum per landlord is $100,000. This means that landlords who own more than one rental unit can apply for more than one loan, but the total of all loans made to a single landlord cannot exceed $100,000. A $25K/10Y loan and a $50K/15Y loan cannot combined to repair one multifamily property.

What are the underwriting criteria for Loan Option 2?

Applications for Loan Option 2 are underwritten on a property-level basis; landlord income and credit scores are not taken into account. The property where the repairs will take place must have a debt service coverage ratio (DSCR) of above 1.2 once the RIF loan amount is taken into account. Applicants will be asked to list all rental income for the property, along with proof of current mortgage payments, and the cost of annual property insurance and property taxes.

Do I have to pay the loan back?

Yes. For the $50K/15Y loan, loan principal will be amortized on a monthly basis, with the first monthly payment due one year after the loan closes. The interest rate will be 0% if the borrower meets the requirements listed below. If you do not meet the requirements or the property is sold, the outstanding principal must be repaid at 4% interest.

In order to qualify for the 0% interest rate, 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:

• Annual rent increases cannot exceed 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 of the loan term.
• 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 and property insurance during the loan term.
• You must continue to own the unit(s) during the loan term.

How do I apply for the 0% interest rate for the $50K/15Y loan?

You must apply annually by submitting a copy of the lease and evidence of property insurance. PHDC will also review City records to confirm your L&I violation history, rental license status, and property ownership records. If you do not apply for or meet the requirements for 0% interest each year, you will have to repay the unforgiven portion of the loan at 4% interest.

Are there early repayment (prepayment) penalties for Loan Option 2?

No. If you take out a $50K/15 RIF loan and choose to fully repay it, there is no prepayment penalty for Loan Option 2.