Downtown Housing Development Loan Program

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The purpose of this program is to cause more people to live and work in the downtown area. The program intends to build a market for commercial goods and services from within the downtown neighborhood and improve the condition of downtown buildings. The intent of the Downtown Building Rehabilitation Loan Program is to provide financial assistance to owners of real property that rehabilitate their buildings and utilize the upper floors for residential space.

The loan program is intended to leverage other private equity and mortgage funds to complete the rehabilitation. Applicants for Federal and State Historic Preservation Tax Credits are encouraged to apply for this program. 

Eligible Expenditures:

The rehabilitation loan funds shall be used exclusively for the cost of physical construction of roof systems, structural systems, electrical systems, plumbing systems, fire protection systems, heating and cooling systems, and building insulation. Only the cost directly benefiting the residential space shall be eligible for funding.

Eligible Properties:

Buildings eligible for rehabilitation shall be located within the Central Business District Urban Renewal Area (Poplar to Cherry, Third to Ninth Street). Buildings fronting either side of the boundary streets shall be eligible. Buildings must be physically and economically capable of rehabilitation to be eligible for funding. Buildings must be capable of meeting applicable building and housing codes after rehabilitation.

Eligible Applicants:

Applicants shall be considered eligible if they are the owner of the building where the rehabilitation work is proposed and are not in default of any taxes or debts owed to any governmental unit in Vigo County or any bank or HUD mortgages.

Available Funds:

A loan pool is made available through the Terre Haute Department of Redevelopment to maintain the loan fund. The amount of funds available may be amended during the duration of the program.

Application Process:

Public notice of the program availability will be made by newspaper publication. Loans will be reserved for applicants on a first come, first serve basis according to the date and time of application until funds are exhausted. A loan reservation will expire after 4 months if the loan is not closed.

Loan Closing:

Loans will be approved by the Executive Director of the Department of Redevelopment after the construction plans and permits, construction contracts, private financing documents, and a proforma for the project are reviewed by the Department of Redevelopment and found in order. Loan approval will expire 60 days after loan closing if building permits have not been issued and construction has not been initiated. There will be no loan application fee.

Loan Requirements:

The rehabilitation loans shall be made for 10 years at zero interest. The loans shall be forgiven on a monthly basis over 10 years from the date of signing the note and mortgage and reduced at a rate of 1/120th each month if the property remains in residential use and remains in compliance with applicable building and housing codes. Interest on any amount of the loan not forgiven due to non-compliance shall be at 8%. The loan may be subordinate to other mortgages on the building and assumable by subsequent purchasers. The Department of Redevelopment may conduct inspections of the property on a yearly basis over a ten-year period to make sure the property is in good repair.

Loan Maximum:

The maximum loan for any building rehabilitation shall not exceed 50% of the construction contract amount or $25,000 per housing unit whichever is less. Loans under this program are intended to leverage other private funds to finance additional rehabilitation costs. The maximum loan amount approved for any building or building owner shall be $125,000 in a 12 month period. 

Required Construction:

Buildings rehabilitated under this loan program will be subject to inspection by state and local building code enforcement officers. Construction specifications and work completed shall comply with all applicable building and occupancy codes. The Department of Redevelopment will assist building owners, their architects, or engineers in planning the construction, if requested. 


The loan recipient shall be required to procure a licensed, bonded, and insured general contractor to perform the construction. However, the owner may serve as the general contractor if experienced in the contracting field and approved by the Department of Redevelopment. The construction contract documents and amendments shall be reviewed and approved by the Department of Redevelopment prior to execution by the loan recipient. 

Release Of Funds:

Loan funds shall be released to the borrower and contractor after completion of work financed under this program as certified by the architect or engineer. Ten percent of the loan will be retained until the completion of all work items in the construction contract.

Parking Provisions:

Prior to approval of any loan through this program, the applicant shall document its provisions for providing 1 parking space per unit of housing within three blocks of the property to be rehabilitated.

Exterior Renovation:

As a condition to the loan, the applicant shall agree that any exterior renovation of the building will be consistent with the Secretary of the Interior's Standards for Rehabilitation.

Equal Housing Opportunity:

Loan recipient shall comply with all State, Federal, and Local equal opportunity laws. Applicants convicted of non-compliance with equal opportunity laws shall have their loan called due and all loan forgiveness canceled.

Program Administration:

This housing program shall be administered by the Terre Haute Department of Redevelopment on behalf of the Terre Haute Redevelopment Commission. The Executive Director of the Department of Redevelopment shall execute all documents pertaining to the program on behalf of the Redevelopment Commission. Applications are available at the Department of Redevelopment. For additional information on the Downtown Housing Development Loan Program, please contact Phil Kesner at 812-244-2396.

Terre Haute Department of Redevelopment

Steve Witt, Executive Director
900 Wabash Avenue, Suite 201
Terre Haute, IN 47807

p. 812.244.2399