PEDCO Housing Acquisition and Rehabilitation Loan Program

Overview

• Short-term, zero interest equity financing for the acquisition and rehabilitation of existing single-family homes in Pierre to be sold or rented
• PEDCO funds are provided through the SDHDA Housing Opportunity Fund and include requirements and restrictions consistent with HOF/HUD terms

Eligible Borrowers

• Developers and individuals with a proven development history seeking to purchase homes for rehabilitation and subsequent resale or rent within 12 months of acquisition

Eligible Uses of Funds

• Up to 20% of total purchase price

Structure

• PEDCO may fund up to 20% of the home purchase cost
• 0% interest loan for up to 12 months but no longer than 6 months after rehab completion
• A moderate to substantial rehabilitation plan, schedule and cost estimates are required before financing
• Bank or credit union must participate in a project with a minimum of 80%

Restrictions

• Developer Fee limited to 10% of total project and paying labor
• Builder’s Profit is limited to 6 % of total project
• Qualified buyers/renters – households with a maximum income at or below 115% of Hughes County Area Median Income
• Rental rate restrictions must remain in place must be maintained for maximum of 5 years
• Typical federal housing discrimination rules apply

The Process

• Developer applies to local lender for project approval. Lenders will contact PEDCO to participate and provide approval from bank to PEDCO

Collateral

• Second on assets that bank or credit union take as collateral

Fees

• One percent of PEDCO loan amount, $150 documentation fee and any other 3rd party fees associated with acquisition, construction and rehabilitation