Housing Revolving Loan Fund

Loan application fee: An application fee of $100 is due when the application is submitted to MIDAS. Applications will not be processed until this fee is paid.

Loan processing fees: MIDAS does not assess a loan origination fee or charge points for writing the loan. However, MIDAS does require the borrower to pay the costs for legal review of security documents and the filing fees for such documents (currently estimated at $200 to $500), if the loan is approved by MIDAS and accepted by the borrower.

Download application materials:

Concept of "Gap Financing"

The program was established by the MIDAS Council of Governments and its funding partners to encourage new or expanded housing opportunities in the Northcentral Iowa Counties of: Calhoun, Hamilton, Humboldt, Pocahontas, Webster, and Wright. The creation and retention of quality and affordable housing for low and moderate income households serves as the main objective of the program. By providing financial assistance to development opportunities, the program will bridge the financial gap that exists between the amount conventional sources can commit for project development and the total amount needed to bring opportunities to completion.

Revolving Loan Fund Strategy

Eligible Application and Forms Assistance: Loans may be made to counties and incorporated cities within Calhoun, Hamilton, Humboldt, Pocahontas, Webster, and Wright counties. Applications may also be submitted by not-for-profit corporations, local development organizations, and private developers working in cooperation with an eligible city or county within one of the six eligible counties.

Loans may be made for the following purposes:

  • New Construction Buy-downs: To be used as a direct reduction in the price of newly constructed housing.
  • Infrastructure Improvements: To install infrastructure to support the development of residential lots or the rehabilitation of existing infrastructure.
  • Construction Loans/Contractor Guarantees: To be used as seed money to entice a developer to construct new housing, especially when uncertainty exists that a conventional construction loan may expire before the unit sells.
  • Down Payment Assistance: To be used as seed money to entice an owner to purchase a dwelling.
  • Rehabilitation/Clearance: To be used to rehabilitate residential structures or to clear a site for construction of new housing.

Project/Construction Requirements:

  • The project must be residential, or designed to support residential purposes.
  • The project must meet all applicable zoning, setback, and building codes.
  • All participating contractors must provide verification of liability and hazard insurance
  • Projects will not be permitted within designated floodplains.
  • New homes constructed must be in compliance with the Council of American Building Officials (CABO) Code, or local building codes, if any.
  • Rehabilitation of existing structures shall be to the HUD Section 8 Standards of Safe, Sanitary, and Decent if local building codes are not available.

Loan Parameters - Loans will be considered according to the following parameters:

  • Loan Amount: The maximum loan amount shall be $250,000. The minimum loan amount shall be $5,000. Applicants may have more than one active loan.
  • Interest Rate: The interest rate is negotiable according to the project proforma. MIDAS will strive for a program target of 4% below the current prime rate quoted by the Federal Reserve Bank – New York Branch, but not less than 4%. All loans will carry fixed, continuous compounding rates for the term of the loan.
  • Loan Term: The loan term may be as proposed by the applicant, but not more than ten years.
  • Equity Match: The applicant must provide an equity match (cash or value of provided project components) equal to at least 10% of the loan funds requested.
  • Loan Amortization: Loan payments will be made in equal monthly installments, except that interest only payments may be requested by the applicant for the first two years with principal payments deferred to the remaining term years.

Income Eligibility Guideline: Program funds must be targeted toward housing initiatives for low to moderate income households.

Loan Selection Criteria

MIDAS will accept applications through an open window of opportunity, depending upon the availability of funds. Applicants are urged to contact MIDAS to determine if funds are available before considering whether to spend time, effort and funds to prepare an application.

MIDAS has established a loan review committee that will review each application submitted, after a review by the MIDAS Staff. The Loan Review Committee will use the following criteria will be utilized for ranking of applications:

Need and impact of the project with consideration to include local housing conditions, resultant new economic activity, use of available other public incentives, project schedule, property tax enhancement, and other effects on the local tax base;

  • Number of housing units to be created/retained;
  • Target population's income status;
  • Percent of other funds in the project;
  • Community support/in-kind contributions;
  • Ability of the applicant to repay the loan;
  • Quality and completeness of application materials.

Program Implementation:

  1. Applicant should contact the MIDAS staff to determine whether funds are available;
  2. An application is submitted on a form designed by MIDAS
  3. The MIDAS Staff will review the application and determine whether the application is complete and is acceptable for review by the MIDAS Loan Review Committee;
  4. The MIDAS Loan Review Committee reviews the application and determines whether it is capable of being funded. This step may be accomplished through telephone discussions, polling of members, or a face to face meeting;
  5. If the application has been determined to be fundable the application is referred to the MIDAS Executive Committee for approval;
  6. The steps after MIDAS Executive Committee approval are:
    • If the application has been determined to be fundable the application is referred to the MIDAS Executive Committee for approval;
    • The applicant shall provide a legal address of the property referenced in the application. The MIDAS staff will prepare a mortgage and forward it to the applicant for signatures. MIDAS will file the signed mortgage.
    • Income verifications for benefited households will be provided by the applicant. If the loan is for a benefit type for which households will not be identified until later, income verifications may be delayed.
    • The applicant shall notify MIDAS of any historic significance associated with the land or structures on the property.
    • Provide MIDAS with evidence of insurance.

If the Loan Agreement and any required collateral documents are not signed within six months of a funding decision by the MIDAS Executive Committee, the Program Staff may reallocate the designated funds to another project.

Time Frames for Funding Decisions:

MIDAS will make a funding decision within approximately 30 days upon receipt by MIDAS of a complete application.

No costs incurred on the proposed project prior to authorization by the MIDAS Executive Committee are reimbursable under this program unless agreed upon by the Executive Committee.