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Funding

Incentives are made in the form of a no interest, no payment, forgivable loan requiring property owners to maintain affordable rent levels for up to 10 years. Awards are disbursed once the units are repaired and income eligible tenants are identified. Property owners may choose to rent one or more units on a property at one of the three rent tiers calculated to be affordable to households at 80, 65, and 50 percent of area median income (AMI). These rent levels determine the maximum amount of award a property owner is eligible to receive. See Choosing Your Awards (PDF/1MB) under the Resources and Downloads page for further discussion.

The actual award a property owner will receive is the lesser of the following two amounts:

  • The maximum award chosen from the award tables and any bonuses the owner receives, OR
  • 100 percent of the total cost to repair or reconstruct the property

Learn more about the funding process:

Award Forgiveness
A forgivable loan is completely forgiven over time and does not require repayment if all the conditions of the loan are met. Forgiveness of the loan will occur in staged intervals, depending on the level of affordability chosen by the applicant.

Awards for property owners who agree to maintain rents that are affordable to families at the 80 percent of AMI tier are forgiven in the amount of $10,000 at the end of the third year from the time the first eligible tenant occupies the unit. At the end of year five, any remaining balance up to an additional $5,000 will be forgiven. The outstanding balance of the loan, if any, will then be forgiven in five equal, annual installments.

Awards for property owners serving tenants at the 65 or 50 percent of AMI tiers are significantly higher than the 80 percent of AMI tier. These loans are more than 50 percent forgiven at the end of the fifth year from the time the first eligible tenant occupies the unit, depending on the size of the loan. The balance of the award is then forgiven in five equal, annual installments.

Bonus Funding
If you choose to offer a mixed-income property, The Road Home will add a 15 percent bonus amount to the award you might otherwise receive. In addition, nonprofit organizations are eligible to receive a 15 percent bonus award on each unit designated for special needs or permanent supportive housing occupants. Applications from owner occupants are also eligible for a 15 percent bonus amount on each affordable unit.

Awards and Rents for Affordable Units
Awards and rents have been divided into three tables, reflecting the different housing markets in the southern parishes eligible for the Rental program. Refer to the Award Levels (PDF/1MB) under the Resources and Downloads page to see award and loan forgiveness tables.

The three areas are the New Orleans metropolitan statistical area (MSA), the Lake Charles MSA, and one for all other parishes. 

  • The New Orleans MSA includes Orleans, Jefferson, Plaquemines, St. Bernard, and St. Tammany Parishes. 
  • The Lake Charles MSA includes Calcasieu and Cameron Parishes.
  • All other parishes include Acadia, Iberia, Tangipahoa, Terrebonne, Vermilion and Washington Parishes.

Award tables indicate the maximum amount of rent you may charge on each affordable unit. Restricted rents in the Rental program will be adjusted upward annually with the publication of new AMI tables by the Federal government. The amount of rent charged to the tenant cannot exceed the amount established by the Rental program for that rent tier. Rents charged to the tenant may be calculated in one of two ways:

  • If the property owner pays all the utilities for the rental unit, the property owner may charge the tenant the gross rent listed on the chart or as published annually by the State of Louisiana Office of Community Development.

If the tenant is required to pay utilities for the unit, the property owner must deduct a utility allowance from the gross rent listed on the tables included in the Award Levels found under the Resources and Downloads page . Acceptable utility allowances include Section 8 utility allowances published by local or state Housing Authorities or amounts certified by utility companies providing service to the unit. Property owners may also use the Guide to Utility Allowance (PDF/262k) developed by the Rental program found under the Resources and Downloads page.

Participating Lenders
The Small Rental Property program provides incentives to property owners only after the rental property is built to the building code and an income-eligible tenant is in place.

A group of lenders are participating in the Small Rental Property program to provide both construction and permanent financing to applicants receiving a Conditional Award and progressing to the Commitment Letter stage (see Funding Process below). The lenders are experienced in providing construction and permanent lending services and have expressed interest in assisting Small Rental Property program award recipients to complete their repairs.

  • A construction loan is a short-term loan specifically designed to pay for construction or substantial repair of buildings or homes. These loans usually provide periodic disbursements to the property owner as the building progresses.

While the Participating Lenders are interested in working with you to restore your rental property, they will adhere to their normal lending standards when reviewing loan applications. The lender alone decides whether to retain, service, or sell each permanent loan, without participation by The Road Home program.

Below is a list of the lending institutions that are currently identified. If your preferred lender is not yet participating, you should contact them right away to let them know you are interested in having them work with The Road Home.

Metairie Bank and Trust Company
3344 Metairie Road
Metairie, LA 70004
(504) 832-5667
www.metairiebank.comexits Road Home web site		 Capital One N.A.
1501 Veterans Memorial Boulevard
Metairie, LA 70005
(504) 533-2163
www.capitalonebank.comexits Road Home web site
First NBC Bank
210 Baronne Street
New Orleans, LA 70112
5359 Mounes Avenue, Suite E
Harahan, LA 70123
(504) 566-8000 – Main telephone number
(504) 671-3398 – Construction loan
program
www.firstnbcbank.comexits Road Home web site		 Chase Bank
3501 North Causeway Blvd, Floor 7
Metairie, LA  70002
1-866-213-0264
www.chase.comexits Road Home web site
Liberty Bank and Trust Company
6600 Plaza Drive, 6th Floor
New Orleans, LA 70127
(504) 240-5133
www.libertybank.netexits Road Home web site		 Whitney National Bank
1324 Carrollton Avenue
New Orleans, LA 70118
(504) 581- 5854
www.whitneybank.comexits Road Home web site
Mortgage Market, Inc.
3850 N. Causeway Boulevard, Suite 725
Two Lakeway Center
Metairie, LA 70002
(504) 836-7050
(800) 738-7389
www.mortgagemarket-online.comexits Road Home web site		 Coastal Commerce Bank
1300 West Tunnel Boulevard
Houma, LA 70361
(877) 580-2265
www.coastalcommerce.comexits Road Home web site
Hancock Bank
500 Veterans Boulevard
Metairie, LA 70005
(504) 832-2969
www.hancockbank.comexits Road Home web site		 Central Progressive Bank
29092 Krentel Road
Lacombe, LA 70445-3304
(985) 819-1242
www.cpb.comexits Road Home web site
Regions Bank
400 Poydras Street, Suite 2200
New Orleans, LA 70130
(504) 585-4569
www.regions.com exits Road Home web site		 IberiaBank
3421 Causeway Boulevard, Suite 404
Metairie, LA 70002
504-310-7406
www.iberiabank.comexits Road Home web site
Wells Fargo Home Mortgage
2439 Manhattan Boulevard, Suite 209
Harvey, LA 70058
504-365-3794 – Direct
1.866.221.5088 – Toll Free www.wellsfargo.comexits Road Home web site		  

 

Funding Process
Prior to the start of each competitive round, the Small Rental Property program announces the eligibility requirements and round preferences that determine the scoring criteria for the competition for the funds. Property owners should read the materials for each round in their entirety (see Funding Process (PDF/1MB) under the Resources and Downloads page) to determine if they are eligible to apply and if their property appears to meet some level of the scoring criteria. Download a diagram of the Loan Procedure Process (PDF/1.3MB)

A typical process for applying to a competitive round of the Rental program is as follows:

  • Property owners complete and submit an application to the Rental program (preferably online). Property owners are encouraged to work with or consult a trusted financial advisor such as a local lending institution, nonprofit organization, or some other individual or corporation. At the end of the application, the owner must certify that all information provided in the application is accurate and correct under penalty of perjury.
  • The Road Home receives applications and verifies the following eligibility criteria for applications which are complete and submitted on time:
    • Damage estimate exceeds $5,200
    • Property owner is identified as the current owner
    • Property owner was the owner at the date of the storms or is a new investor
    • Property is one to four units on a tax parcel
    • Property is located in an eligible parish
    • For owner occupants, a property owner resided in the property as their primary residence at the date of the storms and will live there after repairs
  • An automated system scores and ranks the verified applications based on the priority scoring criteria established for the round. These criteria may change for each round and are published in the application handbook and on this Web site.  

  • Based on the amount of incentive available in each round and the amount requested by applicants in each round, a notification of the results is sent to each property owner. There are seven types of notices in Round 2:
  1. Owner-occupied Conditional Award – informs an owner-occupied applicant of 3- to 4-unit buildings that they have qualified in Round 2 to receive a Compensation Grant for their owner-occupied unit.

  2. Conditional Award – informs an applicant that they are conditionally approved for Round 2 funds for a specified property if they agree to the terms of the program.

  3. Notice of Deferral – informs an applicant that they were not selected for Round 2 for a specified reason but that they may be eligible for future rounds.

  4. Notice of Denial – informs an applicant that they do not meet specified eligibility requirement(s) to receive funding in Round 2.

  5. Incomplete Application – informs an applicant that there were several required entries on their Round 2 application which were blank, illegible, contradictory, or otherwise unable to be processed, and gives them the opportunity to resubmit a completed application within 30 days. The application is then scored and ranked and the applicant is notified in writing whether their completed application scores high enough to receive a Conditional Award for Round 2.

  6. Late Application Notice – informs an applicant that they missed the July 31st Round 2 deadline and were not considered for Round 2 funding.

  7. Notice of Waitlist Status – informs an applicant that their application was not selected for funding because it did not score high enough against all other applications received in the round and has been placed on a waiting list to receive funding in Round 2. Should funds become available in Round 2, the Rental program grants awards to the next scoring level and notifies an applicant receiving funding via mail.
  • Based on the amount of incentive available in each round and the amount requested by applicants in each round, a notification of the results is sent to each property owner. There are five types of notices:

    1. Notice of Conditional Award. All properties above threshold with sufficient scoring receive a notice of conditional award.  The letter will clearly explain that the fund reservation is the amount of incentive the property owner is eligible to receive and does not guarantee an actual award amount or entitlement. The letter will also explain the next steps required by the property owner and those conducted by The Road Home, including any additional documentation that is required.

    2. Notice of Denial. Applicants that do not meet the basic threshold eligibility criteria to apply for the Rental program will be mailed a notice of denial.  The property owner may appeal the decision.

    3. Notice of Deferral. All properties below threshold receive a notice of deferral. This letter will indicate that although eligible for the Rental program, the application did not score well enough to meet threshold.  This letter will encourage them to reapply in a later round.

    4. Late Application. Applications that are received after the deadline are not considered for the funding round.  This letter will encourage them to reapply.

    5. Incomplete Application. Applicants who did not complete their application are not considered for the funding round. This letter will encourage them to reapply.

  • The property owner will accept the Notice of Conditional Award, by returning a signed conditional award agreement to The Road Home.

  • After the applicant returns all required documents, The Road Home will issue a commitment letter obligating the amount of funds to be disbursed to the property owner. 

  • All construction that is necessary to comply with the building code must be completed before any award funds will be disbursed.  The Road Home commitment letter will aid the property owner in securing any lender financing that may be needed to make repairs. The property owner is responsible for securing construction financing (if necessary) and overseeing the completion of any outstanding repair work.  The rental units must be in compliance with the building code within 9 months of the return of the signed loan commitment documents. If an extension is required, the property owner must contact the Rental program detailing the progress of the construction and an estimated date of completion.
  • The property owner will notify the Rental program when construction is complete on the rental property. The property owner must receive a Certificate of Occupancy or equivalent from the Parish to demonstrate that State and local building codes have been met and submit it to the Program. The Rental program will then conduct a final evaluation to ensure that the units meet all the requirements of the Program.
  • The property owner seeks and identifies income eligible tenants to rent the affordable units. The Road Home is partnering with the Louisiana Department of Health and Hospitals (DHH) to help identify affordable rental properties in Louisiana, including units that are accessible for people with disabilities. Property owners will be required to list their completed rental properties at www.LAHousingSearch.orgexits Road Home web site which enables prospective tenants and displaced residents nationwide to view available affordable units.

  • The property owner collects the information needed to document that the prospective tenant’s annual household income matches the rent requirements of the rental unit and submits that material to the Rental program. Download the Guide to Tenant Selection and Requirements and 2007 Area Median Income (AMI) Limits from this website’s Resources and Downloads page, located under the heading “Choosing Your Tenants Materials,” for instructions and forms.

  • Once the final Program inspection, tenant income, and lease showing rent amount are received, a Loan Committee composed of State officials will verify the loan package for final disbursement.
  • Closing is scheduled by the title company and is held to execute all the closing documents required by The Road Home establishing the compliance requirements for up to ten years.

  • After closing and verifying all required repairs and completed documents, the Small Rental Property program will electronically transfer the full award amount to a bank account designated by the owner and registered in the owner’s name.