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Homeownership Rehabilitation Program (HRP)
The Homeownership Rehabilitation Program (HRP) provides developers a subsidy for the rehabilitation of vacant houses to be sold to homebuyers. The subsidy is determined based on the total development cost less the market value of the property as determined by an after-rehab appraisal. Marketing and homebuyer selection are the responsibility of the developer.
Funding Available
Upon approval of the project the developer will receive a commitment for the subsidy amount; however, the subsidy is paid upon completion and sale of each property. As a result, the developer must obtain a loan for the acquisition and construction of the property. The subsidy is used along with the proceeds of sale to repay the loan. The maximum subsidy is $35,000 per property but can be averaged across properties in the same zip code or in close proximity. An additional subsidy of up to $15,000 can be provided on a dollar for dollar matching basis on projects that have other subsidies or developer fee contributions. A developer fee equal to 20% of the rehabilitation cost with a maximum fee of $15,000 can be included in the development budget. The subsidy will be provided to homebuyers in the form of a secured Soft Second Mortgage. The term of the mortgage will be 10 years at a 0% interest rate. This mortgage does not have to be repaid as long as the homebuyer lives in the property for 10 years. The mortgage is forgiven 10% each year the homebuyer lives in the property.
Eligibility Criteria
Developer and Contractor
- Non-profit or for-profit entity. Developers must attend an HRP briefing session or a pre-development meeting.
- Current with all taxes and fees due to the City of Philadelphia.
- Properly insured and have the capacity to complete the project.
- Contractor must be properly licensed by the City of Philadelphia.
Homebuyer
- Property must be principle residence.
- Homebuyers must have income less than 80% of the median income adjusted for family size and be considered first-time homebuyers.
- Required to participate in a pre-purchase housing counseling program sponsored by the Office of Housing and Community Development.
Property
- Must be a vacant property in the City of Philadelphia. (Tenant conversions are not eligible.)
- Property can not be adjacent to another vacant property, unless there is a current development application in place for that additional vacant property. This also includes vacant lots.
- Property located on a block where the vacancy rate is 10% or less, or where a vacancy rate of 10% or less will be achieved by the development project.
- Properties must require rehabilitation. Properties that can be occupied in their current condition may not be eligible for HRP. Properties must have an increase in value after rehabilitation.
- The property must have a Historic/Environmental review performed by the City Planning Commission.
- If the acquisition price of the property is greater than $15,000, the value of the property must be supported by an as-is appraisal.
Rehabilitation
- Rehabilitation plan must be in accordance with the Lead Hazard Reduction Standards of the federal government and the Energy Conservation Standards of PHDC and the State of Pennsylvania.
- Rehabilitation methods and materials must be equivalent or better than that listed in the “City of Philadelphia Specifications for Construction and Rehabilitation of Single-Family Houses” dated 3/2000.
- Rehabilitation plans must be approved by PHDC prior to the start of construction.
- Construction will be inspected on an ongoing basis by PHDC.
- For projects estimated to cost more than $70,000, or are considered “gut rehabs,” sealed drawings and a trade cost breakdown must be used. For projects that are considered “moderate rehab” a detailed itemization of the work can be used.
- Projects must meet the minority participation guidelines of the City of Philadelphia.
Application Process
Please click on one of the packages below to download the necessary folder and SAVE it to your computer (the folders are large and may take a while to download). Then start by reading the following file 00 READ ME.doc which will help you understand the file structure.
Documents:
- Application Package: forms necessary to make an application (Click Here)
- Buyer Package: Forms Necessary to Submit a Buyer Application (Click Here)
- Complete Package: Entire Set of Forms Used in HRP (Click Here)
Interested in making an application or need more information?
Contact Rich Franck at 215-448-3072 or send an email to richard.franck@phila.gov (email is preferred).
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