Main Street Iowa/Iowa Finance Authority Loan Program

A partnership between Main Street Iowa (MSI), the Iowa Finance Authority (IFA) and the Federal Home Loan Bank of Des Moines, this program provides funds for lending to Main Street communities in Iowa. IFA, as an associate member of the Federal Home Loan Bank of Des Moines, can borrow from the Federal Home Loan Bank at favorable rates and loan that money to aid community development projects. MSI has identified a need for mortgage lending for multifamily housing and commercial development in Main Street communities. Specifically, there is a need for infill and rehabilitation of upper floor housing in mixed-use buildings in historic commercial districts and downtowns.

Eligibility

Loans are made for the rehabilitation of upper floor hosing or commercial properties or for new construction on infill lots in historic commercial districts and downtowns of communities that are participants in the MSI program.

Projects must compliment MSI’s vision of a revitalized historic commercial district. MSI first considers all applications for design appropriateness. If approved, IFA then reviews the applications for underwriting purposes. IFA awards loans on an ongoing basis.

Loan Amounts

There is a limited pool of money available for this program. The maximum loan is $250,000 per commercial project. The minimum loan amount is $50,000.

Interest Rates and Terms

Loans for this program may have terms between 3 and 15 years, with up to a 30-year amortization. The interest rate is fixed at 1.35 percent above IFA’s cost of funds for he proposed loan term.

Debt Coverage Ratio

1.25 : 1, inclusive

Loan Criteria

The borrower must show community support evidenced by local contributing effort. The borrower must also invest a minimum on 10 percent of the project cost and must supply requested financial information to show that there is a reasonable assurance that the loan will be repaid.

Rehabilitation/Construction Standards

MSI must review all building plans and specifications. Plans must meet all code requirements.

Origination Fee

The origination fee is 1 percent at closing.

The terms and conditions detailed above are a broad outline of the MSI/IFA Loan Program and are not all-inclusive. IFA, with guidance from Main Street Iowa, will determine the eligible projects, credit worthiness, collateral and repayment terms. Terms and conditions are subject to change.

More Information

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