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Pawlowski Unveils De-Conversion Program

04/20/2017
Pawlowski Unveils De-Conversion Program

The City of Allentown is offering qualifying landlords low interest loans to reduce the number of apartment units in their buildings.

Under the city’s De-Conversion Incentive Program announced at a morning news conference today by Mayor Ed Pawlowski, the purpose of the program is to identify owners of from 2-8 unit rental properties and incentivize them to de-convert former single-family homes that have been converted to multiple residential unit uses. The eligible program area is bounded by the Lehigh River on the east, 15th Street on the west, the City limits on the north and Martin Luther King Jr. Dr. on the south.

Pawlowski said, “The intended impact of this program is to reduce overcrowded buildings in the program area. It is also beneficial to the city by lowering the density in these areas and thereby reducing the burden on city services.”

Eligible properties can be no more than eight rental units and no less than two rental units. The owner must reside in one of the units. The property must be registered and licensed with the city Rental Department and have no outstanding violations. Any unit targeted for de-conversion must be vacant at time of application. Displacement of tenants for the purpose of qualifying for this program is forbidden. The property must remain in compliance with all codes and ordinances throughout the loan period.

De-conversion work scope will include, but not be limited to, the removal of additional kitchens, additional utilities, dividing walls, and additional exit/entry ways.

Loans will be awarded in the maximum sum of $10,000 per unit removed. The city has $120,000 available for the program from funds generated from the repayment of past loan programs.

Applicants at or below 80% of the current median income guidelines for family size will receive a Five Year Self-Forgiving Loan. Applicants over 80% of the current median income guidelines for family size will receive a Monthly Payment Loan at 3% interest for an up to 10 year loan term.

If the property is sold, transferred, or converted back to the original unit before the loan term is up, the full loan amount is needed to be paid back at once.

Owner receiving a de-conversion loan must be current on their mortgage and all city, county and school district taxes and fees.

The city Financial Specialist will process the loan application. The owner will work with the city Rehabilitation Specialist to submit the required information such as architectural plans of proposed de-conversion work. Once qualification is determined and plans are reviewed and approved by all city bureaus, which may include property walk through, applicant will be contacted and may pull permits to begin work.

Final funds will be dispersed and the loan period will begin upon Certificate of Occupancy (CO) inspection being completed and approved by city building inspection post de-conversion work.

All health and safety violations are the responsibility of property owner and such violations must be corrected prior to funds being awarded.

Applications for the program are available from the Department of Community & Economic Development.

Organizations, Businesses, and/or Non-Profits are not eligible to apply.

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