NEW ULM — The New Ulm Economic Development Authority (EDA) approved a new multifamily rental rehabilitation loan program Tuesday.

The program assists rental property owners with loans for eligible improvements to make rental units livable, for energy efficiency, or to bring the property into compliance with a variety of building codes and health and safety deficiencies. Eligible projects include: plumbing, roofing, electrical, heating, structural and bedroom/bathroom additions.

The minimum loan amount is $10,000 and the maximum amount is $50,000. Loans will be at 2% interest for 10 years. Applicants will be responsible for a credit report fee of $10 per applicant and title search fee of $45.

Applications must include one written bid from a contractor, including materials and labor costs.

Properties must be within City of New Ulm limits. Applicants must be current on mortgage/contract for deed, property tax, liens and other assessments, and owner-paid utility payments. They must provide proof of current homeowner’s insurance.

City Manager Chris Dalton said the purpose of this program is to preserve existing rental units and bring offline rental units back online.

This is a pilot program and will only start with $50,000. Dalton said more could be allocated if more was needed after a year.

Board member Les Schultz was in favor of the program and would love to target the former rental properties above the downtown businesses, because surveys indicate younger residents want to live downtown.

Dalton said there are many downtown units that are not on the market and would need rehabilitation. He said the initial idea for this loan program was to help rehabilitate downtown businesses. The program was expanded to cover all of New Ulm because there is a need to update rental properties across the city.

The loan program was unanimously approved by the board.