South of Downtown Residential Rental Rehabilitation Program

• Properties must be located in the project area bordered by South 10th, South 17th, A and J streets.
• Properties must be a permanent structure available for rent on a year-round basis.
• Mixed-use properties (commercial and residential) are eligible if the commercial use is compatible with the residential use. Assistance is provided for rehabilitation of the residential portions only.
• Units must be able to be restored to decent, safe and sanitary condition.

• Maximum rents may not exceed the current year U.S. Department of Housing and Urban Development (HUD) Fair Market Rent (FMR). HUD revises maximums annually. Current maximum rent and utility rates for 2025 are as follows:
  • Efficiency – $815
  • One bedroom –$910
  • Two bedrooms – $1,123
  • Three bedrooms - $1,576
  • Four bedrooms - $1,685
  Updates are available on HUD’s website.
  
  
• The property owner must agree to maintain affordability for a 20 year period and agree to limit rent increases throughout the affordability period consistent with, and not exceeding, HUD’s annual maximum FMRs.
• Applicants must agree to report to the City annually by providing rent roles or ledgers during the affordability period.
• The property owner agrees not to income discriminate based on source of income and agrees to accept Housing Choice Vouchers.
• Property Owners (not their contractors) must provide proof of Commercial General Liability Insurance for the Property and the work to be completed on an occurrence basis with limits not less than $1,000,000 combined single limit per occurrence and not less than $2,000,000 general aggregate. Until the work is completed, the City of Lincoln shall be included as an additional insured on the policy.

• Bringing up to existing housing code standards in older buildings
• Replacement or updating of major systems with emphasis on improving energy efficiency including: roofing, windows, doors, siding, gutters, plumbing, electrical, heating, ventilation, air conditioning, insulation, foundations and exterior masonry
• Other energy efficiency improvements
• Lead-based paint remediation through the City’s Lead Hazard Control Grant Program (Additional requirements apply)
• Environmental hazards, including radon remediation, asbestos abatement, and mold
• Removal of architectural barriers to provide accessibility for persons with disabilities

In projects proposing the rehabilitation of mixed-use properties, only the costs of improvements to the rental residential portions are eligible. Improvements to common areas and systems are eligible on a pro-rata basis proportionate to the rental residential uses.

• Luxury items
• Cosmetic upgrades

• Financial assistance is provided in the form of a grant subject to prorated claw back if terms of the grant agreement are violated during the affordability period.
• A lien will be recorded on the property until the affordability period has been completed.
• Funds will be provided as a reimbursement for eligible costs. All construction work is inspected by NeighborWorks Lincoln staff prior to payment being approved. Payment will be made directly to the owner.

In previous years, the city opened a pre-application period for 30 days at the start of the year. In 2025 we will also have a similar 30 day period where online applications are accepted followed by selection of rental units for funding. However, the application page will remain open year round, until funding is expended, accepting applications to add to the funding list for the following years selection. To submit an application, please fill out the link below. The 2025 application deadline is February 28th, 2025. Applications submitted following this date will be reviewed in January 2026 for the next funding cycle.

Apply

1. Urban Development Department staff review applications for preliminary approval based on completeness of the application and confirmation that units are located within the target area.
2. A City-led team comprised of staff from the City, NeighborWorks Lincoln, and partner agencies including Lincoln Electric System (LES), score applications based on the following criteria:
   • Existing or potential partnership with other housing programs
   • The rehabilitation/creation of accessible buildings and/or units
   • Age of the building
   • Current rent
   Projects are selected based on the number of points received, funding availability, and totality of the application.
3. Property owners are notified and informed if they have, or have not, been selected.
4. Additional funding sources may be identified based on the type of work, e.g., electrical, gas.
5. The property owner bids the project(s).
6. The grant agreement is finalized between the City and property owner detailing program requirements. A Land Use Restriction Agreement is recorded against the property for the affordability period.

• The property owner is responsible for coordinating all construction activities with the contractor with assistance as needed by NeighborWorks Lincoln.
• Invoices are reviewed by the NeighborWorks Lincoln Inspector, approved, and submitted to the Urban Development Department for payment within 30 days.

The primary source of funds for the SoDo Rental Rehab Program is Community Improvement Financing (commonly referred to as Tax Increment Financing or TIF) generated from growth in valuations and the private developments within the project area. The South of Downtown Area was designated a TIF District in August 2021 for 20 years. Short-term debt is expected to be issued to obligate future funds in phases. The City may issue Community Improvement Financing bonds or notes to fund the project. The City will divide the taxes for the project area and will estimate the availability of funds over a three- to four-year period.

The first round of applicants were selected in January 2023, resulting in the rehab of 105 housing units ranging in size from a single family home to a 40 unit apartment building. Round two applicants were selected in June 2024 and the rehab of 118 units is underway. Urban Development’s goal is to continue the program in the South of Downtown area for 10 years and hopes to expand into additional neighborhoods in the future.

The City of Lincoln completed the Affordable Housing Coordinated Action Plan(PDF, 14MB), adopted by the City Council in December 2020. The Action Plan identifies the need for improving existing affordable housing. During the same time, the City and the South of Downtown Community Development Organization completed the South of Downtown Redevelopment and Strategic Plan, adopted by the Lincoln City Council in February 2021. That Plan identified improving the quality of existing affordable housing as its highest priority and identified a project to establish a rental rehab program. The Plan states that improvements and enhancements that support private rehabilitation of existing housing will be identified by Urban Development staff and program guidelines will be established.

Nebraska State Statutes require that an area be designated as Blighted and Substandard prior to the completion of a Redevelopment Plan. the Lincoln City Council designated the South of Downtown Area Extremely Blighted in January 2020. The TIF period can be extended from 15 to 20 years in an Extremely Blighted area.