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Downtown Revolving Loan Fund Program
Program Overview
The Downtown Revolving Loan Fund (DRLF) is designed to assist in reducing the immediate cost of development in Downtown Modesto, and provide a low interest loan of construction costs.
Policy
The DRLF Program offers construction loans at a low interest rate, for twenty percent (20%) of the total project cost up to $90,000, whichever is less. A loan request above $90,000 and capped at $250,000 may be allowed by the Director of Community and Economic Development, in which a public hearing pursuant to Government Code Section 53083 will be held before a loan above $90,000 is approved .
Program Requirements
- Located within the identified Downtown Modesto area
- Loan-to-Value ratio must not exceed one hundred percent (100%) of the property value
- Loan must be twenty percent (20%) of the total project cost or $90,000, whichever is less
- Two-year timeline from application approval to Certificate of Occupancy
- Applicant must disclose any personal liens on the property
About the Construction Loan
- Loan period is no more than five (5) annual payments following one (1) year after the Certificate of Occupancy
- Three percent (3%) interest on loan
- A lien will be placed on property and remain until loan amount with interest is paid in full
- Funding will be provided upfront
- Project must receive a Certificate of Occupancy within two (2) years
Application Process
Prospective applicants should first contact the City of Modesto Economic Development Manager.
Required Documentation
The following items will be required and need to be submitted prior to loan approval and building permit issuance:
- Downtown Revolving Loan Fund Program Application
- Project description
- Proof of ownership
- Demonstrated Lien-to-Value must not exceed 100% of the property value
- Two-year timeline for project completion
- Construction Loan Agreement
- Promissory Note
- Deed of Trust
- Located within the Downtown Modesto boundary area
- Download an application for this program (PDF), submit by emailing Economic Development.
Application Fees
- Administration Fee ($250)
- Title Report Fee ($500)
These fees will be due after your application is approved.
Staff Review
Only completed applications will be accepted, all required documentation needs to be provided at time of application. Once staff has accepted the application, it will require administrative approval, this process typically takes four (4) weeks.
Construction Loan Payment
- Once Certificate of Occupancy is received, Economic Development staff will set up annual billing of the Construction Loan
- Applicants will receive a copy of the approved agreement after it has been recorded with Stanislaus County
- The first payment will be due one (1) year after Certificate of Occupancy
- Each annual billing will include an invoice with amount due and due date
- If an applicant would like to pay off their deferral early, please contact Economic Development and a staff member will provide a written lien payoff quote
- Once the deferral is paid in full, including all interest, Economic Development staff will have the lien removed from the property.