Upper Story Housing Conversion Program

The Upper Story Housing Conversion Program is administered by the Iowa Economic Development Authority as part of the broader Housing Rehabilitation Fund supported through the federal Community Development Block Grant program. This initiative is designed to address housing shortages and improve the condition of existing structures by converting underutilized upper-story spaces in downtown buildings into residential rental units. By focusing on rehabilitation rather than new construction, the program promotes efficient use of existing infrastructure while contributing to long-term community revitalization and economic stability. The program specifically supports the conversion of vacant and unoccupiable upper-story spaces into new housing units. Eligible projects must involve buildings located in established downtown areas, and all units must be vacant and unsuitable for occupancy at the time of application. The funding structure allows for up to four units per project, with a maximum award of one hundred thousand dollars per unit, not to exceed four hundred thousand dollars total, inclusive of administrative costs. A minimum ten percent match is required from non-CDBG sources, ensuring local investment and shared financial responsibility. A central requirement of the program is alignment with the CDBG national objective of benefiting low- and moderate-income households. At least fifty-one percent of the units in each funded project must be occupied by households earning at or below eighty percent of the area median income, as defined by the U.S. Department of Housing and Urban Development. Rent levels for these units must comply with HOME program limits, and affordability must be maintained for a minimum period of five years following project completion. Applications are submitted through a municipality in partnership with a qualified grant administrator and are evaluated on a competitive basis. Applicants must provide comprehensive documentation, including evidence of site control, development team structure, financial commitments, and compliance with federal procurement standards. Additional requirements may include market studies, environmental reviews, and adherence to federal regulations such as Davis-Bacon labor standards, lead-based paint rules, and broadband infrastructure provisions where applicable. The application process for the 2026 funding cycle opens on May 26, 2026, and closes on August 17, 2026 at 11:59 PM. Applications must be submitted through the official state grants portal, and all required materials must be complete at submission to be considered. Projects selected for funding will enter into a three-year contract period during which construction must be completed and units leased, followed by a five-year affordability compliance period tied to the forgivable loan structure. Financial assistance is provided as a five-year forgivable loan that is fully forgiven upon successful completion of compliance requirements. If the property is sold or converted to another use during this period, repayment may be required unless the new owner agrees to maintain all program conditions. This structure incentivizes long-term affordability and responsible property management while protecting the public investment. Overall, the program advances community development goals by increasing housing availability, improving building conditions, and revitalizing downtown areas. By leveraging existing structures and targeting low- and moderate-income households, it supports sustainable growth and aligns with broader federal housing and economic development objectives.

Ensure all documentation is complete at submission as incomplete applications are not reviewed; demonstrate strong low and moderate income benefit alignment; secure all financial commitments prior to submission