Small Cities grant hopes are on rise

By Seth Schmidt

Tracy has moved one step closer to obtaining a new Small Cities housing rehabilitation grant. Recently, the Tracy Economic Development Authority was notified that a $577,000 grant application has advanced to a second round.

“We made it through the first round,” EDA Coordinator Jeff Carpenter told the EDA board last week. He added that he has been told informally that Tracy now has about “an 80% chance” of getting final state approval.

The United Community Action Partnership is coordinating the Tracy application.  If the Minnesota Department of Economic Development grants final approval, Carpenter said, individual applications in Tracy could begin late this year.

The Small Cities program is designed to help low and moderate-income households improve and repair owner-occupied dwellings.  

A $577,000 grant award would have $73,000 in administration expenses from United Community Action, leaving $504,000 to fund about 21 Tracy home improvement projects at $24,000 each.

In addition to meeting income guidelines, homeowners will likely need to live in a specified target area of about 20 blocks.  Carpenter says this target area will likely be located on the west side of Tracy.

Qualified improvements in the Small Cities program include: roofing, siding, windows, heating, plumbing, electrical, insulation, and accessibility.

The Tracy City Council will host a public hearing on the Small Cities grant application on Feb. 11. 

The proposed Small Cities housing program would be Tracy’s sixth since the 1990s.


Two levels of eligibility are likely for a Tracy Small Cities housing repair program: 1) Tier One-Less than 50% of area household median income.  2) Tier Two-50-80% of area household income

The median household income for the Tracy Area in 2018, for a family of four, was  $75,000.  For a single-person household it was $52,500.

Households with Tier One incomes would qualify for 0% deferred loans for 100% of housing rehabilitation costs.  Loans would carry no interest, and would be forgiven for 10% of principal amounts annually over a 10-year period.  Thus, someone who lives in an improved house for five years before selling it and moving, would qualify for 50% forgiveness of the loan.  A person who lived in the dwelling for 10 years would have the entire loan principal written off.

Tier Two participants would be eligible to receive forgivable loans covering  80% of housing repairs.  The 80% portion would again be forgivable over a 10-year period.   A match from the homeowner would be required for 10% of project costs, with the remaining 10% coming from a five-year, 2% loan.

The EDA and United Community Action mailed a survey to over 800 Tracy households in September, to gauge interest in local housing grant program and numbers of income-eligible households.  The target area for a new program was to be based on survey data.