Housing Financial Incentives & Assistance

In Monticello, we believe that a strong community starts with a place to call home. We are committed to offering a diverse range of housing options that meet the needs of residents of all ages, incomes, and backgrounds.

To help make housing more accessible and affordable, the City's Economic Development Authority (EDA) also serves as the Housing and Redevelopment Authority (HRA). Economic Development staff are available to connect potential residential developers and rehabilitators to the resources that support housing development in our community.

Local Incentives and Assistance

Tax Increment Financing (TIF)

The City of Monticello Economic Development Authority (EDA) offers Tax Increment Financing (TIF) assistance to development projects for the purpose of creating new housing units and eliminating blighted and substandard structures.

Affordability is a key criteria for a significant portion of owner-occupied units and typically 20 to 40% of rental units are required to meet affordability requirements. The assistance requires proof that the development would not otherwise occur without TIF. It can be used for land write downs and/or site improvements as mutually agreed upon by the EDA and the developer.

State Incentives and Assistance

Minnesota Small Cities Development Program (SCDP)

The Minnesota Small Cities Development Program (SCDP) is a State of Minnesota Department of Employment and Economic Development (MN-DEED) financing program for the rehabilitation of existing residential property with a goal of eliminating slum and blight conditions or benefiting low and moderate income individuals.

Grants are competitive and are submitted on an annual cycle. Eligible activities include property acquisition, installation of streets and utilities, site prep, new construction and rehabilitation of existing units for owner occupied and/or rental units. Funds are awarded to local units of government who in turn provide them to qualified individual applicants and/or developers through low-interest loans, forgivable loans, or grants as gap funding to complete the specific project or scope of work. 

Interest rates are typically negotiated with terms matching the useful life of the asset being financed. Loans require appropriate collateral and/or personal guarantees. The maximum grant award to a municipality for single purpose project is $500,000 with comprehensive projects topping out at $750,000. 

For more information, visit MN-DEED's Small Cities Development Program.

Impact Fund Program

Impact Fund dollars can be used to help create new and reinvest in existing affordable owner-occupied housing. Eligible activities include: land acquisition, new construction, demolition or removal of existing structures with rebuild, owner-occupied rehabilitation, and the acquisition and rehabilitation of existing housing.

Household income cannot exceed 115% of the greater of the state or area median income.  Eligible applicants include cities, for-profit and non-profit corporations, and Housing & Redevelopment Authorities (HRAs).

To learn more about the program, visit the State of Minnesota Housing Department Impact Fund.

Regional Incentives and Assistance

Midwest Minnesota Community Development Corporation (MMCDC)

The MMCDC offers loans ranging from $5,000 to $20,000,000 for community needs and solutions, including the development of apartment buildings, homes with affordable payments and new subdivisions. 

For more information, visit the Midwest Minnesota Community Development Corporation.

Federal Incentives and Assistance

Multi-Family Housing Loan Guarantee Program

The U.S. Department of Agriculture (USDA) Rural Development's Multi-Family Housing Loan Guarantee Program works with qualified private sector lenders to provide financing to qualified borrowers to increase the supply of affordable rental housing for low and moderate income individuals and families in eligible rural areas with a population of less than 35,000.

Activities include new construction, improvement and purchase of multi-family rental housing for low to moderate income families and individuals, buying and improving land and providing necessary infrastructure. Rents must be capped at 30% of 115% of the area median income. USDA will guarantee up to 90% of the loan. Interest rates are typically negotiated between the lender and the borrower and fixed for the life of the loan.

Eligible applicants include for-profit entities, non-profit organizations, and state and local government entities. 

For more information, visit the U.S. Department of Agriculture.