FAIRMONT — Since 2001, more than 140 commercial and residential units in Fairmont have been rehabilitated at a greatly reduced cost and even no cost to owners.

By utilizing five grants from the Minnesota Small Cities Development Program, these properties realized more than $3.2 million in structural improvements.

And Fairmont is poised to apply for another SCDP grant to continue its commercial and residential rehab program.

“We are putting in a pre-application now,” said Linsey Preuss, Fairmont economic development coordinator, who is spearheading the program. “The state will review it. If the pre-application looks good, the state will invite the city to submit a full application, but we won’t know if we got it until late 2020.”

The purpose of the pre-application is to make the state aware of the interest and need for grant funds in Fairmont. If received, this particular grant will be available on a first-come, first-served basis to properties between State Street and Downtown Plaza, and Blue Earth Avenue to the railroad tracks.

Letters about the potential grant sent to property owners in the designated area did not generate enough interest, so Preuss; Peter Bode, the city’s planner and code enforcement technician; and Ned Koppen, president of the Fairmont Area Chamber of Commerce went door to door to offer a personal explanation about the grant’s benefits. Preuss also went door to door to talk to commercial property owners.

The individualized presentations had a positive impact and sparked interest in the program.

“They just needed somebody to explain it to them,” Preuss said.

Grant money, administered by Minnesota Valley Action Council, can be used for necessary exterior structural improvements such as roofing, gutters, windows, doors, siding, safety issues and accessibility improvements. Interior work would cover electrical, plumbing and other code violation upgrades, heating system improvements and any interior safety issues.

“For a commercial for-profit business, you can get a zero percent interest 10-year deferred loan, so if you own the building for 10 years after you use the money, the loan is forgiven,” Preuss said.

Commercial loans would have a $40,000 cap, and the owner of the building is required to invest 20 percent.

“So if you got $40,000, you would have to put in $10,000, and you’d get a $50,000 project. That’s a pretty good deal,” Preuss said.

She noted that the cost of commercial projects will be impacted by prevailing wage, usually the union wage for workers completing government contracts.

“We want to make sure the commercial property owners are aware of this, but if they can structure their project right, it will still be a benefit. Prevailing wage usually adds about 25 percent to the cost, but they would still be getting an 80 percent grant,” she said.

For residential, single-family, owner-occupied homes, the cap is set at $25,000, and eligibility is income based. Households with financial ability will be asked to pay up to 30 percent of the project cost.

“As an example of the income guidelines, a household of four people with a gross annual household income of $57,900 or less would be eligible,” Preuss said.

Completing all the grant projects can take a few years. The city recently closed out a half-million dollar 2016 grant that affected 15 residential units.

“The projects can take longer because we require a contractor with a lead license, and those are difficult to find because they already are busy,” Preuss said.

To encourage more contractors to obtain a lead license, the Fairmont Economic Development Authority recently approved a program that will pay for a contractor’s educational program and fees to obtain a lead license.

Property owners in the designated grant area can be placed on a funding waiting list by filling out the application form at City Hall.

For more information about the grant, contact Preuss at (507) 238-3925.