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Thus far, the city of Columbus is working with eight banks and 30 contractors to renovate neighborhood housing.
Spec remodeling loses some risk with government assistance. In Columbus, Ohio, the city is giving money to remodelers who rehabilitate single-family homes within five neighborhood investment districts — neglected areas in need of a housing boost.
Developers apply to the city and a lender for funds. The city matches the bank loan with grant money — 50 cents on the dollar, up to $20,000 — and gives the developer nine months to complete the renovation. Once the home is sold, the city forgives the loan.
Charles Gunnell, business development specialist with the city of Columbus, says the program gives remodelers a platform for testing and incorporating new design applications and techniques into projects with less risk.
"We encourage our rehabbers to take the property to the top of the market," Gunnell says. "Your profit margin is protected, and the savings are passed on to the buyers, which gives them more incentive to buy."