Small Rental Assistance Program (SRAP)

by Damion on October 29, 2008

The Mississippi Development Authority’s Small Rental Assistance Program (SRAP for short) round 2 is here and applications are being processed. For anyone wanting to take advantage of this program, you need to do it BEFORE December 15th 2008.

SRAP round 2 started on October 15th 2008 and offers some of the nicest incentives to put rental property into the market and create affordable housing. A typical, three bedroom home can receive $36,500 in the form of a forgivable loan provided the guidelines are met with the program for a period of 5 years.

The Small Rental Assistance Program is very unique and round 2 has many of the same guidelines as round 1 of SRAP but there are some minor differences. The forgivable loan amounts are as follows, and come directly from the SRAP Guidelines:

# Units Efficiency 1BR 2BR 3BR 4BR
1 $20,000 $22,500 $25,000 $27,500 $30,000
2 $40,000 $45,000 $50,000 $55,000 $60,000
3 $60,000 $67,500 $75,000 $82,500 $90,000
4 $80,000 $90,000 $100,000 $110,000 $120,000

Then, you can get an additional “completion bonus” if it is in use within 9 months of the approval:

# Units Efficiency 1BR 2BR 3BR 4BR
1 $3,000 $7,000 $8,000 $9,000 $10,000
2 $6,000 $14,000 $16,000 $18,000 $20,000
3 $9,000 $21,000 $24,000 $27,000 $30,000
4 $12,000 $28,000 $32,000 $36,000 $40,000

As you can see, the benefits can quickly add up and that is the nature of the program – to get as many lower rate rentals as possible to attract more people back to the coastal counties most effected by Katrina.

SRAP round 2 does have a few minor changes including the fact that you have to OWN the property. Round 1 allowed you to have them under contract or have options to purchase and be able to apply. Because of significant issues, they have changed this. Directly from the SRAP round 2 guidelines:

MDA is now requiring that an Applicant OWN the property prior to application processing. A lease, contract for purchase, option to purchase, or a reservation will not meet this requirement.
For the purposes of this program, property ownership is defined as “fee ownership”. In other
words, the applicant must be able to provide MDA with a recorded warranty deed, quitclaim
deed or other documented proof of ownership.

In round 1, people were trying to make sure they would get the loan as a means to buy the property and this created a LOT of headaches. What this does mean is that less people will be taking the chance on getting this on new purchases which leaves a better chance for you to be able to take advantage of it!

If you are considering buying investment rental property, give us a call (or email) and we will go over some properties that will KNOCK your SOCKS off.

My partner and I spend a lot of time putting properties together for our investors – come see what all your investor friends have been keeping from you :)

See the Official SRAP page on the MDA website HERE.

{ 3 comments… read them below or add one }

Meaghan Setting January 11, 2011 at 12:39 pm

This is one of the better articles I have posted to lately. I envy your blog layout. Keep up the good work, Thanks!

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Jane March 11, 2012 at 10:03 am

Need many to fix up a rental damaged by katrina. Tried to get money but was always told no money left.Is there any money left? I also want to c/o that somepeople got too much money and never renovated any property which is not fair. (number removed)

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Damion March 11, 2012 at 11:21 am

This program has been over for a while.

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