Cape Girardeau officials are poised to embark on a new grant program that will fund renovation of up to 15 rental units in a designated "East Cape Rental Rehabilitation Neighborhood."

If attendance at Thursday's informational meeting on the program is an indication, the city will have no trouble finding enough units to qualify for the program.

About 25 people, mostly landlords in the project area, attended Thursday's meeting at City Hall, where Cape Girardeau's Housing Assistance Coordinator Steve Williams explained the program to the property owners.

Williams said the city's primary goal is to improve neighborhoods by repairing degraded rental units with low to moderate income tenants.

"The rehabilitation improvements will result in safe and sanitary housing for rental occupants, plus a better quality neighborhood environment in the targeted neighborhood," he said.

Williams said applications for the program, through which the Missouri Department of Economic Development will provide a grant for 50 percent of the cost of the repairs, will be handled on a "first come, first served" basis.

Property owners whose tenants meet the income guidelines will be required to match the grant money. Williams said Boatmen's Bank in Cape Girardeau has agreed to participate in the program by offering loans to the landlords for their portion of the renovation costs.

The project area is bounded by Hackberry Street to the south, Bertling to the north and the Mississippi River to the east.

The western border of the project area will align with Minnesota Avenue from Hackberry to William Street, then east to Henderson, where it will run north to New Madrid, east to Big Bend Road and north to Bertling.

To be eligible for the grant, the rental unit tenants' income must not exceed $17,650 for a single person unit; $20,150 for a two-person family; $22,700 for a family of three; and $25,200 for a family of four. The income guidelines increase proportionately for larger families.

Williams said that the city has only enough grant money to renovate 12 to 15 rental units, so priority will be given to "units with two or more bedrooms or those occupied by lower income tenants."

Grants will total up to $5,000 for efficiency apartments; $6,500 for one-bedroom units; $7,500 for two-bedroom units; and $8,500 for rental units of three bedrooms or more. The minimum amount for each grant is $1,000.

Williams said that 80 percent of the funds must benefit lower-income tenants and 70 percent of the funds must be used for repair of substandard units with two or more bedrooms.

East Missouri Action Agency will administer the program for renters who qualify for federal housing assistance.

Charlie Horn, an agency official who will handle the Cape Girardeau project, will verify the income of tenants whose landlords apply for a rehabilitation grant. If the tenants qualify, the city staff then will inspect the property according to a set of minimum property standards, Williams said.

Property owners who attended Thursday's meeting questioned whether they would be required to remain in the program and rent to low income tenants for a specific duration.

"You must stay on the program for a period of 10 years," said Williams.

He said that if the property is sold within five years of renovation, property owners will be required to pay the full grant amount back to the state. If the unit is sold in five to 10 years, the repayment amount will be pro-rated.

Williams said landlords must also market the property for low income tenants for seven years.

"The program is set up to benefit the low to moderate income tenants here in our project area," he said. "The work that's done is expected to last at least 10 years. We're not going to skimp on anything."

Williams also said property owners will be required to maintain the units once they're repaired.

"What we're trying to do is clean up that neighborhood so that if you've got sheds, vacant automobiles, or other debris scattered around the yard, we're going to make you clean that up," he said.

"Ninety percent of the people that drive through that neighborhood, what they're going to see is the outside."

Williams said there is no way the city can assure that tenants won't damage rental property. He encouraged landlords to carefully screen potential renters and strictly manage the units once a tenant if found.

"There's no way we can guarantee that sort of thing for you," he said. "All we can do is assure that you're going to get a nice unit."

He said he expects the rental rehabilitation program to have a residual effect on other homes in the project area.