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Shopsteading Loans for Cumberland County, Not Including Carlisle Borough

​The Cumberland County Commercial Revitalization and Shopsteading Loan Program offers businesses or properties with commercial tenants located in or surrounding downtowns low-interest financing for projects designed to improve the business community and prompt foot traffic. The loan program is focused primarily on retailers and restaurant businesses or other traditional downtown enterprises. Financing can be obtained to purchase or improve properties, for equipment, fixtures or furnishings, for site improvements or for working capital.

This program is often used in conjunction with others programs and incentives offered in the county as well as through our valued partners including local, state and federal government agencies and private lending institutions.

No application is accepted without an initial interview with the Redevelopment Authority’s Downtown Coordinator Rebecca Yearick to discuss the merits of the candidate project and its impact on the downtown. Applicants are encouraged to involve the Redevelopment Authority early in their plans to identify a property, purchase or lease and open their business as funding is limited and commitments to worthy projects may be made well before financing is requested or obligated.

Program area - designated downtowns in Cumberland County

Eligibility

  • must be a for-profit business located within a designated downtown
  • must lease, own or propose a first-floor commercial space or business, preferably retail or restaurant
  • be creditworthy and have an eligible, creditworthy, business or project

Job creation requirement - the jobs must be available to persons from low to moderate-income-level households

  • for loans up to $35,000, one full-time or two or more part-time-equivalent jobs must be created within two years of the loan closing date
  • for loans up to $70,000, two full-time or three or more part-time-equivalent jobs must be created within two years of the loan closing date

Loan details and terms - acquisition, new construction, rehabilitation, site improvements, acquisition or rehabilitation of fixtures, furnishings, equipment or major systems, or for working capital when the property is owned by the borrower

  • minimum loan is $5,000
  • maximum loan is 50% of the total eligible project costs or $70,000, whichever is less
  • annual interest rate is 2%
  • loan shall be amortized over 25 years with a balloon payment at 10 years

rehabilitation, site improvements, acquisition or rehabilitation of fixtures, furnishings, equipment or major systems, or for working capital when the borrower does not own the property

  • minimum loan is $5,000
  • maximum loan is $35,000 or 50% of total eligible project costs, whichever is less
  • annual interest rate is 2%
  • loan repayment term is seven years

Loan underwriting and approvals - the Cumberland County Redevelopment Authority administers this program on behalf of Carlisle Borough and will underwrite the loans; Authority staff will review the application and secure all approvals for qualifying loan requests

Fees and closing costs - there is no fee to apply; applicants can expect to pay a minimum of $500 for attorney’s fees and closing costs

Federal funds requirements

Environmental Review

Use of federal funds requires a formal environmental review to be completed in consultation with the Pennsylvania Historical and Museum Commission’s Bureau for Historic Preservation before the Authority can commit loan funds. This process is typically completed within 35 days, however the applicant should be aware that on very rare occasions the project application may require a full 180-day review. The Authority will notify the applicant promptly should a more extensive review be triggered. In order to perform the review, the applicant must:

provide a completed copy of the required two-part form titled Environmental Review Record - Initial Project Survey; complete only Part I of the form and return it to: Patricia Mrkobrad, Cumberland County Redevelopment Authority, 114 N. Hanover St., Carlisle PA, 17013, or by email to pmrkobrad@cchra.com; the Authority will complete Part II and send you a copy notifying you if the project’s environmental review response is complete of if additional review is needed

provide as much detailed information as possible regarding the work to be performed including a scope of work, any specifications, drawings and, or, photographs when submitting the initial project survey; a more thorough submission minimizes the possibility of additional reviews and requests for information which can delay the project

any applicant taking action or making commitments prior to completion of the review does so at their own risk

Davis-Bacon wage rates and labor compliance

Any project contract over $2,000 is subject to the federal Davis-Bacon Act requiring prevailing wage rates be paid. If you are using program funds for work requiring a contractor, contact the Authority’s Buck Bigler (717-245-0516 or bbigler@cchra.com) to obtain the current, applicable, wage rates for your project. Wage rates are updated each year. To assure any quotes you receive for project labor reflect wage rates, include the wage determinations in any bid documents.

Job creation requirement

Use of CDBG program funds requires job creation. For loans up to $35,000, one full-time or two or more part-time-equivalent jobs must be created within two years of the loan closing date; for loans up to $70,000, two full-time or part-time-equivalent jobs must be created within two years of the loan closing. The jobs must be made available to persons from low to moderate-income-level households. After CDBG funds are committed, you will receive a packet of information from the Authority’s Joyce Gutshall (717-249-0789 ext. 149 or jgutshall@cchra.com) explaining the job creation reporting requirements and income verification process.

Duns number

Prior to the commitment of CDBG funds, the applicant must obtain a DUNS number—a requirement for any business receiving federal assistance. If your business does not have one, you must go online at www.dnb.com/us (Dun & Bradstreet) and submit your request for a number. The process is free and takes about 20 minutes to complete. After obtaining the DUNS number, report it to Joyce Gutshall as soon as possible.

Guidelines

Downtown program area

The areas eligible for financing through the program include our downtowns. The Authority, working with the communities, shall determine the areas designated as downtowns. Generally speaking, the downtowns are described as town centers of a commercial nature that have existed since at least 1960 and are populated by largely locally-owned businesses or establishments as opposed to, for example, a preponderance of national chain or franchise businesses. A downtown has at least five commercial structures located within a 250-foot radius, and public sidewalks necessary to promote added foot traffic as well as assure pedestrian safety.

Eligibility

To be eligible, applicants must meet the following criteria. An applicant must: • lease, own or propose first-floor retail, commercial or professional office uses note: preference is given to retail and restaurant businesses and, or, properties that include or are designed to include retail or restaurant businesses as part of the project being financed; properties may also include other uses • >be a for-profit entity; with the exception of the Authority or as otherwise approved or recommended by the Authority, government entities and private, non-profit, corporations are not eligible • be located within a downtown • be creditworthy, and have a creditworthy business and, or, project • propose an eligible activity or activities; eligible activities include:

  • acquisition of real estate
  • new construction
  • property rehabilitation
  • site improvements
  • acquisition or rehabilitation of fixtures, furnishings or equipment
  • working capital

note:top shop residential or other commercial rental units within the same property are eligible if more than half the total project cost is attributable to the first-floor commercial space; demolition is specifically excluded from eligibility

acquisition of real estate – defined as: a) purchase of a property where the majority of the total first-floor square-footage is vacant or about to become vacant and a retail or commercial tenant has committed to occupying the space, b) the acquisition of a property where the first-floor space is occupied but would be converted to retail or commercial use, or c) the acquisition of a building by an existing retail or commercial tenant that will result in the expansion of that business within three years

new construction – defined as building additions

property rehabilitation – defined as interior and exterior repairs, upgrading, reconstruction or restoration; eligible rehabilitation items also include, but are not limited to, new fixtures, signage, flooring, wall and ceiling coverings, lighting, restrooms as well as major systems upgrades (electrical, plumbing, heating, air conditioning, roofing)

site improvements – defined as exterior improvements not connected to the building; eligible site improvement items include, but are not limited to landscaping, sidewalk and curb replacement, repairs, parking lot construction, reconstruction and exterior lighting

acquisition or rehabilitation of fixtures, furnishings or equipment – defined as purchases or repairs of pieces essential to or that add value to the property, the business and its operationss

working capital – defined as short-term obligations and expenses to open and operate the business such as for accounts payable, inventory, payroll, advertising and overhead expenses

Job creation requirement

Those provided a loan through the program, whether a first- floor business or the property owner, are required to realize, create, new jobs at that location. For

loans up to $35,000, one full-time or two or more part-time-equivalent jobs are required to be created within two years of the loan closing date. For loans up to $70,000, two full-time or part-time- equivalent jobs must be created within two years of the loan closing date. Regardless of the amount of the loan, these jobs must be offered, be available, to persons from low to moderate-income-level households as determined each year for Cumberland County. The borrower will provide, throughout the life of the loan, information requested periodically by the Authority to document the fulfillment of the job creation requirement.

Loan details and terms

The guidelines differ depending on whether the borrower owns or leases the property. acquisition or rehabilitation where the property is owned by the borrower

  • the minimum loan amount is $5,000
  • the maximum loan is 50% of the total eligible project costs or $70,000, whichever is less
  • the annual interest rate on the loan is 2%
  • the loan shall be paid back over 25 years, with a balloon payment at 10 years
  • the total of this loan and any other senior liens cannot exceed the appraised value of the property
  • the debt to loan ratio cannot exceed 90% of the appraised value of the property
  • the borrower will be required to execute loan documents which will include a note and a mortgage against the property, and such other loan documents required by the Authority including, but not limited to, documents creating a security interest in the fixtures, furnishings and, or, equipment and personal guarantees which may or may not be secured by other property owned by the borrower
  • the loan may be subordinate to the loan of the first mortgage lender and other lien-holders determined on a case-by-case basis

property rehabilitation or site improvements including equipment, fixtures and furnishings, where the borrower has a lease (does not own the property)

  • the minimum loan amount is $5,000
  • the maximum loan amount is $35,000 or 50% of the total eligible project costs, whichever is less
  • the annual interest rate on the loan is 2%
  • the maximum repayment term is seven years
  • the total of this loan cannot exceed 90% of the total cost of the rehabilitation, improvements, equipment, fixtures and furnishings
  • the loan may be subordinate to other lien-holders in all cases
  • the borrower will be required to execute loan documents which will include a note and such other loan documents required by the Authority including, but not limited to, documents creating a security interest in the fixtures, furnishings and, or, equipment and personal guarantees which may or may not be secured by other property owned by the borrower

Fees including closing costs

There is no fee to apply. Applicants can expect to pay up to $500 for attorney’s fees and closing costs at the time of settlement.

Availability of loan funds

The loan funds will be provided to the borrower at closing.

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