L.A. Owners Get Break on Seismic-Upgrade Loans

Owners of Los Angeles homes and apartments who want to safeguard their dwellings against potential earthquake damage can apply for below-market-rate loans from the city Housing Department, officials said this week.

The “Tie-Down L.A.” seismic mitigation loan program offers loans of up to $25,000 for single-family homes and $60,000 for multifamily dwellings at discounted rates, said David Fleischman, financial development officer for the Los Angeles Housing Department.

For the past week, the interest rate for the Tie-Down L.A. loan was 8.25%, versus the market rate of 9% to 9 1/2%, Fleischman said. The city acts as an intermediary for a lender, which will make the discounted loans, he said.

Approval for the loan is based primarily on the applicant’s good credit history and ability to repay the loan, he said. Loans of more than $5,000 are secured against the borrower’s property by a deed of trust.

Seismic mitigation may include bolting the property to its foundation, installing gas shut-off valves, bracing hot-water heaters and strengthening chimneys.

The city does not require that property owners do earthquake preparedness work, but officials hope many will take advantage of the discounted rate to do so.

“We can only encourage it, and that’s why the program is here,” Fleischman said.

The Housing Department will also forgive 20% of the loan for borrowers in specific neighborhoods whose income does not exceed 80% of the county median.

In addition, if seismic work is being done, borrowers may also use funds for other household refurbishment projects, such as replacing carpets or remodeling kitchens or bathrooms.

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Fleischman said that although the availability of low-interest funds for other projects may entice homeowners, the idea behind the program is to get property owners to do seismic improvements.

“We will not allow people to come in and get a home improvement loan without doing the seismic work,” he said.

Along with their loan applications, applicants must submit itemized cost estimates from licensed contractors for seismic and other improvements. All work must be done by licensed contractors.

The Housing Department will complete a free inspection to determine whether a property needs seismic mitigation work, and city officials will inspect afterward to be sure all work has been completed properly.

Anyone interested in applying for the loan should call (213) 367-9280 or send an e-mail that includes a name, address and phone number to dfleischman@LAHD.ci.la.ca.us.