07/22/2026
ECONOMIC DEVELOPMENT AUTHORITY
Commercial Small Cities Development Match Grant
Program
7-Year Deferred Forgivable Loan
PURPOSE
The purpose of the SCDP Match Support Program is to assist commercial property owners who wish to
participate in the Watkins Commercial Small Cities Development Program by providing a 0%
deferred, forgivable loan to cover the required 20% owner match portion of eligible rehabilitation
projects.
This program is intended to:
● Remove financial barriers to participation in SCDP
● Maximize utilization of available SCDP funds
● Encourage reinvestment in commercial properties within the Watkins 2024-2026 Small Cities
Development Program Commercial target area
Under the Watkins Small Cities Development Program, commercial projects are funded as follows:
● 70% – 0% deferred loan (forgivable over 7 years):
● 20% – Owner cash match (covered by this program making this amount forgivable over 7
years)
● 10% – 2% loan requiring at least $1,000 of principal to be repaid each year of the loan term:
ELIGIBILITY
To qualify for the Match Support Program, applicants must:
1. Own commercial property located within the designated Watkins SCDP target area.
2. Be approved for funding under the Watkins Small Cities Development Program (SCDP)
Commercial Rehabilitation Program.
Only improvements eligible under SCDP guidelines are qualified for Match Support assistance
LOAN STRUCTURE
Watkins Economic Development Authority
Commercial Small Cities Development Match Grant Program 2026
● Loan Type: 0% interest, deferred, forgivable loan
● Maximum Amount: $10,000 per property
● Term: Seven (7) years
● Payments: No monthly payments required
The loan shall be forgiven at a rate of 1/7 per year, beginning upon completion of the SCDP project and
issuance of final approval by the SCDP administrator.
Loan funds shall be disbursed in coordination with the SCDP administrator and only after documentation
of eligible expenses and project approval.
FORGIVENESS SCHEDULE
The outstanding balance shall be reduced annually as follows:
● End of Year 1: 1/7 forgiven
● End of Year 2: 2/7 forgiven
● End of Year 3: 3/7 forgiven
● End of Year 4: 4/7 forgiven
● End of Year 5: 5/7 forgiven
● End of Year 6: 6/7 forgiven
● End of Year 7: 7/7 forgiven
If the property is sold, transferred, or ceases commercial use during the 7-year term, the unforgiven
balance shall become immediately due and payable.
LOAN DOCUMENTATION & APPROVAL CONDITIONS
Watkins Economic Development Authority
Commercial Small Cities Development Match Grant Program 2026
All loans issued under this program shall be documented in coordination with the Watkins Small Cities
Development Program (SCDP). Documentation shall be consistent with the SCDP loan format and may
be incorporated into the primary SCDP loan documents when applicable.
At a minimum, the following shall be required:
● Executed promissory note
● Mortgage or repayment agreement, if recorded
● Verification of application approval under the Watkins Small Cities Development Program
Approval is contingent upon:
● Availability of funds
● Applicant receiving final approval through the Watkins Small Cities Development Program
PROGRAM MAY NOT BE USED RETROACTIVELY
This policy shall become effective upon approval by the Watkins Economic Development Authority and
shall remain in effect until amended or rescinded by formal action of the EDA. The EDA reserves the
right to deny applications based on funding availability, project readiness, or failure to meet
program requirements.
EDA approval is contingent upon final approval of the Watkins Small Cities Development
Program application.
This policy shall take effect upon approval by the Watkins Economic Development Authority
and shall remain in effect until amended or rescinded by formal action of the EDA.
Applications may be picked up at Watkins City Hall.
Contact UCAP regarding Minnesota Housing Finance Agency (MHFA) and Rehab Loan and Small Cities Development Program (SCDP)
