Furnace Replacement Program

About the Program

This program provides financial assistance to low- and moderate-income homeowners for replacement of older inefficient heating systems (less than 80% Annual Fuel Utilization Efficiency).

What are the household eligibility requirements?

  • Gross household income must not exceed 80 percent of the median family income. This is defined as income of all household members from all sources before taxes and withholding. Child support is included in this calculation.
  • The household must own the property and have occupied it for a minimum of one year. Applicants must have the property’s deed in their name to be considered the owner. Applicants purchasing a property through a Contract for Deed are not eligible for assistance.
  • Mortgage payments, taxes, insurance, and other financial obligations must be current.

What are the property eligibility requirements?

  • The property must be located within the city limits of Sioux Falls.
  • Mobile homes are not eligible under this program.

What is the maximum amount of assistance?

  • A loan will be provided for the lowest competitive bid up to $3,000. The homeowner would be responsible for any cost exceeding $3,000.

What are the terms of the loan?

  • Assistance is provided as a no-interest loan. If the homeowner retains ownership and remains in the home, one-third of the loan will be forgiven after the first full year from the date of the project close out and another one-third of the loan will be forgiven after the second full year. The remaining one-third of the principal loan balance will remain as a no-interest deferred loan becoming due and payable upon sale or discontinuance of occupancy.

What encumbrances will be placed on my property?

  • A signed mortgage will be recorded against the property until satisfied.

What work is eligible?

  • Replacement of older inefficient heating systems (less than 80% AFUE).
  • Installation of a 95% AFUE furnace.
  • Installation of a digital thermostat.
Old furnace
Old Furnace
  New furnace
New Furnace

What is involved?

  • Property owners who request financial assistance for rehabilitation work will be provided with technical assistance as needed.
  • Homeowners will obtain competitive bids from three licensed heating contractors
  • It should be noted that until you sign the contract and mortgage, you are under no legal obligation.

How do I apply for assistance?

  • Check income limits to see if you might qualify for the program.
  • Call or visit Community Development’s Affordable Housing Division.