ST. PAUL, Minn. (AP) — A $750,000 program to upgrade rental housing in St. Paul's poorest neighborhoods is expanding citywide after it failed to draw many applicants.

St. Paul Housing and Redevelopment Authority's Rental Rehabilitation Loan Program offers zero-interest loans of up to $30,000 to landlords so they can rehab small, low-grade properties, the Pioneer Press reported.

The loans were first made available to the East Side, Frogtown, the North End and Summit-University neighborhoods.

The program has closed on three loans and is in the process of closing a fourth. None of the loans have moved a property up a grade within the city's building rankings. Most of the loans covered overdue basic maintenance issues.

The St. Paul City Council has voted to expand the program to the rest of the city as of Feb. 1.

Only owners of small rental properties, single-family, duplex, triplex, or fourplex buildings, are eligible for the loans. Landlords must agree to not raise rent more than 3 percent annually during the loan's life.

Loans will be available to landlords with Class C and D properties, the lowest conditions within the city's rankings. Those class requirements will be loosened in low-income, high-minority neighborhoods.

The original goal of the program was to help declining housing in areas of racially concentrated poverty, said city staff from the Department of Planning and Economic Development.