Greg and Paula Peterson were ready to move. Their 1968 Coon Rapids split-level felt tired and cramped. Checkbook in hand, they toured a newer, fresher townhouse in Ham Lake.

Then Greg Peterson learned about Coon Rapids’ remodeling grant program, which offered up to $5,000 for large-scale remodels. The Petersons went for it. The money sounded enticing, Greg Peterson said, but the real genius of the program was the idea it sparked.

“What it does is it gets people thinking. The community wants to stay nice. They are making an effort,” he said.

The Petersons now have an $80,000 remodel underway that includes creating an open-concept main floor and a complete kitchen renovation. They also are adding stone to the home’s front facade to increase curb appeal. They’re one of about 45 families who have applied for grants through Phase II of Coon Rapids’ Home For Generations program, which is designed to revitalize the city’s housing stock.

The city rolled out Phase II this spring with a $25,000 pot, expecting to get a handful of applications. Instead, they were flooded with requests, and in July, the City Council quadrupled the funds to $100,000 to meet demand.

“It’s been very gratifying and satisfying to see this kind of response,” said Coon Rapids neighborhood coordinator Kristin DeGrande. “It’s been exciting.”

The city is offering up to $5,000 to homeowners who complete a remodel of $35,000 or more. There are no income requirements. Homes need to be at least 20 years old.

Why is the city investing in private homes?

Coon Rapids experienced its building boom a half-century ago. About half the city’s homes were built before 1980 and many are small ramblers and split-levels.

Concerned that families would leave Coon Rapids for newer suburbs and its housing stock would deteriorate, city leaders decided to promote remodeling and play up the benefits of staying in an established suburb. Those include longtime neighbors, large lawns, a canopy of trees and oftentimes a much smaller mortgage than new construction.

Still, persuading residents to stay put can be a tough sell, especially when older homes compete with new construction in neighboring suburbs such as Andover and Blaine.

The grant program is also about amping up the city’s curb appeal. To qualify for the full $5,000, homeowners must do some exterior renovation, such as replacing the front door, adding stone or brick to the house’s facade or redesigning a front porch. The city also is offering a free two-hour consultation with an architect and affordable financing.

“The whole neighborhood sees those things and benefits,” DeGrande said.

And it creates a buzz, officials say. Neighbors see a successful remodel and start thinking about ways to improve their homes.

Joan and John Wester are turning their 1964 two-story on Hummingbird Street into their dream home. They’re adding a 320-square foot family room with a vaulted ceiling, large picture windows, a stone fireplace and custom built-in bookshelves. The room will open onto a newly renovated kitchen. Outside, there’s a new patio area.

“It’s really a nice neighborhood. We know almost all our neighbors and all their kids,” said John Wester.

“It’s a good neighborhood and it just feels safe,” Joan Wester added.

Also, they love their large, fenced back yard with mature oaks and elms and a garden plot full of lilies and other flowers.

Their remodel will cost nearly $100,000. They are set to receive $2,500 in grant money.

“It was very easy to do,” Joan Wester said of the grant program. “It’s a really good ­incentive.”

Neighbors have come and checked out the work.

“There is so much going on in the neighborhood with people improving their homes,” Joan Wester said.

Jerry and Linda Skelley are remodeling their split-level inside and out. They’ve also qualified for a city grant.

“It’s a great program. It’s nice the city gets involved to help people and to give them a little incentive to do things to your property,” Jerry Skelley said.

There were many reasons to stay and make their home work.

“Part of it’s sentimental. It’s the first house we bought,” Jerry Skelley said. “It’s close to work for both of us. We like the neighborhood and we are a half-hour from everything — a half-hour from downtown [Minneapolis], half-hour from Mall of America.”

The city launched the Home for Generations initiative in 2009 after City Council members brainstormed about a home-revitalization program at a council retreat.

During Phase I, the city bought five older homes — four foreclosures and a short sale — that were typical of the Coon Rapids’ 1950s, 1960s and 1970s housing stock. The city redesigned the homes inside and out and opened them up as models. More than 8,000 people toured the homes.

Officials believe the project inspired nearly 100 remodels, according to building permits.

Recently, Home for Generations has won a “Bright Idea” award from the John F. Kennedy School of Government at Harvard University. Bright Ideas recognizes creative and promising government programs across the nation.