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PHASE VI <br />DEFERRED LOAN PROGRAM <br />PROGRAM SUMMARY <br />I. General Description • <br />The Minnesota Housing Finance Agency (MHFA) Deferred Loan Program <br />provides deferred payment loans to low income homeowners for housing <br />improvements directly affecting the safety, habitability, energy efficiency and <br />accessibility of their homes. A Deferred Loan is a ban which need not be repaid <br />unless the borrower sells, transfers, or ceases to live in the improved property <br />within ten years of the date of the loan. After the ten -year period expires, the loan <br />is forgiven. The program, which was created in 1981, is entering its sixth phase. <br />The program is primarily funded through appropriations from the State <br />Legislature. The funding level for the 1991 -93 program phase will be $8 million. <br />There will also be a special $500,000 fund specifically targeted for accessibility <br />improvements. These funds are distributed statewide through local housing and <br />redevelopment authorities, community action agencies, and other nonprofit <br />organizations known as Administering Entities. <br />I1. Program Eligibility <br />Applicants must meet five eligibility criteria in order to qualify for this program. <br />They are as follows: <br />1. The applicant's household must have an adjusted gross income of $8,500 or <br />less. Adjusted income is calculated by taking the gross income (including all <br />public assistance payments) of all members of the household, age 18 or <br />over, and deducting from that amount $1,000 per person. MHFA may also <br />allow an extra deduction for extraordinary medical costs. <br />2. The applicant must own the property to be improved and it must be his /her <br />principal place of residence. <br />3. The gross value of the applicant's assets (excluding the property to be <br />improved and two surrounding acres) cannot exceed $25,000. <br />4. The property cannot contain more than two dwelling units. <br />5. The structure, upon completion of necessary improvements, will be <br />reasonably livable, safe, habitable, and energy efficient for the term of the <br />loan. <br />5/31/91 <br />-1- <br />Page 71 <br />2797/D <br />