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Loan -to -Value Ratio: The ratio of all loans secured by the property, including the new loan, should <br />not exceed 110% of the property value. Half of the improvement value maybe added to the initial <br />property value. <br />Income Limit: There is no maximum income limit <br />Debt - to - Income Ratio: Applicant must have the ability to repay the loan. An applicant who has a debt <br />to income ratio in excess of 50% will be ineligible to receive financing. <br />Credit Requirements: 1) All mortgage payments must be current and reflect no 30 day late payments <br />history in the past 12 month period (without reasonable explanation) 2) All real estate taxes must be <br />current. 3) No outstanding judgements or collections. A) Bankruptcy must have been discharged for at <br />least 18 months prior to loan closing. 5) The redemption period on prior foreclosures must have <br />occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60 -day <br />late payments on credit report. Any 60 day late requires a documented explanation and reasonable <br />reasons; medical, unemployment, divorce. 7) No defaulted government loans. <br />Multiole Loans per Property: More than one loan per property is allowed, however, the outstanding <br />balance(s) cannot exceed $15,000. <br />Eligible Use of Funds: Loans may be used to finance most interior and exterior improvements that <br />improve the basic livability of the property. Garages, decks, porches, retaining walls, landscaping and <br />fences can be repaired, replaced or built as new construction. Contractors must be properly licensed <br />and permits must be obtained when required. <br />Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless <br />due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, <br />saunas, whirlpools, etc.), furniture, non -permanent appliances (unless part of a full kitchen remodel), <br />and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT <br />allowed. <br />Bids: 2 bids are required when the work from any one contractor exceeds $5,000. All contractors must <br />be properly licensed. Only 1 bid/material list is required for sweat equity projects. <br />Sweat Equity/ Homeowner Labor: Work maybe performed by property owners on a "sweat equity" <br />basis. Loan funds may be used only for the purchase of materials, Loan funds cannot be used to rent <br />tools/ equipment or compensate for labor. <br />Post Installation Inspection: Permits must be obtained and signed off by a City inspector where <br />required; when not required, a post Installation Inspection will be performed by CEE to ensure the work <br />has been completed before any funds will be released. <br />Loan Security: All loans will be secured with a mortgage in favor of the City of Mounds View. Borrower <br />will pay all applicable title and filing fees, which may be financed in the loan amount. <br />Borrower Fees: Borrower will be responsible for a 1% origination Fee, mortgage filing and service fees, <br />flood certificate and credit report fees all which may be financed in the loan amount. <br />Exhibit A Page 3 <br />Agreement between the City of Mounds View and Center for Energy and Environment <br />