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Income Limit: There is no maximum income limit. Debt - to - Income Ratio: Applicant must have the ability to repay the loan. An applicant who has a debt to income ratio in excess of 50% will be ineligible to receive financing. Credit Reauirements: 1) All mortgage payments must be current and reflect no 30 day late payments history in the past 12 month period (without reasonable explanation) 2) All real estate taxes must be current. 3) No outstanding judgements or collections. 4) Bankruptcy must have been discharged for at least 18 months prior to loan closing. 5) The redemption period on prior foreclosures must have occurred at least 18 months prior to the loan application date. 6) Generally, no more than two 60 -day late payments on credit report. Any 60 day late requires a documented explanation and reasonable reasons; medical, unemployment, divorce. 7) No defaulted government loans. Multiple Loans Per Property: More than one loan per property is allowed, however, the outstanding balance(s) cannot exceed $10,000. Eligible Use of Funds: Loans may be used to finance most interior and exterior improvements that improve the basic livability of the property. Garages, decks, porches, retaining walls, landscaping and fences can be repaired, replaced or built as new construction. Contractors must be properly licensed and permits must be obtained when required. Ineligible Use of Funds: Payment for work initiated prior to the loan being approved and closed, unless due to emergency. Recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc,), furniture, non -permanent appliances (unless part of a full kitchen remodel), and funds for working capital, debt service, homeowner labor or refinancing existing debts are NOT allowed. Bids: 2 bids are required when the work from any one contractor exceeds $5,000. All contractors must be properly licensed. Only 1 bid/material list is required for sweat equity projects. Sweat Eauity / Homeowner Labor: Work may be performed by property owners on a "sweat equity" basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to rent tools/ equipment or compensate for labor. Post Installation Inspection: Permits must be obtained and signed off by a City Inspector where required; when not required, a post Installation inspection will be performed by CEE to ensure the work has been completed before any funds will be released. Loan Security: All loans will be secured by a lien in favor of the City of Mounds View, Borrower will pay all applicable title and filing fees. Borrower Fees: Borrower will he responsible for a 1% origination Fee, lien filing and service fees, flood certificate and credit report fees all which may be financed in the loan amount. Exhibit A Page 5 Agreement between the City of Mounds View and Center for Energy and Environment