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Economic Development Authority (EDA) Home Improvement Loan Program Criteria Draft 5 - October 25, 2010 Option 1 – Demolition Deferred Loan The purpose of this loan is to provide loans to demolish blighted single-family or duplex properties in Mounds View. Blight Qualification (for Demolition Deferred Loan Only) Once a deferred loan application is received, Mounds View’s Code Enforcement/Housing Inspector will arrange, by appointment, an inspection of the interior of the home to establish blight qualification. In addition, the inspector will make a determination as to the potential presence of hazardous materials on the property and will obtain a statement from the interested participant about any knowledge of the property’s use for production, storage, deposit, or disposal of any toxic or hazardous wastes or substances or asbestos products whatsoever, during the time the interested participant owned the property and before the date of interested participant purchased property. If a property satisfies the blight conditions as outlined herein, demolition procedures can continue. If the blight test cannot be met, the city will notify the interested person in writing indicating the reasons why the property cannot be considered as blighted. Loan Amount Up to $10,000 secured by a note & mortgage Loan Security All loans will be secured by a mortgage in favor of the City. The loan may be secured in a subordinate lien position behind other loans. Interest Rate If the loan is paid in full within 30 days of the date the loan becomes due and payable, the interest rate is 0%. If the loan is not repaid within 30 days of the date it becomes due and payable, the interest rate is the lesser of 18% per annum or the highest interest rate allowed by law. Loan Term The loan is due on sale, transfer of title, when the primary mortgage is paid off, or when the property ceases to be the owner’s primary place of residence. Eligible Properties Eligible properties that qualify as blighted single-family or duplex properties in Mounds View. See the Blight Qualification standard below. Demolition Bids Applicants are encouraged to first consider the Spring Lake Park/Blaine/Mounds View Fire Department’s house burning/training program demolition option. If that option is not feasible, applicants must obtain three demolition bids. The demolition contractor will be required to obtain all necessary City permits, pay applicable fees and provide for appropriate handling and abatement of any hazardous materials encountered. All contractors must be licenses and insured.