06-25-1998 - Laserfiche WebLink

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Exhibit B City of Mounds View Interest Subsidy Program Terms for MHFA Home Improvement Loans PROGRAM OVERVIEW The Mounds View Economic Development Authority(EDA) is making available $40,000 in tax increment financing (TIF) funds for the purpose of subsidizing the interest rate of home improvement loans under this program. The loans will be Minnesota Housing Finance Agency (MHFA) originated by participating lenders and subsidized by the City of Mounds View. The city will provide interest subsidies for MHFA loans. Maximum loan amounts through this program will be$35,000. The loans will be originated by the participating lenders of Western Bank and Center for Energy and the Environment(CEE). The program expects to provide subsidized loans for a period of at least two years. The City of Mounds View will provide funds in an account at participating lenders for the purpose of subsidizing qualifying home improvement loans. Loans provided by MHFA and originated by the lender will be subsidized in a lump sum payment from the city account(i.e. a$10,000 loan for a term of 10 years at 8% subsidized to a 5%rate will require a 3% interest payment of$1,587.20 by the city. TARGET PROPERTIES All owner occupied residential properties having 1-4 units. For MHFA loans received through the Community Fix-up Fund program, the city has identified homes built before 1965 as the need/objective for the use of these funds. Homeowners qualifying for the Community Fix-up Fund program must have an adjusted household income of$69,900 or less. Homeowners with homes built after 1965 may qualify for other MHFA Fix-up Fund loans offered at a reduced interest rate. PROGRAM GUIDELINES The program will follow the following MHFA eligibility guidelines: 1. Underwriting of these loans will follow the MHFA procedural manuals and normal and prudent underwriting criteria. 2. Participating lenders will utilize City of Mounds View TIF funds to write down the interest rate on MHFA loans. MHFA loans will be written down to a maximum effective rate of 5%. Loan interest differentials will be paid by the City of Mounds View. 3. MHFA will be solely responsible for servicing the loans. 4. Eligible improvements and eligible properties are determined by the MHFA for the individual programs and are stated in the procedural manuals for each program.