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Exhibit A DRAFT 5/22/98 City of Mounds View Interest Subsidy Program Terms for Market Rate Home Improvement Loans Program Overview The Mounds View Economic Development Authority(EDA) is making available tax increment funds that will provide a 3% annual interest rate subsidy for new market rate home improvement loans which meet the criteria of the program. The loans originated under this program will be for a term of up to 10 years. The maximum city subsidy for all loans and associated administrative costs issued in the first two years is $20,000. Aggregate subsidies for future years will decline each year as loan balances decrease. Aggregate subsidies will be paid by the city over the life of the loan. The loans will be provided through Western Bank and subsidized by the City of Mounds View. 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 Western Bank for the purpose of subsidizing qualifying market rate home improvement loans. Loans provided by Western Bank will be subsidized by amortization payments over a maximum of a 10 year period(i.e. a$10,000 loan at a market rate of 10%, subsidized to a 7%rate will require a 3% interest subsidy payment of$ by the city over a period of 10 years. The city's subsidy will be amortized over a 10-year payment.) Credit will be given for loans which are paid off early. Target Properties All owner occupied residential properties having I-4 units. No restrictions for household income or age of housingg will be required for this program. 0 ov -11n r {,v � ,La �d Also.A4Q tLCLQi toe no ekdt 13, (Ai ucve4.te+,.4s Program Guidelines 1. The City of Mounds View will subsidize 3%of the market interest rate for home improvement loans within the city. 2. Western Bank will utilize City of Mounds View tax increment funds to write down market rate home improvement loans not to exceed$20,000 of a total subsidy in the program's first two years. 3. Loans will be approved and originated under Western Banks underwriting criteria. 4. Western Bank will be responsible for servicing the loans. 5. Eligible improvements and eligible properties are determined by criteria adopted by the city(see Eligible Improvements). 6. Borrowers' must provide proof of income, a property tax statement, bid for work, and contractor warranties. 7. The property owner has 9 months from the date of closing to complete the improvement(s). 8. Loan proceeds will be dispersed by having checks issued to the applicant and contractor for completed work. 9. The city will offer a remodeling counselor for any property owner desiring assistance in evaluating and prioritizing improvements to their property. Remodeling counselors will also