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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 may be 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. 4) 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 /> Multiple 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: Only 1 bid is required. All contractors must be properly licensed. <br /> Sweat Equity/ Homeowner Labor: Work may be performed by property owners on a "sweat equity' <br /> basis. Loan funds may be used only for the purchase of materials. Loan funds may be used to rent <br /> tools/equipment. <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 EDA. <br /> Borrower Fees: Borrower will be responsible for all applicable mortgage filing fees,title, flood <br /> certificate, credit report and any other fees associated with the loan. All fees may be financed in the <br /> loan. <br /> Exhibit A4 Page 3 <br /> Agreement between the City of Mounds View and Center for Energy and Environment <br />