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HomeMy WebLinkAboutResolution 25-EDA-378 - 2025/09/22EDA RESOLUTION 25-EDA-378 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA A RESOLUTION APPROVING A SIXTH AMENDMENT TO THE LOAN ORIGINATION AGREEMENT WITH CENTER FOR ENERGY AND ENVIRONMENT BE IT RESOLVED by the Board of Commissioners (the "Board") of the Mounds View Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority is authorized pursuant to Minnesota Statutes, Sections 469.090 to 469.1081 (the "EDA Act"), to participate in providing certain loan programs (collectively, the "Loans"). 1.02. The Authority, on December 11, 2017, approved a Loan Origination agreement with the Center for Energy and Environment, a non-profit corporation formed under the laws of the State of Minnesota. 1.03. The Authority has determined that an amendment is necessary in order to extend the term of the Agreement. 1.04. The Authority acknowledges that the terms of the amendment to the loan origination agreement (the "Amendment"), a copy of which is attached as Exhibit A to this resolution, which includes program guidelines (A-2) and budget (A-3) has not changed except for the Termination Date, the elimination of the 0% Sewer Loan, and Emergency Loan Program, and a new budget of $60,000. 1.05. The Board has reviewed the Amendment and finds that the execution thereof by the Authority and performance of the obligations thereunder are in the best interest of the Authority, the City and its residents. Section 2. Authorization. 2.01. The recitals set forth in this Resolution are incorporated into and made a part of this Resolution. 2.02. The Board hereby approves the Amendment in substantially the form presented to the Board on the date below and further subject to any modifications that do not alter the substance of the transaction and that are approved by the Authority's attorney. 2.03. The proper Authority officials, staff and consultants are authorized to execute the Amendment and to take any and all other steps necessary or convenient in order to carry out the obligations under the Amendment, as well as to fulfill the intent of this Resolution. EDA Resolution No. 25-EDA-378 Page 2 Adopted on the 22nd day of September 2025. Gar Meehlhause, EDA President Attest: N e Zik und, Executive Director (SEAL) EXHIBIT A Amendment 6 to the Loan Origination Agreement AMENDMENT 6 to the LOAN ORIGINATION AGREEMENT Between ECONOMIC DEVELOPMENT AUTHORITY in and for the CITY OF MOUNDS VIEW And CENTER FOR ENERGY AND ENVIRONMENT City of Mounds View Home Improvement Loan Program The Agreement made the 1 st day of January, 2018 by and between the Economic Development Authority in and for the CITY OF MOUNDS VIEW, with offices at 2401 Mounds View Blvd, Mounds View, MN 55112, (the "Authority"), and CENTER FOR ENERGY AND ENVIRONMENT, with its offices at 212 3`d Avenue North, Suite 560, Minneapolis, Minnesota 55401 ("CEE") is hereby amended. 1. Services/Scope of Work of the agreement shall read: 1.1 CEE shall, as directed by the Authority, develop and deliver the City of Mounds View Loan Programs (hereinafter the "Program") which are more fully described in Exhibit A6, attached hereto. All activities delivered under the Program shall be coordinated with the Authority's designated representative, who shall be the Finance Director or the Assistant City Administrator. 2. Compensation of the agreement shall read: 2.1 The Authority shall compensate CEE for services provided under this Agreement according to the following schedule and more fully described in Exhibit B6 attached hereto: Loan Origination Fee for all Residential Loans $750 Annual Administration Fee $5,000 Post Installation Inspection Fee $175 The Annual Administration Fee shall be payable on January 1st of each year the contract is active. 5. Term and Termination of the agreement shall read: 5.1 Unless earlier terminated as provided in the following paragraphs, this Agreement shall become effective on January 1, 2026 and continue through December 31, 2026. All other sections of the contract shall remain as written in the original and amended agreements. IN WITNESS WHEREOF, the parties hereunder set their hands as of the date written below: ECONOMIC DEVELOPMENT AUTHORITY of MOUNDS VIEW Gary e hlhause, EDA President Date September 22, 2025 By l/v Ny Zikn nd, Executive Director Date September 22, 2025 CENTER FOR ENERGY AND ENVIRONMENT BY , I S "2j Stephanie Haddad, COO Date .7 A T #5187 TAX ID 41-1647799 w EXH I B IT A6 PROGRAM GUIDELINES MOUNDS VIEW LOAN PROGRAM GUIDELINES The City of Mounds View EDA is making funds available for homeowners to make improvements to their properties. The Mounds View Loan Program is designed to supplement existing loan programs available from MHFA, CEE, private lenders and other housing resources. This program is not intended to be the sole source of improvement funds available to the City. Center for Energy and Environment shall serve as the administrator for the Mounds View Loan Program and will secure the most beneficial financing based on the borrower's needs independent of the funding source. Residential Home Improvement Loan Program Interest Rate: 3%for households with income less than or equal to 80% of HUD Area Median Income 4%for households with income greater than 80% of HUD Area Median Income ***Income shall be determined by projected income for the next year and is based on household size. Amortization Type: Amortizing (Monthly Payments Required) Loan Amount: Minimum of $2,000 and Maximum of $15,000. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the size of the loan and the borrower's ability to repay the loan. The minimum term is 1 year; the maximum term will be 10 years. Eligible Properties: 1-4 unit owner -occupied properties located within the geographical boundaries of the City of Mounds View. Townhomes and Condominiums are eligible. Ineligible Properties: Dwellings with more than four units, cooperatives, manufactured homes and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social security number, Including: U.S. Citizens, Permanent Resident Aliens, Non -Permanent Resident Aliens. TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE. Ineligible Borrowers: Including but not limited to: - Foreign Nationals, Non -Occupant Co -Borrowers, and Properties held in the name of a business. Ownership/Occupanck Owner- occupied only. Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should not exceed 110% of the property value. Half of the improvement value may be added to the initial property value. Income Limit: There is no maximum income limit Debt -to - Income Ratio: Applicant must have the ability to repay the loan. Anapplicant who has a debt to income ratio in excess of 50%will be ineligible to receive financing. Credit Requirements: 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 $15,000. 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: Only 1 bid is required. All contractors must be properly licensed. Sweat Equity / Homeowner Labor• Work maybe performed by property owners on a "sweat equity" basis. Loan funds maybe used only for the purchase of materials. Loan funds maybe used to rent tools/equipment. 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 with a mortgage in favor of the City of Mounds View EDA. Borrower Fees: Borrower will be responsible for all applicable mortgage filing fees, title, flood certificate, credit report and any other fees associated with the loan. All fees may be financed in the loan. Underwriting Decision• Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as deemed necessary through CEE's underwriting guidelines. CEE's decision shall be final. Appeals can be made to the City of Mounds View. Work Completion: All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case by case basis. Residential Mobile Improvement Loan Program Interest Rate: 3% for households with income less than or equal to 80% of HUD Area Median Income 4% for households with income greater than 80% of HUD Area Median Income ***Income shall be determined by projected income for the next 12 months and is based on household size. Amortization Type: Amortizing. (Monthly Payments Required) Loan Amount: Minimum of $2,000 and Maximum of $10,000. Loan term: Generally, one year per $1,000 borrowed. This will be somewhat flexible depending on the size of the loan and the borrower's ability to repay the loan. The minimum term is 1 year; the maximum term will be 7 years. Eligible Properties: Residential mobile homes located within the geographical boundaries of the City of Mounds View. Ineligible Properties: Non owner -occupied , cooperatives, time shares, properties held in the name of a trust and properties used for commercial purposes. Eligible Borrowers: All borrowers must be legal residents of the United States, as evidenced by a social security number, Including: U.S. Citizens, Permanent Resident Aliens, Non -Permanent Resident Aliens. TAX IDENTIFICATION NUMBERS (ITIN) ARE NOT ACCEPTABLE. Ineligible Borrowers: Including but not limited to: - Foreign Nationals, Non -Occupant Co -Borrowers, and Properties held in the name of a trust or business. Ownership/Occupanck Owner- occupied only. Loan - to - Value Ratio: Not applicable 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 Requirements: 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: Only 1 bid is required. All contractors must be properly licensed. Sweat Equity / Homeowner Labor: Work maybe performed by property owners on a "sweat equity" basis. Loan funds maybe used only for the purchase of materials. Loan funds maybe used to rent tools/ equipment. 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 EDA. Borrower Fees: Borrower will be responsible for all applicable mortgage filing fees, title, flood certificate, credit report and any other fees associated with the loan. All fees may be financed in the loan amount. Underwriting Decision: Applicants must have acceptable credit history. CEE will approve or deny loans based on a credit report, income verification and other criteria as deemed necessary through CEE's underwriting guidelines. CEE's decision shall be final. Appeals can be made to the City of Mounds View. Work Completion: All work must be completed within 120 days of the loan closing. However, when warranted, CEE may authorize exceptions on a case by case basis. General Program Conditions Application Processing Loans will be distributed on a first come first serve basis as applicants qualify. Applicants must provide a completed application package includingthe following in order to be considered for funding. ➢ Completed and signed application form ➢ Proof of income ➢ Bids or estimates for proposed projects ➢ Other miscellaneous documents CEE may require Contractors/Permits: Contractors must be properly licensed. Permits must be obtained when required by City ordinance. Program Costs: Loan origination, post installation inspection and remodeling advisor visit fees will be paid per the Program Budget. Loan program marketing efforts will be billed directly to the City of Mounds View EDA and is a separate expense should the City of Mounds View EDA choose to commission CEE for marketing support. Borrowers will pay all mortgage filing fees and related closing costs. Total Project Cost: It is the borrower's responsibility to obtain the amount of funds necessary to finance the entire cost of the work. In the event the final cost exceeds the original loan amount, the borrower must obtain the additional funds and show verification of the additional funds in order to be approved for the Loan. Disbursement Process: Payment to the contractor (or owner in sweat equity situations) will be made upon completion of work. An inspection will be performed by a City Inspector and/or CEE to verify the completion of the work. The following items must be received prior to final disbursement of funds: • Final invoice or proposal from contractor (or materials list from supplier); • Final inspection verification by a City Inspector (or CEE); • Completion certificate(s) signed by borrower and contractor; • Lien waiver for entire cost of work; and • Evidence of City permit (if required). A-2 EXHIBIT B6 TOTAL PROGRAM BUDGET $60,000 MOUNDS VIEW LOAN PROGRAM BUDGET A. Loan Program Budget Allocation for the Residential Home Improvement and Mobile Home Improvement Loan Programs and All Administrative Fees• $60,000 Budget Notes: 1. Funds to be transferred between Budget Categories in this Exhibit that do not change the Total Contract Amount must be approved in writing by the City of Mounds View EDA. 2. CEE shall submit monthly invoices to the City of Mounds View EDA for the loan principal and administrative fees and quarterly invoices for the aged delinquency reporting services. 3. Services performed by CEE will initially be funded from the Total Program Budget as stated above and paid in accordance with the following schedule. (a) Loan Origination Fee for all Residential Loans $750 per loan closed (b) Post Installation Inspection $175.00 per inspection (c) Annual Administration Fee $5,000 The Annual Administration Fee is payable on January 15t of each year the contract is active. 4. Marketing Marketing efforts will be supported by CEE and marketing costs are not included in the administrative budget. Hourly rates are inclusive of all overhead expenses and will be charged onlyfor hours directly related to the labor of all program marketing. CEE will also be reimbursed by the City of Mounds View EDA for any non -labor, out-of-pocket expenses relating to these services on a dollar -for -dollar basis.