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<br />APPLICATION & LOAN DISBURSEMENT PROCESS <br /> <br />The City of Elk River HRA (“HRA”) is the program administrator. Please call the City of Elk River at <br />763.635.1000 to answer any questions about Elk River’s loan program and/or your project. <br /> <br />DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL THE HRA HAS APPROVED <br />THE APPLICATION AND ALL DOCUMENTS REQUIRED BY THE HRA INCLUDING, BUT NOT <br />LIMITED TO, A NOTE AND MORTGAGE, HAVE BEEN PROPERLY EXECUTED AND THE LOAN <br />CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN <br />PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM. <br /> <br />Application Process <br />: Completed applications will be processed by the HRA on a first-come, first-served basis, as <br />funds are available until all program funds are committed. A Loan will be closed and funded after the Loan has been <br />approved and all applicable Loan Documents necessary in the opinion of the HRA have been executed by the <br />Applicant and HRA. <br /> <br />Rehabilitation Consulting <br />: City staff will be available to advise all Applicants about proposed projects and <br />conduct an optional initial inspection of the Applicant’s property and the house and/or commercial property and will <br />review bid(s) for reasonableness. <br /> <br />Loan Costs <br />: A credit report fee paid by Applicant at time of application; mortgage registration tax and filing fee <br />and title policy shall be paid by the Applicant at the closing of the Loan. The title policy in favor of the HRA may <br />be financed from the Loan proceeds. <br /> <br />Contractors & Permits <br />: Contractors must be properly licensed by the State of Minnesota when required. All <br />permits required by the City of Elk River must be obtained prior to the start of construction. <br /> <br />Total Project Cost <br />: It is the Applicant's responsibility to obtain the amount of funds necessary to finance the entire <br />cost of the demolition of the building on the Property and the construction of the New Home or other building <br />proposed for the Property. If the final cost exceeds the loan amount, the borrower must obtain the additional funds. <br />Borrower's contribution to project cost must be paid prior to release of loan funds. <br /> <br />Work Completion <br />: Weather permitting, work must be completed within six months of the date of the loan closing. <br /> <br />Disbursement Process <br />: Loan funds will be held in escrow at one of the Banks that the City of Elk River utilizes or <br />by the Title Company issuing the Title Policy to the HRA until the work has been completed in accordance with the <br />applicable contract and the following items have been received by the HRA: <br /> <br />Final Invoice <br /> 1. from each contractor showing all amounts paid and due. <br />Lien Waiver <br /> 2. . Original from each contractor. <br />Completion Certificate <br /> 3. signed by each contractor and the borrower. <br />Permits Closed <br /> 4. . Have the inspector sign the permit card, or have the inspector leave a message at <br />the City of Elk River 763.635.1000. <br />Final Inspection <br /> 5. and approval by City of Elk River staff. <br /> <br />It may take up to 10 business days after receipt of above items to prepare checks. Payment checks to contractors <br />must be countersigned by the borrower. Lien waivers must be provided before the funds will be released. <br /> <br />181302v1 <br />4 <br />