8.1. HRSR 01-06-2020 - Laserfiche WebLink

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FORGIVENESS: The HRA will forgive the principal of the loan and interest accrued but unpaid thereon up to 100 percent of the original loan amount, not to exceed the costs of demolition, after 5 years of maintaining the property as an owner occupied dwelling. Upon request from the HRA, the property ownerborrower will provide evidence that the property has been owner occupied for 5 years. REQUIRED APPRAISALS OR ASSESSMENTS: Land appraisals of the current (as-is) and expected (post-construction) value of the site are required so that the HRA can determine the fair market value. Both appraisals must be done by an independent appraiser using accepted appraisal methodology. In lieu of an appraisal, the applicant may use the current and projected assessed values as determined by the local assessor. Values cannot be determined in any other manner. The value of the property after the proposed development is completed is also requested. AWARDING LOANS: The HRA will award loans to projects that provide the highest return in public benefits for the public costs incurred and meet all of the statutory requirements. In order to evaluate the applications for public benefits with respect to the costs incurred, the law specifies priorities that the HRA must consider. Awards are based on the availability of funds. SIMULTANEOUS MICROLOANS The simultaneous use of different HRA microloan programs by any one borrower or for any one project is prohibited. CALL OF LOAN A loan shall become due and payable in full if the owner-occupant relocates outside of the city of Elk River prior to the maturity date of the loanproperty is not used as an owner-occupied dwelling for five years following the award date. COST OF REVIEW The applicant will be responsible for all legal, recording, and other fees required for protection of a security interest in the loan, payable by a $500 processing fee, which is paid at the time of application, plus legal and any other out-of-pocket costs incurred by the HRA. In addition to the processing fee, all legal and filing fees shall be paid by the borrower at loan closing. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL 1. All applicants shall first contact a primary lending institution which will be assisting with the financing of the overall project. 2. The applicant shall then meet with city staff to obtain information about the microloan program, discuss the project, and obtain application forms. 3. The applicant shall complete and submit an application form to the city, along with a $500 processing fee plus legal and any other out-of-pocket costs incurred by the HRA. The fee is used to cover processing expenses and any remaining funds will be returned to the applicant. The applicant must provide a letter of commitment for conventional financing from the primary lending institution \[or evidence of sufficient equity to complete the project?.\] 3 498470v2 JSB EL185-13 Formatted: Highlight