7.4. HRSR 02-07-2022 - Laserfiche WebLink

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Home Improvement Loan Program 1. Loan Amount: Loan amounts from $2,000 to $25,000. 2. Amortization Type: Monthly payment is required. 3. Loan Term: Up to 15 years. 4. Interest Rate: 3% fixed interest rate for borrowers making up-to-120% area median income (AMI) and 4% fixed interest rate for borrowers earning over 120% of the area median income. Income is calculated on projected income for all owners living in the property and household size. 5. Loan-to-Value ratio: 110%. 6. Income Restrictions: No income limits, but the interest rate is determined by projected gross income of the owners living in the property and household size. 7. Loan Security: The loan will be secured with a mortgage in favor of the EDA. 8. Credit / Underwriting Requirements: No more than two 30-day late payments within the last six months on the credit report. 90-day lates (within the past 24 months) require reasonable explanation from the applicant. No Bankruptcy or Foreclosure in the last 18 months. Current on mortgage payments and taxes. No outstanding judgements, defaulted government loans, collections (without reasonable explanation), or liens that are tied to the property. 9. Debt-to-Income Ratio: 50% 10. 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 and non-permanent resident aliens. Individual Tax identification numbers are not acceptable. 11. Ineligible Borrowers: Applicants with no ownership interest, business entities, foreign nationals and non-occupant co-borrowers 12. Eligible Properties: All 1-4 unit owner-occupied properties located within the geographical boundaries of the City of Brooklyn Park. Condominiums and townhomes are eligible for this program if their individual unit’s interior is not covered by the owner’s association as stated in the association by laws. Properties held in a trust or contract for deed are eligible. 13. Ineligible Properties: Non-owner-occupied, properties with more than 4 units, co-operatives, mobile homes and properties used for commercial purposes. 14. Eligible Improvements: Most permanent Interior and exterior improvements are eligible.. 15. Ineligible Improvements: No saunas, whirlpools, furniture, skylights, non-built- in appliances (unless part of a kitchen remodel), or funds for working capital, debt service or refinancing existing debts are allowed. Center for Energy and Environment will refer to City Staff whenever eligibility of an improvement project is questionable. 16. Sweat Equity: Work may be performed by property owners on a "sweat equity" basis. Loan funds may be used only for the purchase of materials. Loan funds cannot be used to compensate for labor, only for materials. Materials must be purchased and installed prior to the disbursement of the loan proceeds. When applicable, a signed city permit must be obtained.