8.2. HRSR 08-05-2019
Request for Action
To Item Number
Housing and Redevelopment Authority 8.2
Agenda Section Meeting Date Prepared by
Work Session August 5, 2019 Amanda Othoudt, ED Director
Item Description Reviewed by
Blighted Properties Discussion Cal Portner, City Administrator
Reviewed by
Action Requested
Information presented for discussion purposes.
Background/Discussion
Chair Toth requested a work session to discuss blighted properties in our community and action steps as
it relates to the demolition or rehabilitation of these properties. The HRA implements two programs to
assist with improving the communities housing stock.
HRA Blighted Properties Forgivable Loan Program
At their February 1, 2016, meeting, the HRA approved the HRA Blighted Properties Forgivable Loan
Program to meet the untapped need for assistance with demolition and other redevelopment activities
when either there is no current development plan or where future development visions are hindered by
current blight.
In some cases, despite a potential for future redevelopment, hazardous conditions or other public safety
factors may become a community’s immediate concern. Securing and maintaining vacant dilapidated
structures is costly. Therefore, the Blighted Properties Demolition & Forgivable Housing Loan program
includes funding for demolition activities when an imminent redevelopment opportunity does not
currently exist.
To date, no properties have been taken down or rehabilitated with this program, and the program has not
been proven successful in the community.
HRA Rehabilitation Loan Program
The HRA established the HRA Rehabilitation Loan Program in 2014 to provide low interest loans for
homeowners. It is administered by the Center for Energy and Environment (CEE).
The establishment of this program came about because the HRA found a need for redevelopment within
the city to prevent the emergence of blighting conditions, promoting the health, safety and welfare of
residents, encourage related development and redevelopment in order to protect and improve the tax base
and general economic vitality of the city.
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity
The program has proven to be successful with 17 total projects funded to date, and three more in the
pipeline.
At their November 5, 2018, meeting, the HRA approved the expansion of the targeted area to include the
entire Urban Services District beginning in 2019.
Financial Impact
N/A
Attachments
HRA Blighted Properties Forgivable Loan Program Policy
HRA Rehabilitation Loan Program Policy
N:\\Departments\\Community Development\\Economic Development\\HRA\\Administrative\\Agenda\\2019\\08-05-2019\\8.2 sr Blighted Properties
Discussion.docx
Blighted Properties Demolition & Forgivable Residential Loan Program
498470v2 JSB EL185-13
Residential and Redevelopment Authority
Blighted Properties Demolition &
Forgivable Residential Loan Program
Policy Guidelines & Application
HRA Adopted February 1, 2016
City Council Adopted: February 16, 2016
HRA
City of Elk River
Housing and Redevelopment Authority
13065 Orono Parkway
Elk River, MN 55330
763.635.1040
www.elkrivermn.gov
Blighted Properties Demolition & Forgivable Residential Loan Program
498470v2 JSB EL185-13
BLIGHTED PROPERTIES DEMOLITION & FORGIVABLE
RESIDENTIAL LOAN PROGRAM APPLICATION
TABLE OF CONTENTS
Introduction
Purpose/Background 1
Funding Availability 1
Deadlines/Requirements 1
Application Fee 1
Qualifying Projects 1
Eligible Applicants 2
Eligible Program Costs 2
Terms 2
Forgiveness 2
Required Appraisal/Assessment 2
Awarding Loans 3
Modifications to the Policy __________________________________________3
Preferred Score ___________________________________________________ 3
Application
Cover Page ________________________________________________________ 4
Site Identification ___________________________________________________ 5
Valuation _________________________________________________________ 5
Maps and Site Features _______________________________________________ 5
History ___________________________________________________________ 6
Current Conditions and Development Potential ____________________________ 6
Cost Analysis _____________________________________________________6
Sources and Uses of Funds (Budget Table) ________________________________ 7
Analysis of Loan Need_____________________________________________ 7
Financial Information________________________________________________ 8
Attachment Checklist ______________________________________________________ 9
Agreement _______________________________________________________________10
Application Review Worksheet ______________________________________________ 11
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498470v2 JSB EL185-13
BLIGHTED PROPERTIES DEMOLITION &
FORGIVABLE RESIDENTIAL LOAN PROGRAM POLICY
INTRODUCTION
PURPOSE/BACKGROUND: The city of Elk River Housing and Redevelopment Authority
(HRA) has developed a program to meet the untapped need for assistance with demolition and
other redevelopment activities when either there is no current development plan or where future
development visions are hindered by current blight.
In some cases, despite a potential for future redevelopment, hazardous conditions or other public
safety factors may become a community’s immediate concern. Securing and maintaining vacant
dilapidated structures is costly. Therefore, the Elk River HRA has created the Blighted Properties
Demolition & Forgivable Residential Loan program to include loan funds for demolition activities
when an imminent redevelopment opportunity does not currently exist.
FUNDING AVAILABILITY: Available funding amounts vary per budget cycle.
DEADLINES/REQUIREMENTS: Applications are due on the first Monday of each
month. Completed applications and supporting documentation must be received by the city of
Elk River by 4:30 p.m. on the due date to be considered for funding.
APPLICATION FEE: The applicant must submit an application fee of $500 plus legal and any
other out-of-pocket costs incurred by the HRA at the time of submittal.
QUALIFYING PROJECTS: A project qualifies for a loan if the following conditions are met:
1. Upon completion of the project, the property and structures will be owner-occupied
dwellings;
2. The structures constitute a threat to public safety because of inadequate maintenance,
dilapidation, obsolescence, or abandonment;
3. Upon completion of the demolition, the HRA reasonably expects that the property will be
improved and these improvements will result in redevelopment benefits to the
municipality.
4. The structure must be defined per MN State Statue 117.025, Subdivision 7 as “structurally
substandard”. "Structurally substandard" means a building:
(1) that was inspected by the local government and cited for one or more
enforceable housing, maintenance, or building code violations;
(2) in which the cited building code violations involve one or more of the following:
(i) a roof and roof framing element;
(ii) support walls, beams, and headers;
(iii) foundation, footings, and subgrade conditions;
(iv) light and ventilation;
(v) fire protection, including egress;
(vi) internal utilities, including electricity, gas, and water;
(vii) flooring and flooring elements; or
(viii) walls, insulation, and exterior envelope;
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498470v2 JSB EL185-13
(3) in which the cited housing, maintenance, or building code violations have not
been remedied after two notices to cure the noncompliance; and
(4) has uncured housing, maintenance, and building code violations, satisfaction of
which would cost more than 50 percent of the estimated market value for the
building, excluding land value.
ELIGIBLE APPLICANTS: Eligible applicants for this program must be the owner of the
property at the time of the application or before disbursement of funds.
ELIGIBLE PROGRAM COSTS: the Blighted Properties Demolition & Forgivable
Residential Loan program can pay up to $25,000 of the demolition costs for a qualifying site.
“Demolition costs” means the costs of demolition, destruction, removal, and clearance of all
structures and other improvements on the project site, including interior remedial activities, and
proper disposal thereof. As used in this subdivision, “structure” has the meaning given it in
section 116G.03, subdivision 11. Costs incurred before the loan is awarded are not eligible for
payment.
TERMS: Loans for demolition costs may be made subject to the following terms and
conditions:
1. The agreement to repay the loan must be a personal obligation of the property owner,
payable primarily from an identified source of income of the property owner, or other
security subject to review and approval by the HRA commission.
2. The loan shall bear interest at a rate equal to two percent;
3. If the property owner ceases to occupy the property as his/her/their primary residence prior
to the fifth anniversary of the closing date, the property owner will immediately repay the
principal amount of the loan and accrued interest to the date of repayment;
4. The principal amount of a loan may not exceed $25,000;
5. Loan proceeds shall be disbursed for eligible demolition costs as incurred or paid by the
borrower and upon submission of invoices and other supporting documentation satisfactory
to the commission.
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 owner 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
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498470v2 JSB EL185-13
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 loan.
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.
4. The HRA is a governmental entity and as such must provide public access to public data
it receives. Data deemed by applicant to be nonpublic data under State law should be so
designated or marked by applicant. See Minnesota Statutes, Chapter 13, as amended.
5. The application will be reviewed by the city staff to determine if it conforms to all city
policies and ordinances and to consider the following:
a. The availability and applicability of other governmental grants and/or
microloan programs.
b. Whether the proposed project after demolition will result in conformance with
building and zoning codes.
c. Whether it is desirous and in the best interests of the public to provide funding
for the project.
6. The HRA Commissioners will review each application in terms of its consistency with
the goals of the city’s Comprehensive Plan and Housing and Redevelopment Authority’s
Strategic Plan and in relation to the project’s overall impact on the community’s
economy.
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498470v2 JSB EL185-13
7. The HRA Commissioners will evaluate the project application in terms of the following:
a. Project Design - Evaluation of project design will include review of proposed
activities, time lines and a capacity to implement the project.
b. Financial Feasibility - Availability of funds, private involvement, financial
packaging and cost effectiveness.
• Appropriate ratio of private funds to Microloan funds.
• Sufficient cash flow to cover proposed debt service as demonstrated by
financial statements.
• Letter of Commitment from applicant pledging to complete the project
during proposed project duration, if the loan application is approved.
• Letter of Commitment from other financing sources stating terms and
conditions of their participation in the project if applicable.
c. All other information as required in the application and/or additional information
as may be requested by the Economic Development staff.
d. Project compliance with all city codes and policies.
e. Microloan Objectives - the applicant must demonstrate how the proposed
activities will meet at least one of the following objectives:
• The project contributes to the fulfillment of the city’s approved and adopted
economic development and/or redevelopment plans.
• The project prevents or eliminates slums and blight.
8. The HRA Commissioners will approve, deny, or request a resubmission of any
application submitted under this policy.
MICROLOAN POLICY REVIEW
The above criteria will be reviewed on an annual basis to ensure that the policies reflected in this
document are consistent with the economic development goals set forth by the city.
RIGHT OF REFUSAL
The HRA may deny any application if it is found not consistent with the goals of the city’s
Comprehensive Plan and Housing and Redevelopment Authority Strategic Plan, or Mississippi
Connections Plan and in relation to the project’s overall impact on the community’s economy.
PREFERRED SCORE:
Precedence will be placed on applications which meet a “preferred” score of 75 or more. To fulfill
this requirement of reviewing applications in an objective and fair manner, the following criteria
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498470v2 JSB EL185-13
have been assigned maximum point values in order to systematically award loans. All assigned
scores will be relative to scores awarded to other applications.
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498470v2 JSB EL185-13
Blighted Properties Demolition & Forgivable
Residential Loan Application
Cover Page
Applicant: _____________________________________________________________________
Applicant Address: ______________________________________________________________
City: _______________________________________ Zip Code: ________________________
Project Manager Contact (if different from above)___________________________________
Phone: ______-______-____________
E-mail: _______________________________________________________________________
Mailing Address: _______________________________________________________________
Application Author __________________________________________________________
Author’s Phone & email ________________________________________________________
Provide a written executive summary of the project, including the applicant’s involvement in
the project to date and how the applicant intends to manage the project should a loan be
awarded.
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I. SITE IDENTIFICATION AND HISTORY
SITE INFORMATION
1. Name of Site: _______________________________________________________________
Site Address: ________________________________________________________________
City: Zip Code:__________________________________ __________
Acreage of Site: Sq. Ft. of Site: ____________________________
2. A. Does the applicant own the property? _________________________________________
B. If not, at what point will the applicant acquire the property? _______________________
C. What is the purchase price? _____________________________
Attach the Purchase Agreement or other evidence of the commitment of both parties.
D. Is it anticipated that the property owner will retain ownership of the property once the
demolition is complete? _________________________________________________
3. Provide a legal description of the site.
SITE VALUATION
4. What is the current appraised or assessed value of the Site? ___________________
Attach the appraisal or assessor’s value.
5. What is the projected appraised or assessed value after the demolition activities have been
completed (prior to development)? ________________________________________
Attach the appraisal or assessor’s value.
6. What is the projected value after the proposed development is complete? _______________
MAPS AND SITE FEATURES
7. Attach an accurate and legible site and location map indicating the site showing locations of
prominent and relevant site features such as buildings, retaining walls, etc. (NOTE: maps shall
include property boundaries, a north arrow and bar scale). The map(s) should show the
following:
a) The current condition of the site including labeled structures and where and for what
activities the HRA money will apply.
b) The proposed potential development of the site including labeled structures if
known.
8. Please provide current photographs of the site. Note: Photographs are a very important
part of review process.
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498470v2 JSB EL185-13
HISTORY
9. Please attach a synopsis on the history and general background of the site. This includes, but
is not limited to, a description of the former and current uses of the site, as well as an
explanation of what has occurred on the site, leading to its current dilapidated condition.
CURRENT CONDITIONS
10. How many buildings are currently on site?
Residential _______ How many are occupied? ______ If vacant, for how long? ___________
11. Year building(s) was/were built: ________________________________________________
II. COST ANALYSIS
14. How much money are you seeking from the HRA? ________________________________
(May not exceed $25,000)
15. Fill out the budget table below indicating the uses, and amounts of all funds that will be used
for eligible costs as defined. The table should indicate the total project budget non-incurred
costs.
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498470v2 JSB EL185-13
III. SOURCES AND USES OF FUNDS
Demolition Uses of Funds for the Project (Budget Table)
Use of Funds (Activity) Amount Date Activity Will Occur
Demolition
Interior Abatement for
Demolition
Other:
Total
IV. ANALYSIS OF LOAN NEED
16. Describe how the structures on the property constitute a threat to public safety, are
functionally obsolete, or are economically unfeasible to repair.
17. Describe how demolition of the site will reduce blight and improve the property’s economic
vitality, functionality and aesthetics.
18. Describe how close the property is to existing sufficient public infrastructure.
21. Describe how the community is stabilized, health is improved or any environmental benefits
are achieved by the demolition of the site.
V. FINANCIAL INFORMATION
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498470v2 JSB EL185-13
22. Submit Historical Financial Statements: Financial statements should cover the past three
years. Financial Statements should include: Personal Tax Returns, Personal Financial
Statement, and details on existing debt agreements. A commitment letter from the primary
financial institution must accompany the application.
23. Are you committed to using the property as your primary residence for at least 5 years?
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498470v2 JSB EL185-13
VI. ATTACHMENTS CHECK LIST
Please attach the following:
______A) Residential Loan Program
1. Site Information
2. Site Valuation
3. Maps and Site Features
4. History
5. Current Conditions
_______B) Cost Analysis
_______C) Sources and Uses of Funds
_______D) Analysis of Loan Need
_______E) Financial Statements
1. Three Years of Personal Tax Returns
2. Details of Existing Debt Agreements
_______H) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration
_______I) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in
Project
_______J) Application Fee of $500 plus legal and any other out-of-pocket costs incurred by
the HRA
______K) Inspection report by an appropriate local government which identifies that
the property is cited for one or more enforceable housing, maintenance, or
building code violations.
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498470v2 JSB EL185-13
VI. AGREEMENT
I / We certify that all information provided in this application is true and correct to the best of
my/our knowledge. I / We authorize the City of Elk River Housing and Redevelopment Authority
to check credit references and verify financial and other information. I / We agree to provide any
additional information as may be requested by the HRA.
APPLICANT SIGNATURE_________________________________________________
BY
DATE
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498470v2 JSB EL185-13
APPLICATION REVIEW WORKSHEET
1. In the event of multiple applicants, and limited funds dedicated to the program, the
attached worksheet will be used to determine how the funds will be allocated.
The project meets the criteria set forth in Section IV of the Blighted Properties
Forgivable Residential Loan Policy. Check those which apply.
Upon completion of the project, the property and structures will be owner-occupied
dwellings; (50 points)
The current primary structure constitutes a threat to public safety because of inadequate
maintenance, dilapidation, obsolescence, or abandonment; (10 points)
Upon completion of the demolition, the HRA reasonably expects that the property will be
improved and these improvements will result in redevelopment benefits to the municipality;
(10 points)
The project results in the sale and/or redevelopment of structurally substandard properties
as inspected by the appropriate local government and cited for one or more enforceable
housing, maintenance, or building code violations. ; (5 points)
Subtotal Section 1 (maximum 75 points)
2. Consideration of Capacity. Check those which apply. Must meet all four to score 20 points. 0 points if
any boxes are unchecked.
Applicant included a realistic implementation /project schedule; (5 points)
Applicant has the ability to administer and monitor project; (5 points)
Applicant has the ability to conform to city, state and federal requirements;(5 points)
Applicant has obtained a letter of commitment to finance the project from their primary
lender; (5 points)
Subtotal Section 2 (maximum 20 points)
TO BE COMPLETED BY CITY STAFF
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3. Vacancy, Development Potential and Proximity to City Services
The length of vacancy of the property;
o 0-1 year: 1 point
o 2 years: 2 points
o 3 years: 3 points
o 4 years: 4 points
o 5+ years: 5 points
Subtotal Section 3 (maximum 10 points)
Subtotal Sections 1-3 (maximum 105 points)
Sub - Total Points: of a possible 105 points.
EXHIBIT A
PROGRAM GUIDELINES
This document includes guidelines for the
REVOLVING LOAN PROGRAM
Exhibit A Page I
Agreement between Elk River HRA and Center for Energy and Environment
CITY of ELK RIVER REVOLVING LOAN PROGRAM GUIDELINES
The Elk River Housing and Redevelopment Authority has funds available for homeowners to make
improvements to their properties. The Elk River Revolving 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 Elk River Loan Program and will secure
the most beneficial financing based on the borrower's needs independent of the funding source.
Interest Rate: 4%
Revolving Loan Program
Amortization Type: Amortizing (Monthly Payments Required).
Loan Amount: Minimum of $5,000 and Maximum of $25,000.
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.
$5,000 to $15,000 — up to 10 years
$15,001 to $25,000 — up to 15 years
Eligible Properties: 1.4 unit owner -occupied properties located within the geographical boundaries of
the City of Elk River AND the Urban Services District. A recent water and sewer utility bill may be used
to verify the borrower is in the Urban Services District. If applicant does not have a utility bill a letter of
eligibility from the City of Elk River can be used. Townhomes, Condominiums and properties held in a
Trust are eligible. The property must be at least 20 years old. Property must not be in a flood plain.
Ineligible Properties: Dwellings with more than four units, cooperatives, manufactured homes, and
properties used for commercial purposes. Properties located in a flood plain. Properties NOT located in
the Urban Services District.
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 business entities.
Ownership/Occupancy: Owner- occupied only.
Exhibit A page 2
Agreement between Elk River HRA and Center for Energy and Environment
Loan - to - Value Ratio: The ratio of all loans secured by the property, including the new loan, should
not exceed 100% of the property value. Half of the improvement value may be added to the initial
property value.
Income Limit: 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 43%will be ineligible to receive financing.
Credit Score Requirement: All borrowers must have a minimum of a 620 credit score.
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 24 months prior to loan closing. 5) The redemption period on prior foreclosures must have
occurred at least 24 months prior to the loan application date. 6) Generally, no more than two 30 -day
late payments on credit report in the past year (without reasonable explanation). Any 30 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
balances) cannot exceed the maximum program limit and previous loans are current and have an
acceptable payment history.
Eligible Use of Funds: Loans may be used to finance most permanent interior and exterior
improvements including, but not limited to: roofing, siding, doors/windows, plumbing, electrical, HVAC,
insulation, solar, garage, driveways, sidewalks/steps, painting, flooring, additions, landscaping, etc.
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 one estimate is required. All contractors must be properly licensed.
Sweat Equity Homeowner Labor: Work may be performed by property owners on a "sweat equity"
basis. Loan funds may be used only for the purchase of materials and to rent tools/ equipment, but not
to compensate for labor.
Remodeling Advisor Visit (RAV): The Remodeling Advisor Visit provides rehabilitation and/or
remodeling advice upon request of the resident. The intent is to help residents improve their homes by
providing technical assistance before and during the bidding and construction process. All "Eligible
Properties" are eligible for this service. This visit is not required and would be paid by the borrower(s).
Exhibit A Page 3
Agreement between Elk River HRA and Center for Energy and Environment
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 a City of Elk River
representative 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 Elk River Housing and
Redevelopment Authority. Borrower will pay all applicable title and filing fees, which may be financed in
the loan amount.
Borrower Fees: Borrower will be responsible for a 1% origination Fee, $50 Document Preparation Fee,
mortgage filing and service fees, flood certificate, credit report fees and any other applicable closing
costs, all which may be financed in the loan amount.
Underwriting, Decision: Applicants must have acceptable credit history (see Credit Requirements). CEE
will approve or deny loans based on a credit report, income verification and other criteria as deemed
necessary through CE E's underwriting guidelines. CEE shall refer to the Elk River HRA for any
questionable situations. All borrowers must have a credit score of at least 6201.
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 borrowers qualify.
Applicants must provide a completed application package including, but not limited to:
Completed and signed application form
Proof of income
Bids or estimates for proposed projects
Valid Identification
Other miscellaneous documents CEE may require.
Program Costs: Loan origination and other administrative fees will be paid out of the Program Budget.
Loan program marketing efforts will be billed directly to the City of Elk River Housing and
Redevelopment Authority. Should the HRA choose to commission CEE for marketing support it will be a
separate expense.
Total Proiect 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 representative 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 representative;
Exhibit A Page 4
Agreement between Elk River HRA and Center for Energy and Environment
■ Completion certificates) signed by borrower, contractor and city inspector or representative (if
a permit is not required);
• Lien waiver for entire cost of work;
• Evidence of city permit (if required)
Exhibit A Page 5
Agreement between Elk River HRA and Center for Energy and Environment