8.1. HRSR 07-06-2021 �J
etyof
ElkRequest for Action
River
To Item Number
Housing and Redevelopment Authority =8.1
Agenda Section Meeting Date Prepared by
Work Session July 6, 2021 Colleen Eddy, Economic Development Specialist
Item Description Reviewed by
Center for Environment and Energy (CEE) Programs Brent O'Neil, Economic Development Director
Discussion Reviewed by
Cal Portner, City Administrator
Action Requested
Receive information on the various programs offered through CEE.
Background/Discussion
At the June 7, 2021, HRA meeting,the commission discussed the HRA Rehabilitation Loan Program regarding
the current program guidelines and the impacts it might have on new applications.Jim Hasnik,Director of
Lending Services at CEE,will discuss the various programs offered through CEE to better understand how
and if the HRA's rehabilitation loan program could be modified.
Financial Impact
N/A
Mission/Policy/Goal
The goal of the HRA is to improve existing housing stock by offering incentives or programs to repair and
maintain residential properties.
Attachments
■ HRA Rehab Loan Program Policy
■ CEE Programs Presentation
■ Administrative Contract
The Elk River Vision
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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
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CENTER FOR ENERGY AND
ENVIRONMENT
Minneapolis, MN
Jim Hasnik
Director of Lending Services
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Center for Energy and Environment
Lending Center Staff
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Jim Hasnik Brenda Yaritz Cristina Lussio Jackie Flom DeShaun James
Director of Lending Services Lending Supervisor Loan Services Supervisor Loan Services Assistant Loan Officer
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Center for Energy and Environment
Lending Center Partners
• CEE administers programs in partnership with :
MN Department of Commerce
MN Housing Financing Agency
18 Cities
Anoka, Blaine, Brooklyn Center, Brooklyn Park, Champlin, Coon
Rapids, Crystal, Edina, Elk River, Fridley, Minnetonka, Mounds
View, New Hope, Richfield, Roseville, St. Paul, St. Louis Park
and Minneapolis
Ramsey County
Utilities
CenterPoint Energy, Xcel Energy and Great River Energy
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Center for Energy and Environment
Elk River Loan Activity
• Closed 2 city loans for $40,252 .22 in 2019
• No city loans closed in 2020 or 2021
• Closed 5 CEE Loans (EZPAY, Solar and Home
Improvement) for $61 , 863 since 2019
• Closed 9 MHFA loans for $ 181 , 820 since 2019
• Currently have 1 loan in process
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Center for Energy and Environment
Elk River Loan Program
• 4%
• $5, 000 to $ 15, 000 up to 10 years
• $ 15, 001 to $25, 000 up to 15 years
• Property must be at least 20 years old
• Debt to Income Ratio of 43%
• Loan to Value Ratio of 100%
• No Income Limits
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Center for Energy and Environment
Energy Programs
Funded by MN Department of Commerce, CEE, City of
Minneapolis & MHFA
Financing can be used for Energy Efficiency Projects such as:
HVAC, Heat Pumps
Water Heating
Windows / Exterior Doors
Insulation and Air Sealing
Rates range from 0% - 3. 125% (adjusted quarterly)
Up to $25,000 and up to 10 year term
Debt to Income Ratio 48%
Loan to Value Ratio 110% for secured loans
No Income Limits
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Center for Energy and Environment
Solar Program
Funded by CEE and MN Department of Commerce
Rates from 2.5% - 4.5% (determined by credit score and loan
term)
Up to $50,000
Up to 15 year term
Debt to Income Ratio of 43%
Loan to Value Ratio of 100%
No Income Limits
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Center for Energy and Environment
CenterPoint EZPAY Loan Program
Financing can be used for Energy Efficiency Projects such as:
HVAC
Water Heating
Insulation and Air Sealing
6.5%
Up to $20,000 and up to 10 year term
No Debt to Income or Loan to Value Ratio requirements
No Income Limits
Minimum credit score requirement of 620
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Center for Energy and Environment
Home Improvement Programs
• Home Improvement
Funded by CEE and MHFA
Rates range from 2.5% - 4.625%
Up to $75,000
Up to 20 year loan terms
Rates range from 0% - 4.625%
Debt to Income Ratio of 48% (MHFA), 43% (CEE)
Loan to Value Ratio of 110% (MHFA), 100% (CEE)
MHFA income limit of $156,700 (qualifying income) and no
income limit for CEE Program
Unsecured options available
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Center for Energy and Environment
Commercial Loan Programs
• Up to $100,000
• Up to 10 year loan terms
• For-profit entities
Rates from 1 % - 7%
• Non-profit entities (501 c3)
0%-1 % loan for Xcel OSES Lighting Projects
• Eligible projects include upgrades to:
Geothermal
Lighting technology
HVAC controls
Refrigeration equipment
Envelope air sealing and insulation
Solar
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Jim Hasnik
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Center for Energy and Environment
LOAN ORIGINATION AGREEMENT
This LOAN ORIGINATION AGREEMENT ("Agreement") is made by and between The City of ELK
RIVER HOUSING and REDEVELOPMENT AUTHORITY, with offices at 13065 Orono Parkway, Elk River,
MN 55330 ("Authority"), and CENTER FOR ENERGY AND ENVIRONMENT, with offices at 212 3rd
Avenue North, Suite 560, Minneapolis, Minnesota 55401 ("CEE").
RECITALS
A. The Authority has a need for certain professional services and desires to retain CEE to
provide said services, all subject to the terms and conditions contained in this
Agreement.
CEE is qualified to provide the desired professional services and desires to provide said
services for the Authority, all subject to the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained in this
Agreement, the parties agree as follows:
1. Services/Scope of Work
1.1 CEE shall in conjunction with the Authority develop and deliver the City of Elk
River Home Improvement Loan Program (hereinafter the "Program") and more fully
described in Exhibit A attached hereto. All activities delivered under the Program
shall be coordinated with the Authority's designated Economic Development
Director.
1.2 CEE shall assist the Authority staff in marketing the Program. CEE shall insure that
the Authority's sponsorship of the program is a prominent part of any marketing
effort.
1.3 The funding source is exclusively from the Authority and the program will be
referred to as the Authority Funded Program.
2. Compensation
2.1 The Authority shall compensate CEE for services provided under this agreement
according to the following schedule and more fully described in Exhibit 6 attached hereto:
Loan Set Up Fee
$1,500
The Authority shall pay CEE a one time loan set-up fee. This shall compensate CEE for
time and labor to create the loan program.
Loan Origination Fee
$550.00
The Authority shall pay CEE an Origination Fee for each loan closed using the Authority
Funded Program. The Origination Fee shall compensate CEE for assisting borrowers with
CONTRACT between Elk River Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #2917 Page 1
loan applications, preparation of loan documents, loan closing and other direct costs of
processing loans. Mortgage filing, title work, credit report, flood, origination fee,
document preparation fee and other applicable closing costs shall be paid by the
borrower. CEE shall provide a copy of closing documents including the loan note and
mortgage as documentation of the loan closing.
Annual Administrative Fee
$500.00
This shall be due January 15' of each calendar year the contract is in effect. To begin in
the year 2020.
The Authority shall compensate CEE only for services completed.
Upon request, CEE will provide marketing services for the following fees:
CEE Labor $65 per hour
Hourly rates are inclusive of all overhead expenses and will be charged only for hours
directly related to marketing. CEE will be reimbursed by the Authority for any non -labor,
out-of-pocket expenses, relating to these services on a dollar -for -dollar basis with no
mark-up. There is no cost for creating a program information sheet, creating links to our
website and assisting in writing articles to promote the program.
2.2 CEE shall invoice the Authority not more than two times each month for the principal
of loans and administrative fees. The Authority shall pay CEE within 20 days of receipt of
the invoice.
3. CLIENT's Obligations
3.1 If requested by CEE, the Authority shall make reasonable efforts to respond
promptly to requests from CEE for information and approvals regarding the
services to be provided under this Agreement.
3.2 If requested by CEE, the Authority shall make reasonable efforts to obtain
information and or permission for access from clients which may be necessary
for CEE to provide the services under this Agreement.
3.3 The Authority shall provide sufficient funding to fund eligible Authority funded
loans. The Authority shall determine the amount of funds allocated to the
Program.
3.4 The Authority shall establish eligibility for the Authority Funded Program and shall
provide these criteria in writing to CEE prior to commencement of any
marketing efforts.
3.5 The Authority shall make reasonable efforts to respond promptly to requests from
CEE for information and approvals regarding the services to be provided under
this Agreement.
CONTRACT between Elk River Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #2917 Page 2
4. CEE's Obligations
4.1 CEE shall use its best efforts to provide services under this Agreement in a
professional manner consistent with the care and skill used by reputable
members of CEE's profession.
4.2 CEE, and all of its employees or agents, shall comply with all statutes,
ordinances, rules, regulations and other laws applicable to the provision of
services under this Agreement.
4.3 CEE shall secure all permits and licenses required for performance of the
services under this Agreement.
4.4 CEE shall not engage in discriminatory employment practices against any
employee or applicant for employment and shall in all respects comply with all
federal, state and local laws, regulations and orders, including without limitation,
Chapter 363 of the Minnesota Statutes, as amended from time to time. Failure
to comply with the provisions hereof shall be deemed a material default under
this Agreement.
5. Term and Termination
5.1 Unless earlier terminated as provided in the following paragraphs, this
Agreement shall become effective on Ttia 4,2DI I and continue through
12/31/2021.
5.2 This Agreement may be terminated by either party, for any reason or no reason,
immediately upon written notice to the other party. In the event this Agreement
is terminated by CEE prior to the expiration of the term set forth in paragraph
5.1, the Authority shall compensate CEE for all services delivered up the date of
termination and CEE shall provide the Authority with such information as the
Authority may request regarding the status of the Authority Funded Program.
5.3 Any termination of this Agreement shall not release either party from their
respective obligations under sections 7 and 8 of this Agreement.
6. Insurance
6.1 During the term of this Agreement, CEE will obtain and maintain insurance in the
amounts listed below:
General Liability
Automobile Liability
Excess Liability
Workers Compensation
7. Liability and Indemnification
$2,000,000 Aggregate Limit
$1,000,000 Combined Single Limit
$1,000,000 Aggregate Limit
Statutory Limit
CONTRACT between Elk River Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #2917 Page 3
7.1 CEE represents that the services to be provided under this Agreement are
reasonable in scope and that CEE has the experience and ability to provide the
services.
7.2 CEE warrants that any services provided hereunder shall be done in a
professional and workmanlike manner.
7.3 CEE shall indemnify, defend and hold harmless Authority and its officers,
directors, employees and agents from and against any and all claims,
damages, losses, injuries and expenses (including attorneys' fees and damages
for death, personal injury and property damage) which Authority may incur as a
result of any act or omission by CEE in providing services under this Agreement.
7.4 Authority shall indemnify, defend and hold harmless CEE and its officers,
directors, employees and agents from and against any and all claims,
damages, losses, injuries and expenses (including attorneys' fees and damages
for death, personal injury and property damage) which CEE may incur as a
result of any act or omission by Authority in discharging its duties under this
Agreement.
8. Confidentiality
Unless otherwise agreed by Authority in writing, CEE shall maintain in confidence and
not disclose to any third party any information obtained regarding the Authority
and/or any of Authority's clients for which CEE is providing services; provided,
however, that this obligation to maintain confidentiality shall not apply to:
a) Information in the public domain at the time of disclosure;
b) Information which becomes part of the public domain after disclosure
through no fault of CEE; or
c) Information which CEE can demonstrate was known by it prior to the date
of this Agreement.
Notwithstanding the foregoing, CEE shall be entitled to disclose the documents or client
information covered by this paragraph to governmental authorities to the extent CEE
reasonably believes it has a legal obligation to make such disclosures and to the extent
CEE reasonably deems to be necessary; provided, however, that if CEE believes that any
such disclosure is required by law, it shall provide advance notice to the Authority to
provide the Authority with a reasonable opportunity to attempt to obtain an injunction or
other protective order preventing such disclosure.
9. Relationship of Parties
CEE will provide services as an independent contractor under this Agreement.
Neither CEE, nor any of its employees or agents, shall be considered employees of the
Authority for any purpose, and neither shall CEE be eligible for any compensation or
benefits which the Authority may provide to its employees from time to time. CEE shall
be solely responsible for all employment and other taxes applicable to providing
CONTRACT between Elk River Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #2917 Page 4
services hereunder, and the Authority will not withhold any taxes or contributions from
the compensation payable to CEE under this Agreement.
10. Notices
All notices, requests, demands and other communications required to be given in
writing under this Agreement shall be given to the other party in person or by mail as
provided in this section. If delivered personally, notice shall be deemed to have been
duly given on the date of delivery. If delivered by mail, such notice shall be sent via
first class U.S. mail, postage prepaid, to the address set forth at the beginning of this
Agreement or such other address as a party may otherwise request by written notice,
and notice shall be deemed duly given three (3) business days after mailing.
11. Assignment
This Agreement shall be binding upon and inure to the benefit of the parties and their
respective heirs, successors and assigns; provided, however, that neither party shall
assign or transfer in any manner, this Agreement or any portion hereof without the
prior written consent of the other party, and any attempt to assign or transfer without
prior written consent shall be void and of no effect.
12. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota.
13. Miscellaneous
13.1 Headings and captions used in this Agreement are for convenience only and
shall not affect the meaning of this Agreement.
13.2 This Agreement contains the entire agreement of the parties and supersedes all
prior agreements, discussions and representations, written or oral, concerning
the subject matter hereof.
13.3 No waiver by the Authority of any term or condition of this Agreement or any
document referred to herein shall, whether by conduct or otherwise, be
construed as a waiver or release of any other term or condition of this
Agreement.
13.4 This Agreement may only be amended in a written agreement signed by both
parties.
13.5 Except as expressly set forth in section 7, the rights and benefits under this
Agreement shall inure solely to the benefit of the Authority and CEE, and this
Agreement shall not be construed to give any rights, benefits or causes of
action to any third party.
CONTRACT between Elk River Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #2917 Page 5
13.6 The invalidity or partial invalidity of any provision of this Agreement shall not
invalidate the remaining provisions, and the remainder shall be construed as of
the invalidated portion shall have never been a part of this Agreement.
13.7 CEE shall comply with the provisions of Minnesota Statutes Chapter 13
(Government Data Practices) that are applicable to the Authority and shall not
disseminate any information concerning loan requests of the borrowers without
the prior written approval of the Authority.
13.8 This Agreement may be signed in any number of counterparts, each of which
shall be deemed an original and one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
The City of ELK RIVER HOUSING and
REDEVELOPMENT AUTHORITY
Print Name l o /f ? }y X-T!J —,-
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CENTER FOR ENERGY & ENVIRONMENT
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Date: A ' p� (Q –� c/ Tax ID # 4 1-1 647799
CONTRACT between Elk River Housing and Redevelopment Authority and CENTER FOR ENERGY AND ENVIRONMENT #2917 Page 6
EXHIBIT A
This document includes guidelines for the
REVOLVING LOAN PROGRAM
Exhibit A Page 1
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%
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.
e $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
balance(s) 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 CEE'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 620.
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 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 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 certificate(s) 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
TOTAL 2019 PROGRAM BUDGET $117,854
ELK RIVER LOAN PROGRAM BUDGET
Revolving Loan Program Budget Allocation (includes Origination Fees, Loan Set Up Fee and Annual
Administration Fee):
Budget Notes:
1. CEE shall submit monthly invoices to the City of Elk River Housing and Redevelopment Authority
for the loan principal and administrative fees.
2. 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 $550.00 per loan closed
(b) Annual Administration Fee $500.00
(c) One Time Set Up Fee $1,500.00
The Annual Administration Fee shall be payable on January 1St of each year the contract is active.
3. 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
only for hours directly related to the labor of all program marketing. CEE will also be reimbursed
by the City of Elk River Housing and Redevelopment Authority for any non -labor, out-of-pocket
expenses relating to these services on a dollar -for -dollar basis.
Exhibit B #2917 Page 1
Agreement between the City of Elk River Housing and Redevelopment Authority and Center for Energy and
Environment