ANA Offers Two New Housing Loan Programs

You spoke and we listened! Through a strategic planning process in early 2015, residents overwhelmingly said they wanted ANA to focus on programs that would benefit the neighborhood’s housing stock. The Housing Committee worked hard on crafting two different programs using Neighborhood Revitalization Program (NRP) dollars—a Revolving Loan Program and an Emergency Deferred Loan Program.
 
Both of the ANA loan programs are administered by the Greater Metropolitan Housing Corporation (GMHC). To apply for either loan, contact GMHC’s Housing Resource Center at 612-588-3033, which is located at 2148 44th Ave N.
 
Revolving Loan Program
Interest Rate: The interest rate charged on the loan will be based on the household's gross annual income. Interest rates are subject to change.
Interest Rate Total Annual Gross Household Income
3% interest More than 80% Area Median Income (AMI)
2% interest Equal to or less than 80% AMI

Area Median Income is determined by the U. S. Department of Housing and Urban Development and is adjusted by household size.

 
Loan Amount: Minimum loan size of $2,000 and maximum of $20,000.
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 is responsible to provide proof of having funds to pay for the remaining portion. NRP funds will not be disbursed until all other funds have been paid into the project.
Loan term: Generally one year per thousand dollars borrowed up to a maximum of fifteen (15) years.
Eligible Properties: Owner-occupied properties with up to 4 dwelling units located within the boundaries of the Audubon neighborhood. Condos and townhomes are eligible for interior repairs. Properties being purchased on a Contract-for-Deed must be recorded at the County and the CD must be approved by the City.
Eligible Borrowers: Owner-occupants of 1 to 4 unit residential properties located in the Audubon neighborhood who meet the program guidelines.
Loan-to-Value Ratio: The ratio of all loans secured by the property, including the new ANA loan, must not exceed 110% of the property value as established by current property tax statement, real estate market assessment or a certified real estate appraisal within the last 12 months.
Income Limit: There is no maximum income limit.
Debt-to-lncome Ratio: Applicants must have the ability to repay the loan. Applicants who have a debt to income ratio in excess of 50% will be denied loan financing.
Underwriting / Credit Requirements: Applicants must have an acceptable credit history. Recipients generally may not have more than three "90 day lates" for all accounts in the past 12 months (without reasonable explanation), or have had a bankruptcy in the last two years. Borrowers must be current on housing payments and property tax payments. GMHC will approve or deny loans based on a credit report, income verification and other criteria as outlined above.
Multiple Loans per Borrower: Homeowners may apply for more than one loan as long as they are current on their existing loan and the combined loan amounts do not exceed $20,000.

Eligible Improvements: Eligible work shall include repairs, replacement or new construction to:
• Improve the exterior and/or interior of the property
• Correct local or state code deficiencies and/or health and safety items

• Reduce long-term maintenance and energy costs
• Accessibility improvements

Ineligible Improvements: Work initiated prior to the loan being approved and closed. No recreation or luxury projects (pools, lawn sprinkler systems, playground equipment, saunas, whirlpools, etc.), furniture, skylights, non-permanent (built-in) appliances. Funds for working capital, debt service or refinancing existing debts are NOT allowed. GMHC will refer to ANA whenever eligibility of an improvement project is questionable.
Bidding: Except when labor is provided by the borrower, 1 bid is required for each home improvement project under $5,000 and 2 bids for each project more than $5,000. All contractors must be properly licensed. Permits must be obtained when required by City ordinance.
Sweat Equity: Work can be performed on a "sweat equity" basis. Loan funds cannot be used to compensate for labor even if the owner is a licensed contractor, only for materials. Loan funds cannot be used for the purchase or rental of tools or equipment, only for materials. GMHC must determine that the owner has the ability to complete the work within the program time requirement. Materials must be purchased and installed prior to the disbursement of the loan proceeds. When applicable, a signed City Inspections Department permit must be obtained by the borrower.
Post Installation Inspection: Properties are subject to a post installation inspection by GMHC. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds.
Work Completion: Weather permitting all work must be completed within 120 days of loan closing. Extensions may be granted by GMHC.
Loan Security: All NRP loans will be secured with a mortgage in favor of the City of Minneapolis.

 
 
Emergency Repair Deferred Loan Program
The intent of the ANA/NRP Emergency Repair Deferred Loan Program is to provide assistance to property owners in the Audubon Park neighborhood who face emergency home repairs and cannot qualify for other housing-related programs to remedy the situation.

Interest Rate: 0%
Loan Amount: Minimum loan Is $1,000. Maximum loan is $10,000 within any time period.
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 is responsible to provide proof of having funds to pay for the remaining portion. NRP funds will not be disbursed until all other funds have been paid into the project.
Loan term: Loan will be deferred until the borrower sells or transfers title or no longer resides in the home as their principal place of residence, at which time 100% of the loan is due.
Eligible Properties: Owner-occupied properties with up to 4 dwelling units located within the boundaries of the Audubon Park neighborhood. Condos and townhomes are eligible.

Ineligible Properties: Dwellings that are more than 4 units (these would be considered apartment and hence commercial properties), condos that are "condo-hotels", co-ops, manufactured homes, time shares, and properties used for commercial purposes. Properties owned by a trust.
Eligible Borrowers: Owner-occupants of 1-4 unit properties within the Audubon Park neighborhood who meet the program guidelines.
Loan-to-Value: The ratio of all loans secured by the property, including the new ANA loan must not exceed 110% of the property value as established by current property tax statement, real estate market assessment or a certified real estate appraisal within the last 12 months.
Income Limit: Loan applicants must have an annual gross household income of 50% or less of the HUD Area Median Income adjusted for household size.
Debt-to-lncome Ratio: Not applicable.
Multiple Loans per Borrower: Multiple emergency loans will be allowed if the balance is within the overall maximum income limit.
Eligible Improvements: An emergency is defined as an imminent condition that makes a house uninhabitable, dangerous to the occupants, or is capable of causing severe health problems. Repairs that will remedy such emergency repairs are eligible. Examples of eligible repairs include but are not limited to, water lines, sewer service, fire hazards, repair to exterior steps, railings, retaining walls, water seepage into basement, structural problems, or replacement of a furnace or hot water heater.
Ineligible Improvements: Work initiated prior to the loan being approved and closed. Personal property items, including appliances, furniture, hot tubs, swimming pools, and other luxury items, exterior plumbing (e.g. sprinkler systems), non-permanent landscaping fixtures (e.g. potted plants, furniture, bird feeders), repairs to property used for business or trade purposes, refinancing existing indebtedness, and labor costs of borrowers and/or residents. GMHC will refer to ANA whenever eligibility of an improvement project is questionable.
Bidding: The borrower must provide a minimum of 1 bid for each improvement project under $5,000 and 2 bids for each project more than $5,000. All contractors contracting for work must be properly licensed. Permits must be obtained when required by City ordinance.
Property Inspection: Required. Eligible improvements will be determined through an analysis of the emergency condition of the property. A GMHC construction manager will perform the analysis to determine the severity of the situation.
Post Installation Inspection: Properties are subject to a post installation inspection by a GMHC staff member. Where a permit is required, the work must be signed-off by a City inspector prior to release of funds.
Work Completion: All work must be completed within 30 days of loan closing. Extensions may be granted by GMHC.
 
Other General Information
Rehabilitation Consulting: A GMHC construction manager will be available to borrowers at no cost to advise them about proposed projects and will review bids for reasonableness.
Loan Costs: Loan origination fees will be paid for with NRP funds. The borrower is responsible for paying the following fees:
  • Credit Report: $15.00 per person or $20.00 per married couple. A credit report is required for all installment loans. The fee is due at the time of application.
  • Title Work: $100.00 (may be included in the loan amount)
  • Mortgage Filing Fees: $46.00 plus Mortgage Registration Tax. Fees are due at the time of loan closing.
Loan Servicing: Loans are serviced by the Community Reinvestment Fund (CRF). Borrowers will be assessed a 5% fee for submitting a late payment and/or a $15.00 fee if a payment is returned to the servicer for insufficient funds.
Total Project Cost: It is the borrower's responsibility to obtain the amount of funds necessary to finance the entire cost of the work. If the final cost exceeds the loan amount the borrower must obtain the additional funds. NRP funds will not be disbursed until all other funds have been paid into the project
Applications for Funding: Applications will be accepted by GMHC on an on-going basis and processed on a first-come, first-served basis, as funds are available until all program funds are committed. Borrowers shall be required to submit:
a. A completed application form and government addendum
b. A copy of current photo ID
c. A copy of the last two years' Federal Income Tax Returns, including W-2's and all schedules
d. A copy of two most recent payroll statements
e. A copy of your current mortgage statement
f. A signed "Data Privacy Act Statement and Authorization to Release" form
g. Other documentation as requested.
Custody of Funds: Loan funds will remain in the custody of GMHC until payment for completed work.
 
If you have a question that isn’t covered here, please contact the ANA office at 612-788-8790.
Committee Tags: