Affordable home improvement financing for North St. Paul Homeowners
The City of North St. Paul partners with NeighborWorks Home Partners to provide affordable financing for homeowners who want to improve or repair their property. Loans are available up to $25,000.
Program Description: This loan program is designed to assist homeowners to maintain and improve their properties by offering flexible below-market rate financing. The program is administered by the NeighborWorks Home Partners (NWHP).
Eligible Properties: All properties must be located within the City of North St. Paul. Owner occupied single-family detached homes and duplexes are eligible. Condominiums and townhomes are eligible for interior repairs or improvements only. Homeowner Associations are not eligible.
Loan Amount: The minimum loan amount is $2,000. The maximum loan amount is $25,000. A household may receive more than one loan as long as they are current on their existing loan and the sum of the two loans does not exceed the maximum loan amount of $25,000.
Interest Rate: The loans are offered at an affordable interest rate.
Income Eligibility: There is no income limit.
Loan Term: The maximum possible maturity on a loan in an amount less than or equal to $10,000 is 10 years. The maximum possible maturity on a loan in an amount greater than $10,000 is 20 years. Final maturity of the loan shall be commensurate with the borrower’s ability to pay.
Loan Security: All loans over the amount of $5,000 will be secured by a Promissory Note and a Mortgage in favor of the City of North St. Paul Housing and Redevelopment Authority. Loans in the amount of $5,000 or less will be unsecured and borrowers will only be required to sign a Promissory Note.
Debt-to-Income Ratio: Applicants must have the ability to repay the loan. Applicants who have a potential debt-to-income ratio in excess of 50% will be denied loan financing.
Loan–to–Value Ratio: Applicants who have a potential loan-to-value (LTV) ratio in excess of 110% will be denied loan financing.
Underwriting: Applicant must be current on mortgage payments and property taxes. The NWHP practices prudent underwriting and follows generally accepted industry standards.
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, health and safety items
- Improve handicap accessibility
- Reduce long-term maintenance and energy costs
No more than $12,500 per borrower may be used for interior improvements.
Ineligible Improvements: Ineligible work shall include recreational or luxury improvements, such as a swimming pool or Jacuzzi, working capital, payment for owner’s labor, debt service, refinancing existing debts and other work items determined by NWHP staff to be ineligible.
Work by Owner: Work can be performed on a “sweat equity” basis. Loan funds are for materials only, not for labor or tools. The NWHP construction manager will determine if the owner has the ability to properly complete the work within the program time requirement. Material must be purchased and installed prior to the disbursement of the loan proceeds.
OTHER GENERAL CONDITIONS AND PROCEDURES:
- Rehabilitation Consulting: The NWHP construction manager will be available to borrowers to advise them about proposed projects prior to obtaining bids and will review all bids for reasonableness. Two bids must be obtained for all projects for which at least $5,000 of funds will be spent.
- Loan Costs: A non-refundable credit report fee is due at the time of application: $55.13 per married couple; $27.69 per non-married borrower. Mortgage filing fees and mortgage registration tax will be paid by the borrower at closing. An Owners and Encumbrance Report will be ordered to examine title. The cost is $75.00 and may be included in the loan amount.
- Initial Applications for Funding: Applications will be accepted by the NWHP on an ongoing basis and processed on a first-come, first-served basis, as funds are available until all program funds are committed.
- Contractors & Permits: Contractors must be properly licensed by the state of Minnesota when Permits must be obtained when required by city code. Do not sign a contract prior to the closing on your loan. Any work begun in advance of the loan closing will not be eligible to be paid for by the loan.
- Work Completion: Weather permitting, all work must be completed within 120 days of the loan closing.
- 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. NWHP can direct borrowers to additional financing sources. The additional funds needed to complete the project must be paid to the contractor prior to NWHP release funding to the contractor.
- Custody of Funds: Loan funds will remain in the custody of the NWHP until payment is made for completed work.
- Disbursement Process:
a. Payment to the contractor (or owner) will be made after completion of the An inspection will be performed by the City and/or NWHP to verify the completion of the work.
b. The following items must be received before the funds can be released:
- Final Invoice from each contractor showing all amounts paid and due
- Original Lien Waiver from each contractor
- Material Receipts for sweat equity projects
- Completion Certificate signed by each contractor and the borrower
- Evidence of all Permits Closed Out
- Final Inspection and approval by the NWHP. The above items must be provided to NWHP to begin the preparation of the check(s). Lien waivers must be provided before the funds will be released.
c. Payment checks may take up to 10 business days to prepare after the above items are Payments will only be made for work completed and approved.