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A Metro Home Improvement Loan offers up to $40,000 for home renovations in the 11-county metro area
If you own a home in Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington or Wright county, you may qualify for $10,000 to $40,000 in home improvement financing!
Who qualifies?
- Standard underwriting criteria apply including review of a credit report. Borrower’s median credit score must be at or above 580.
- Borrower’s gross monthly debts cannot exceed 50% of gross monthly income.
- The total gross household income cannot exceed 120%* of the area median income (AMI) if the property is found on the census map. If the home is not on the census map, the household income cannot exceed 80% of the AMI.
- Borrower’s existing first mortgage must be a prime/A-rated fixed rate mortgage loan.
How do I apply?
Completed applications will be processed by NeighborWorks on first-come, first-served basis, as funds are available until all program funds are committed. After loan approval, you will be contacted regarding a closing to sign a Promissory Note, Mortgage and subordination disclosure.
You can read the full program guidelines below to see if your improvement request qualifies. If your household does not meet these guidelines, NeighborWorks may still have a program that works for you. Contact us at 651-292-8710 or fixup@nwhomepartners.org to learn more.
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Program Guidelines
Program Overview: NeighborWorks Home Partners is offering home improvement loans to residents to encourage home renovation and increase home value within the 11- county metro area. Current available dollars for loans are based upon the fund balance for any given period.
Loan Amount: $10,000 – $40,000.
Interest Rate & Loan Term: The interest rate is below market rate and will be fixed, with monthly installment payments over a term of up to 30 years.
Loan Security: All loans will be secured by a mortgage in favor of NeighborWorks Home Partners. The loan may be secured in a subordinate lien position behind other loans in accordance with our loan subordination policy.
Borrower Eligibility:
- Credit: Standard underwriting criteria apply including review of a credit report. Median Credit score must be at or above 580.
- Debt to Income Limit: Borrower’s gross monthly debts cannot exceed 50% of gross monthly income.
- Income Limit: The total gross household income cannot exceed 120%* of the AMI if the property is found on the census map. If the home is not on the census map, the household income cannot exceed 80% of the AMI. Income is based on household person that will be going on title.
Property Eligibility:
- Home must be in selected census tracts within the 11-county metro – Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington and Wright.
- All properties must be owner-occupied.
- 1-4 unit properties, Condominiums, townhouses.
- The borrower’s combined mortgage debt including the NWHP Loan cannot exceed 100% of the property value, based on the taxable market value as determined by the county for the current year. 65% of the amount of the NWHP Metro Home Improvement Loan will be added to the current value in making this calculation. Applicants may also submit a third-party appraisal or market analysis that has been completed within the last 12 months. Such appraisal or market analysis is to be obtained by the applicant at their expense.
- Borrower’s existing first mortgage must be a prime/A-rated fixed rate mortgage loan.
- Properties that are governed by an active Homeowner’s Association must receive written approval for planned exterior improvements in accordance with the guidelines of this loan program and association by-laws and/or covenants.
- Properties may not be within the flood plain as identified by FEMA.
Eligible Improvements: Work shall include repairs, replacement and new construction that will:
- Correct local or state code deficiencies, health and safety items,
- Concern general home remodeling,
- Improve accessibility,
- Reduce long-term energy costs,
- Finish garages,
- Or conduct permanent landscaping.
Ineligible Improvements: Recreational/luxury improvements, working capital, debt service or refinancing of existing debts.
Application and Disbursement Process
DO NOT SIGN ANY CONTRACTS OR START YOUR PROJECT UNTIL A CLOSING HAS TAKEN PLACE. ANY PROJECT BEGUN BEFORE A LOAN CLOSING HAS TAKEN PLACE WILL BE INELIGIBLE FOR PARTICIPATION IN THE PROGRAM.
Homeowner Association By-Laws & Covenants: Loan applicants from single-family attached or zero-lot-line detached homes with an active Homeowner’s Association will be required to provide written approval from the Homeowner’s Association certifying that the exterior improvements to be funded through this loan program are permissible under governing by-laws and/or covenants of the association.
NWHP is not liable or responsible for any violations of association by-laws and/or covenants by the applicant for improvements undertaken through this loan program.
Application Process: Completed applications will be processed by NeighborWorks on first-come, first-served basis, as funds are available until all program funds are committed. After loan approval, you will be contacted regarding a closing to sign a Promissory Note, Mortgage and subordination disclosure.
Loan Costs: Borrowers will be charged a credit report fee at application. The title fee may be financed through the loan. The recording fees to the County will be paid by the borrower at closing.
Contractors & Permits: Contractors must be properly insured and licensed by the State of Minnesota when required. Permits must be obtained when required by city code. Two bids are required for work that exceeds $5,000. Borrowers must attain required bids and can seek assistance from NeighborWorks in this process.
Work by Owner: No Sweat equity.
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. Borrower’s contribution to project cost must be paid prior to release of loan funds.
Work Completion: Weather permitting, work must be completed within 120 days of loan closing.
Disbursement Process: 30% of the proceeds will be paid up front to the contractor. Then Loan funds will remain in escrow with NeighborWorks until the work is completed. The following items must be received before the funds can be released:
- Final Invoice from each contractor showing all amounts paid and due.
- W-9 from each contractor prior to payment.
- Lien Waiver signed by each contractor.
- Completion Certificate signed by each contractor and the borrower.
- Permits Closed. Have the inspector sign the permit card.
Homeowners are required to attain and submit the above required documentation. It may take up to 10 business days after receipt of above items to prepare checks.
Program Disclaimer: NeighborWorks Home Partners maintain the right to at any time to change or discontinue the Metro Home Improvement Loan. The potential changes may impact the maximum/minimum loan amount, loan term, interest rate, and/or qualifications for borrower, property and improvement eligibility.
