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Draft Exhibit B-11 General Program Conditions 1. Application Processing: Applications will be processed on a first-come, first-served basis. Borrowers must provide a completed application (including proof of income) and property tax statement when requested by CEE and ultimately 1 bid prior to the time of loan closing. 2. Eligible Projects: Use of funds is limited to the eligible improvements allowable under Minnesota Housing Finance Agency's Fix-up Fund Loan program. CEE will refer to the City whenever eligibility of an improvement is uncertain. Funds must first be used to abate any outstanding orders from the City's Inspections Department. 3. Ineligible Projects: Funds may not be used for the following projects: Recreational items, refinancing existing indebtedness, labor costs of borrowers, residents, or unlicensed contractors,personal property items, repairs to property used for business or trade purposes. 4. Underwriting Decision: Applicants must have acceptable credit history: Standard and prudent underwriting criteria will apply. Borrowers who have had a bankruptcy in the last two years (without reasonable explanation) will be denied. Property owners must be current on all mortgage payments and property taxes. CEE will approve or deny loans based on a credit report, income verification and other criteria as outlined above. 5. Work by Owner: Work can be performed on a"sweat equity"basis. Loan funds cannot be used to compensate for labor, only for materials. CEE 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. 6. Work Completion: Weather permitting; all work must be completed within 120 days of loan closing. CEE may extend this timeline at CEE's discretion. 7. 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 bill exceeds the original loan amount, the borrower must obtain the additional funds. One option would be to originate an additional City funded loan. This approval is contingent on: availability of funds; borrower's ability to qualify for the larger loan amount; and per the property maximum. 8. Contractors/Permits: Except when labor is to be provided by borrower, the borrower must provide a minimum of 1 bid from properly licensed contractors. All contractors must be licensed, bonded, and insured as required. Permits must be obtained when required by city ordinance. 9. Custody of Funds: Loan funds will remain in the custody of the City until payment for completed work. City of New Brighton Home Improvement Program Page B-5 Center for Energy and Environment 6/2011