2001 BUSINESS REVOLVING LOAN PROGRAM GUIDELINES
The Business Revolving Loan Program was developed by the Sheridan Neighborhood Organization (SNO) Business Committee with the hope of maintaining and/or improving the exterior of businesses located in the Sheridan Neighborhood.
Loan Pool: For 2001, there will be approximately $100,000 available to business owners for low-interest improvement loans.
Program Overview: The Program will provide zero interest loans for exterior improvements to business and commercial property owners in the Sheridan neighborhood.
Business Loan Amounts: The maximum loan amount is $10,000. As funds allow, property owners may have more than one loan per property, but the cumulative total of all loans may not exceed the maximum loan amount of $10,000 and must meet the "debt-to-income" ratios. Requests over $10,000 will be considered on a case by case basis and must have the approval of the Board of the Sheridan Neighborhood Organization (SNO) at a public meeting.
Interest Rate: This is a zero interest loan program. The first loan payment can be delayed up to 45 days from the closing date.
Maximum Loan Term: To insure equal access to financing, terms will not exceed ten years or one year per $1,000.
Eligible Properties: The program is open to only those properties that lie within the boundaries of the Sheridan Neighborhood. Renters applying for this loan must have an executed lease for the property being rehabilitated.
Eligible Improvements: Exterior improvements are the only improvements allowed under the program. Permits must be obtained for all work when required by City ordinance and the work needs to be performed by licensed contractors. Suggested projects include:
- Painting: Exterior
- Siding/Stucco: Repair or Replace Existing
- Railings, Gutters and Downspouts: Repair or Replace Existing
- Frontage Improvements: Windows, Awnings & Entrances
- Parking Lot: Repair or Replace or New
- Signage & Lighting
- Sidewalks, Driveways and Steps: Repair or Replace Existing
- Permanent Landscaping & Irrigation
Ineligible Improvements: Ineligible improvements include, but are not limited to; new construction, additions or expansions, recreation or luxury projects, furniture, funds for working capital, debt service or refinancing existing debts. Any questionable improvements will be referred by GMMHC to the Sheridan Neighborhood Organization for a final decision.
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 the loan.
Work by Owner: Work can be performed on a "sweat equity" basis. Loan funds can only be used for fully installed project materials and cannot be used to compensate for labor or purchase/rental of tools. GMMHC will determine if the owner has the ability to complete the work competently and within the program time requirement. Materials must be purchased and installed prior to the disbursement of the loan proceeds. Proof of purchase is required for material reimbursement (original store receipt). Under unusual circumstances, a partial advance will be provided to borrower. In either situation, a two party check will be issued payable to both the borrower and the material provider. When applicable, a signed city Inspection Department permit must be obtained by the borrower.
OTHER GENERAL CONDITIONS AND PROCEDURES:
Applications for Funding: Applications will be accepted by the HousingResource Center on a first-come, first-served until all program funds have been committed. There will be a widely published beginning date for submission.
Detailed Applications: Applications must be submitted to GMMHC before the project will be reviewed. Loan applications will include the following:
a. A completed application form provided by GMMHC, including a description of proposed work items and cost estimates;
b. A copy of the commercial property's most recent property tax statement or an executed lease;
c. Last two years Federal Income Tax Statement;
d. A signed "Owner's Acknowledgement Form" (provided by GMMHC);
e. A signed "Data Privacy Statement and Consent Form" (provided by GMMHC);
f. A minimum of two bids on any projects in excess of $5,000.00.
Rehabilitation Counseling: GMMHC construction managers will be available to selected applicants to provide advice on proposed work, assist with the bidding process and help borrowers select the successful bidder(s).
Underwriting Decision: Applicants must have an acceptable credit history. Borrowers must be current on all mortgage payments and Hennepin County property taxes. Borrowers may not have any collections, liens, judgements or bankruptcies in the past three (3) years. Borrowers must not have more than two (2) sixty (60) day late payments in the past year. GMMHC will approve or deny loans based on a credit report, income verification and other criteria. GMMHC shall inform all applicants of their credit decision in writing. GMMHC's decision is final.
Custody of Funds: Loan funds will remain in the custody of GMMHC until payment for completed work.
Contractors & Permits: Contractors must be properly licensed by the State of Minnesota or the City of Minneapolis. Permits must be obtained when required by city ordinance.
Costs: The applicant for this program will pay the loan origination fee. Loan servicing costs will be paid out of the $100,000 program funds. Borrowers will be required to pay late payment fees (at a rate of 5% of the normal, required monthly payment) and/or a $25.00 fee for processing and handling any payments returned to the loan servicer due to insufficient funds.
Additional Funds: It is the borrower's responsibility to obtain the funds necessary to finance the entire cost of the work. The borrower is responsible for any costs in excess of the loan.
Work Completion: Weather permitting, all work must be completed within 120 days of the loan closing.
Disbursement Process: Payment to the contractor (or owner) will be made after completion of the work. An inspection will be performed by GMMHC to verify the completion of the work and the City Inspections Department for permit abatement.
The following items must be received before the funds can be released:
The first four items must be provided to GMMHC to begin the preparation of the check(s). Checks will be made out to both contractor and owner. Lien waiver(s) must be provided before the funds will be released to the contractor(s).
SNO Adoption of Guidelines - August, 2001
GMMHC begins accepting Applications - September, 2001
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