Home Improvement Loan Program

Program Summary

• Bloomington Home Improvement Loan program provides Bloomington owner-occupied households the ability to access funds to maintain, repair and improve their homes.

Eligible Borrower

• Bloomington owner-occupant with qualifying interest in an eligible property.
• Current on all other owner-occupied property debts (i.e. mortgage, homeowners association, etc.).
• Borrowers aged 55 and below, combined liquid assets do not exceed $150,000.
• Borrowers aged 56 and above combined liquid assets do not exceed $250,000.
• Annual gross household income at or below 80% of the area median income (AMI).
• Annual gross household income above 80% and below 100% of the area median income (AMI) and income is not adequate to cause private enterprise to provide the assistance necessary for decent, safe and sanitary housing within financial means. The Application will be reviewed by HRA staff and income calculations will be adjusted for household size. If an applicant annual gross household income is still over 80%, an applicant must include submission of at least one (1) denial letter for a repair and/or rehabilitation loan from a Minnesota Housing network lender, dated within 60 days of the Application, for an eligible property.

Eligible Property

• Single-family (attached or detached), townhome or condominium within city limits of Bloomington.
• Subject property assessed value of $500,000 or less. 
• Existing permanent structure.

Loan Amount

• Loan amount is up to $50,000.
• Additional amounts up to $10,000 for accessibility improvements.
• Combined maximum loan amount not to exceed $60,000.

Eligible Use of Loan Funds

• Permanent general improvements, including alterations, renovations or repairs upon or in connection with existing structures; correcting defects or deficiencies in the property directly affecting the safety, habitability or energy consumption of the property completed by a licensed contractor, such as:
  • Additions
    • Bedroom additions may be allowed in cases of severe overcrowding
    • Bathroom additions may be allowed in cases of inadequate indoor bathroom facilities
  • Demolition
  • Sidewalks and driveways
  • Exteriors
  • Energy Efficiency
  • Smoke and/or Carbon Monoxide Detectors
  • Appliances – dependent on specific appliance and its condition
  • Water and Sewer
  • Garages
  • Accessibility improvements
  • Lead Based Paint improvements
  • Loan funds may not be used in whole or part for refinancing or paying off existing indebtedness.

Loan Terms

• Two percent (2%) simple interest for first ten (10) years of loan term.
• No monthly payment.
• Loan is 100% repayable at the occurrence of at least one of the following:
  • End of the life of the senior mortgage; or
  • Refinance; or
  • When the borrower ceases to occupy the subject property as their primary residence; or
  • Transfer of title; or
  • At the end of the 30-year deferment period stated in the recorded Repayment Agreement.
• The Mortgage may be subordinated, at the discretion of the HRA, as part of a refinance of the primary loan. These loans are considered a “Special Mortgage” under the terms of Minnesota Statute 58.13.

Loan Security

• This loan will be separately secured by a Repayment Agreement and Mortgage.
• This loan may be secured in a subordinate lien position.
• No title insurance is required.
• No mortgagee clause is required in the owner’s hazard insurance policy.

Catastrophic Event

• In the event the Mortgage holder or the servicer, in their sole and absolute discretion, after a loss mitigation analysis, find that a catastrophic event, including, but not limited to borrower’s death or extended illness, or the extended illness of a close family member who depends primarily on the borrower for support, has occurred which substantially and permanently impairs their ability to repay the  loan and requires a sale of the property for an amount less than the existing balance on the loan, that portion of the loan that cannot be satisfied from the proceeds of such sale shall be released

Recommended Financial and/or Credit Counseling

• Financial and/or credit counseling providers:
  • Minnesota Housing - Enhanced Homeownership Capacity Providers 
  • Minnesota Homeownership Center – Advisors Network
  • Community Mediation and Restorative Services – Housing Partners

How to Apply

• To determine eligibility and fund availability interested applicants may contact HRA staff.
• Download a PDF application and return to Bloomington HRA staff HRA@BloomingtonMN.gov.

HELP (Housing and Environmental Loan Program) Loans

1. Program Summary

• Housing & Environmental Loan Program (HELP) provides Bloomington owner-occupied households the ability to access forgivable loan funds to be used for emergency repairs without completing a full-scale rehabilitation project and signing a long-term repayment agreement.

2. Program Purpose

• To provide a sufficient supply of adequate, safe, and sanitary dwellings in order to protect the health, safety, morals, and welfare of the residents of Bloomington.
• To help residents not adequately served by the marketplace.
• To be able to respond quickly to urgent owner-occupied housing concerns.

3. Eligible Borrower

• Bloomington owner-occupants of an eligible property that has a condition which threatens or imperils health and/or safety and requires immediate and urgent attention.
• Referred by City of Bloomington staff (e.g., Environmental Health, HRA, Building and Inspections, Public Health and/or other staff who conduct inspections).
• Documentation of red flagged plumbing, heating and/or electrical system dated within 30-days prior to application date.

4. Eligible Property

• Single-family (attached or detached), townhome or condominium within city limits of Bloomington that has either:
  • A “Red flagged” plumbing, heating and/or electrical system by a utility company.
  • Orders of violation and/or requirement for immediate repair of health and/or safety items by City of Bloomington.

5. Loan Amount

• Loan amount is up to $9,999.
   

6. Eligible Use of Loan Funds

• A condition requiring immediate and urgent attention, which threatens or imperils the health and/or safety of the property and its occupants, such as:
  • Emergency health and safety.
  • Public sewer and water hook-up.
  • Major structural work, where the home’s structural integrity (i.e. foundation, beams, walls and roof) is compromised and is in need of prompt repair to prevent further damage or deterioration to the home.
  • Major internal systems (i.e. plumbing, heating, water, electrical) that are in need of repair, replacement or upgrading under current code requirements.
  • Other code violations as noted by City enforcement and/or inspectors.
     

7. Loan Terms

• Zero percent interest.
• No monthly payment.
• Loan is forgiven at a rate of 1/36th over three (3) years of occupancy as primary residence by borrower.
• The mortgage may be subordinated as part of a refinance of the primary loan. These loans are considered a “Special Mortgage” under the terms of Minnesota Statutes Section 58.13.
   

8. Loan Security

• This loan will be separately secured by a short term Repayment Agreement.
• This loan may be secured in a subordinate lien position.
• No title insurance is required.
• No mortgagee clause is required in the owner’s hazard insurance policy.
   

9. Catastrophic Event

• In the event the Mortgage holder or the servicer, in their sole and absolute discretion, after a loss mitigation analysis, find that a catastrophic event, including, but not limited to borrower’s death or extended illness, or the extended illness of a close family member who depends primarily on borrower for support, has occurred which substantially and permanently impairs their ability to repay the loan and requires a sale of the property for an amount less than the existing balance on the loan, that portion of the loan that cannot be satisfied from the proceeds of such sale shall be released.
   

10. How to Apply

• Applications are processed on a first come, first served basis until funds are exhausted.
• Applicants are referred by City of Bloomington staff.
• If applicant has a “red flagged” system by a utility company, applicant may complete an application and submit to HRA staff, HRA@bloomingtonMN.gov, within 30 days of “red flagged” date.
  • HELP Loan - Red Flagged System Application
• If appropriate, HRA staff may refer an applicant to a nonprofit for assistance with repair work or other social services.