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X. FINANCIAL GUIDELINES <br /> <br />A. Applicants shall demonstrate a ratio of net operating income (NOI) to debt service of <br />1.1:1. NOI = Gross property income less operating expenses and real estate taxes, but <br />not including mortgage payments, income tax depreciation or non-operating <br />expenses. <br />B. Participating financial institutions shall use customary lending practices in <br />determining eligibility for RLGP loans so as to ensure repayment of principal. <br />C. The property shall not be delinquent in the payment of property taxes and special <br />assessments, and shall not become delinquent during the term of the loan. If taxes <br />shall become delinquent, the loan may be called at the option of the financial <br />institution if the delinquency is not remedied in a reasonable time frame. <br />D. The structure shall be fully insured during the term of the loan with the lending <br />institution and City named as mortgagor or covered under a loss payee clause <br />endorsement. <br />E. No loan shall exceed 80 percent of the estimated market value of the property to be <br />rehabilitated upon completion of the rehabilitation, less the principal balance of any <br />prior mortgage existing on the property at the time the loan is made; as required by <br />MSA 469.184, Subd. 4(3). <br />F. All out-of-pocket loan application expenses shall be the responsibility of the <br />applicant. No other fees shall be charged. <br /> <br />XI. ANNUAL REPORTING <br /> <br />Within 90 days of filing federal tax statements, businessproperty owner(s) es receiving loans <br />shall annually submit to the lending institution the following three items: <br /> <br />A. Proof of non-delinquency of property tax payments; <br />B. Profit/loss statement from Schedule C of federal tax statements; and <br />C. Personal financial statement satisfactory to the lender. <br /> <br />Participating lending institutions shall annually report to the EDA by March 1 of each year the <br />status of the RLGP loan. The annual report shall include the status and balance of each loan as <br />of December 31 of the previous year. <br /> <br />XII. LOAN DISBURSEMENTS <br /> <br />Loan funds shall be released by the financial institution, but not before written approval from the <br />EDA is provided, and an RLGP check is issued. A minimum of 10 percent of the total loan will <br />be retained until all work is completed, inspected, and approved, as evidenced by current <br />certificate of completion. <br /> <br />XIII. IMPROVEMENTS COMPLETED PRIOR TO LOAN CLOSING <br /> <br />Such improvements are not eligible unless the applicantÓs structure requires immediate attention <br />(hazardous code deficiencies, etc.) and the following steps are taken: <br /> <br />7 <br /> <br />