Shoreview City Council approves revised home loan program

At its June 18 meeting, the Shoreview City Council unanimously approved a revision to an existing home loan program aimed at incentivizing home ownership in Shoreview by increasing home improvement loan options and expanding the program to offer down payment assistance. 

The program is funded through the existing home loan program fund, which is replenished by loan repayments as well as by funds from the tax increment financing Scandia Shores district.

Shoreview started the original home loan program in 2010 in the wake of the housing crisis, a time in which “a number of properties in the city had mortgages that were underwater” and it was difficult to get financing for home improvement, said City Planner Kathleen Castle. 

The first program was a “last chance mechanism for people who needed financing” for energy-related home improvement projects, but barred loans for home additions or interior remodeling, said Castle. The program update the city council approved now permits those “two important reinvestment techniques residents use for housing situations,” she said, as well as energy-related improvements, and any interior or exterior repairs needed.

The loan amount was increased from $20,000 to $25,000. “If you’ve ever endeavored into a home improvement project, you know that sometimes $20,000 doesn’t take you all that far,” said Castle. 

She said “a number of homes should qualify within the community,” and that the maximum eligible home value would be just over $347,000.

The loan term was extended from 10 to 15 years and and interest — the rate of which Castle placed at 2 percent above prime — is forgiven provided the borrower stays within the home over a 10-year period.


Attracting new buyers

In addition to the beefed-up home improvement loan program, the city also approved expanding loan options to include down payment assistance targeted at first-time homebuyers, and the option of taking out a combo purchase/rehab loan as incentive for buying a fixer-upper. 

Castle said it’s no secret that it’s difficult for first-time buyers to purchase a home in the current market, adding it’s “definitely difficult” to find a house in Shoreview that fits the guidelines of most first-time buyers. 

The maximum down payment assistance loan amount is $15,000 or five percent of the purchase price, whichever is less. The maximum purchase price is $289,800, which is the current median home value in Shoreview, and the loan term is 30 years, said Castle. 

The combo purchase/rehab program was devised to encourage first-time home buyers to consider a home that needs improvement in Shoreview. 

Castle said that because of Shoreview’s aging housing stock, younger home buyers skip the city and head further north because there they can find newer, more updated homes. The most allowed for the combined loan is $30,000.

All programs are geared towards owner-occupied homes. If a homeowner is renting a house out to people, “none of these programs would be for you,” said Castle. 

Mayor Sandy Martin asked about replenishing the existing fund for the program. City Manager Terry Schwerm said loan repayments would go into the fund. 

Council member Emy Johnson said the Economic Development Authority, which recommended the program revision and expansion, has “talked about and talked about and talked about and talked about” the program over the course of the last two years. She said she hopes the council will have to go back and find more funding because that means that residents are investing in the housing stock and attracting families who are going to be filling homes, calling it “a great problem to have.”

Echoing her acknowledgement and appreciation for the work put into updating the program, council member Sue Denkinger said the city looked at what other cities were doing with their home loan programs. 

“We’ve been doing a lot of research on this for a long time,” said Denkinger, adding she thinks the loan limits are a nice “safeguard.”


– Solomon Gustavo can be reached at or 651-748-7815

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