Board of Housing~

Homeownership Program

TERMS AND CONDITIONS
City of Kalispell II Program
$800,000 @ 5.00% (rate subject to change at Board's discretion) Of Mortgage Funds
September, 2003

1. The acquisition cost of a Residence being financed by a Mortgage Loan shall include cost of completing the residence and unpaid SID assessments and must not exceed the current MBOH Purchase Price limits.

Land purchased with the residence shall not exceed the acreage limitation of the Small Tract Financing Act and the value of the land is not to exceed 35% of the loan. Buyer and seller to pay their usual and reasonable settlement and financing costs.

2. The Annual Family Income from all sources not to exceed 80% of the area median household income as adjusted annually and for household size for a mortgage rate of 5.00% (rate subject to change at Board's discretion).

3. Homebuyer to not have owned a home in the past three years; Exceptions to this definition may occur when:

  • An applicant who is recently divorced or legally seperated and the other partner now owns the home.
  • A dwelling unit which is not in compliance with state, local or adopted building codes and cannot be brought into compliance with such codes for less than the cost of constructing or purchasing a permanent code complying structure.
  • An applicant who has had to move more than thirty miles to gain permanent employment.
  • A home is occupied by a disabled adult or child and the unit cannot be adapted readily to their specific needs nor within a reasonable cost.

4. Property to be owner-occupied within 60 days of loan closing and be maintained as the mortgagor's principal residence while any portion of the mortgage loan remains outstanding. Waivers to the principal residence requirement may be obtained from the Board in circumstances which may cause an undue hardship on the mortgagor.

5. Assumptions of the loans are not permitted.

6. Reservations for mortgage funds must include written certification from the Glacier Bank or the Northwest Human Resource Council that the borrowers have been screened to be eligible to participate in the program.

7. Federal Recapture Tax Provisions will not apply. However, an equity participation agreement is required by Glacier Affordable Housing Foundation.

8. First Mortgage Loan Terms:

a. Each Mortgage Loan shall be insured by FHA under Section 203(b) or 203(k) of the National Housing Act, guaranteed by RHS under Title V of the Housing Act of 1949 or guaranteed by the VA under Section 810, Chapter 37 of Title 38, U.S. Code.

b. The fixed rate of interest on the Mortgage Loans shall be 5.00% (rate subject to change at Board's discretion) if income is less than 80% of Area Median Income.

c. The term of the Mortgage Loans shall be 30 years and such Mortgage Loans shall provide for complete amortization by maturity with equal monthly payments of principal and interest. Each mortgage loan shall provide for monthly escrow payments in an amount sufficient to enable the servicer to pay when due, all real property taxes and assessments, hazard and casualty insurance premiums and mortgage insurance premiums.

d. The Servicer may deduct a monthly servicing fee at the annual rate of three-hundred-seventy-five thousandths of one percent (.375%) of the outstanding principal balance of Mortgage Loans subject to the provisions of the Mortgage Purchase and Servicing Guide.

e. Fee Structure:

  • 1.0% origination fee - payable by MBOH.
  • Up to 1.0% Discount fee - payable by MBOH.

9. The Residence to be financed shall be occupied as the mortgagor's principal residence, and no more than 15% of the total area of the residence may be used in a trade or business.

10. The program will expire on March 31, 2005.

RESERVATION AND PURCHASE PROCEDURE

(A)Mortgage Lenders may reserve funds in this setaside on a loan-by-loan, first-come, first-serve basis. An eligible Mortgage Lender desiring to reserve funds must submit (1) The Mortgage Reservation/Confirmation Report (BOH Form 99); (2) A copy of an executed FHA Loan Application; (3) A copy of an executed Buy/Sell Agreement; (4) Verification of Annual Family Income; (5) Letter from either The City of Kalispell, Northwest Human Resource Council or the Glacier Bank that the borrowers have been screened to be eligible to participate in the program, (6) Signed copy of Release of Financial Information Form.

(B)The Board will purchase Mortgage Loans at up to one hundred two percent (102%) of the face amount of the Mortgage Loan.

(C)Mortgage Loans shall be tendered for sale to the Board within 45 days following execution of the note by the mortgagor. If the Mortgage Lender fails to deliver such loans within 45 days after origination, the purchase price will be reduced by one-half of one percent (.5%) for each 30 days the loan is not delivered. To determine the accrued interest for purchase or payoff, multiply the number of accrual days by the outstanding principal balance, and divide by the 365 day factor 7300 for 5.00%. Interest on monthly mortgage payments is calculated using the 360 day factor of 7200 for 5.00%. The Servicer may deduct a monthly servicing fee at the annual rate of three-hundred-seventy-five thousandths of one percent (.375%) of the outstanding principal balance of the Mortgage Loan. The servicing fee factor is .075 for 5.00%. The monthly remittances and payoffs can be wired to:

DIRECT WIRING:

Wells Fargo Bank West, N.A.
ABA #102000076
For Deposit to CK ACCT #196897979
Credit: Montana Board of Housing
Servicer (3 digit #) ____________

If remitting for multiple issues, send one wire for the total remittance to minimize your cost. Please use

ACH SYSTEM:

Wells Fargo Bank West, N.A.
ABA #102000076
CK ACCT #196897979
CR ACCT: MT BD OF HSG
Servicer (3 digit #) __________

Send only one ACH remittance (all series combined) for each remittance made during the month. You must complete the MBOH ACH Remittance Detail fax form listing the individual remittances for each series (even if remitting only one series). Fax the form to both Wells Fargo Bank West, N.A. and to the Montana Board of Housing.