Habitat for Humanity Program

Habitat for Humanity

Brief Description: MBOH works with Habitat for Humanity in chapters across the state to provide interest-free first mortgages for Habitat homeowners who credit-qualify for a loan. By providing financing for these mortgages, MBOH allows Habitat to receive the cash value of the loan when the family moves in, providing resources to purchase land and materials for another family.

Borrower Eligibility Criteria:
Income limits according to Habitat criteria
First-time homebuyer; can be waived for targeted area depending upon Habitat criteria
Home must be primary residence as long as the loan remains in place
No asset limitations
Must be Habitat-partner homebuyer

Property Criteria:
Purchase Price Limit of $237,031
Limit of 15% use of the property for business
Land limited to 35% of value of appraised value, 40-acre limit, with no subdivision or sale of land possible
Prefer property to meet FHA criteria for FHA insurance

Loan Criteria:
Maximum Loan Amount of $237,031
0.375% interest rate, 30-year term
Hazard insurance $1000 deductible all peril
No lender fees allowed. Purchase at 100%
120-day loan reservation limit for existing home, 180 for new construction
Taxes and insurance must be held in escrow

Underwriting Criteria:
Underwrite to FHA or RD standards if eligible, if not then use Fannie Mae/Freddie Mac standards
Form 1004 appraisal required if not FHA-approved

Down payment Sources:
Habitat takes second mortgage on the amount of the value of the home beyond what the borrower can qualify to borrow

Mortgage Insurance Information:
Ideally the property is inspected and approved for FHA or RD mortgage insurance during construction. If not, and other mortgage insurance can not be found, loan is uninsured

Lender Reservation Process:

Fax reservation to MBOH including:
Reservation cover sheet and required documentation listed

Special Reservation Criteria:
Loan reservation is not automatic - must submit confirmation letter from Habitat Chapter for review by MBOH prior to reservation approval. See Exceptions on Lender on Line to check status.

updated 6/08/2007

This is a summary of the MBOH program only. For a complete copy of the terms and conditions see Mortgage Purchase and Servicing Guide and the Terms and Conditions of the set-aside