Board of Housing ~ Homownership Program

TERMS AND CONDITIONS OF THE
Greater Helena Area Affordable Home Ownership Program
GR8 HOPe PHASE III

June 1, 2006

(1) Each Mortgage Loan shall be either insured by FHA under Section 203(b) of the National Housing Act, guaranteed by RD 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.

(2) The fixed rate of interest on the Mortgage Loans shall be 5.50% per annum (rate subject to change at Board's discretion). Families are required to have a minimum of $1,500 personal down payment funds on RD guaranteed loans.

(3) The term of the Mortgage Loans shall be 30 years and such Mortgage Loans shall provide for complete amortization by maturity by equal monthly payments of principal and interest.

(4) 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 Loan. The servicing fee factor is .06818 for 5.50% loans.

(5) The acquisition cost of a Residence being financed by a Mortgage Loan shall not exceed $170,500 for a family of 3 or more and $155,000 for a family of 2 or less.

(6) The mortgagor shall be a first-time homebuyer following the HUD-accepted definition. A first-time homebuyer is an individual who meets any one of the following criteria:

° An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).

° A single parent who has only owned with a former spouse while married.

° An individual who is a displaced homemaker and has only owned with a spouse.

° An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.

° An individual who has only owned a property that was not in compliance with State, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.

(7) 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 trade or business.

(8) Refinancings of existing Mortgage Loans are not eligible for purchase by the Board. Refinancings of construction period loans or other interim financings which have a term of 24 months or less are not considered refinancings of existing Mortgage Loans.

(9) Federal MBOH recapture tax provisions may apply but reimbursement policy by MBOH is in place.

(10) A mortgagor can be obligated on only one Montana Board of Housing loan at a time.

(11) All bond proceeds available to purchase Mortgage Loans will be placed in a pool. Mortgage Lenders may reserve funds in this pool on a loan by loan, first come, first served basis. An eligible Mortgage Lender desiring to reserve funds must submit:

(1) the Mortgage Loan Reservation/Confirmation Report (BOH Form 99).

(2) a copy of an executed FHA/RD/VA Loan Application or other complete loan application used by the Mortgage Lender.

(3) verification of Annual Family Income.

(4) a copy of an executed Buy/Sell Agreement.

(5)Signed Release Of Financial Information form.

(6) A letter from the Rocky Mountain Development Council certifying that the borrowers have been screened to be eligible to participate in the program.

(7) A signed "Early Delinquency Counseling Form" Upon receipt of such documents and funds, the Board may reserve bond proceeds for 120 days to acquire Mortgage Loans. Such period may be extended upon payment of an additional one fourth of one percent (0.25%) for each 30 day extension, which shall only be paid by the Mortgage Lender. If the Mortgage Loan is not acquired by the Board within this time period, a cancellation fee of one-fourth of one percent (0.25%) will be imposed except as provided in Section 14 hereof.

(12) For purposes of applying the federal income requirements, the "Actual Gross Annual Income" of a mortgagor is the mortgagor's annualized gross income. Annualized gross income includes any and all income of the mortgagors and any other person who is expected to live in the financed Residence. The maximum family income for all mortgagors and residents is 80% of median income for the area and based on family size.

(13) The Board will purchase Mortgage Loans at up to one hundred two percent (102%) of the face amount of the Mortgage Loan. The Mortgage Lender may not charge an origination or discount fee to the borrower.

(14) The Board reserves the right to charge a cancellation fee. The one-fourth of one percent (0.25%) cancellation fee will not be charged in the case of the property not supporting the loan application. Mortgage Lenders need to qualify mortgagors before submitting a reservation request to avoid paying the cancellation fee.

(15) If a Mortgagor cancels a commitment or reservation for a Mortgage Loan under any other program of the Board, said Mortgagor will not be allowed to participate in the Board's Helena Affordable Housing Program.

(16) 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 (0.5%) for each 30 days the loan is not delivered. To determine the accrued interest for purchase and interest on monthly mortgage payments, multiply the number of accrual days by the outstanding principal balance, and divide by the 360 day factor 6545.45. To determine the accrued interest for payoff, multiply the number of accrual days by the outstanding principal balance, and divide by the 365 day factor 6636.36. The set aside code is 405. The monthly remittances and payoffs can be wired or ACHed to:

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

Send only one wire (all series combined) for each remittance made during the month. You must complete the MBOH Remittance Detail Fax form listing the individual remittance amounts for each series (even if remitting only one series). Fax the form to both Wells Fargo and to the Montana Board of Housing. See the Remittance Detail Fax form for the appropriate fax numbers.

ACH: Wells Fargo Bank West, N.A.
ABA#102000076
CK ACCT #196897979
CR ACCT: MT BD OF HSG (Position 55-76; 22 characters)
Servicer (3 digit #)________ (Position 40-54; 15 characters)

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

(17) Mortgage Lenders will be required to provide the Board with information regarding Mortgage Loans when requested by the Board to comply with the requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

(18) The Program will expire December 31, 2007.

revised 7/12/06

REMITTANCE DETAIL FAX
Use For Wells Fargo Corporate trust
WIRE ACH (please check one)
DO NOT COMBINE WIRE AND ACH REMITTANCES
Fax to:

Jamie Watson, Wells Fargo Bank West

For Montana Board of Housing Mortgage Payments & Payoff Remittances
Fax: 303-863-5645 Phone: 303-863-6425
Fax to:

Becky Johnson, Montana Board of Housing
Fax: 406-841-2841 Phone: 406-841-2860
Date Remittance Sent:
From: Servicer Name:
Servicer 3-digit #_________________________
Servicer Phone #_________________________
Total Remittance:________________________
(please complete all information)
Series Wells Fargo # Mortgage pmt
Remittance		 Payoff
Remittance		 Payoff Name
006
13624200
$ $
009
13624300
$ $
010
13624400
$ $
011
13624500
$ $
012
13624600
$ $
021
13624800
$ $
022
13624900
$ $
023
13625000
$ $
024
13625100
$ $
025
13625200
$ $
026
13625300
$ $
027
13625400
$ $
028
13625500
$ $
051
13624700
$ $
060
13324215
$ $
061
13324230
$ $
062
13324240
$ $
063
13324260
$ $

NOTE:
This EXCEL form is available from the Board via e-mail or on disk.
If you re-create this form, please do not change the format. Thank you.