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MONTANA BOARD OF HOUSING
AMENDED TERMS AND CONDITIONS OF THE
RURAL HOUSING LOAN LEVERAGING PROGRAM
March 17, 2003
(revised September 27, 2007)
(1) Each Mortgage Loan shall be divided in two with 10% to 50% in a non-insured first mortgage which Montana Board of Housing(MBOH) will purchase, and 50% to 90% in a second mortgage funded by Rural Development (RD) under their 502 program.
(2) The fixed rate of interest on the first uninsured mortgage loan shall be 5.5% per annum (rate is subject to change at Boards discretion).
*(all income is of the area median income)
| Borrower Income | RD Rate | MBOH |
| Between 50.01-55% | 2% | 5.5% |
| Between 55.01-60% | 3% | 5.5% |
| Between 601.01-65% | 4% | 5.5% |
| Between 65.01-70% | 5% | 5.5% |
| Between 70.01-75% | 6% | 5.5% |
| Between 75.01-80% | 6.5% | 5.5% |
| Exceeds 80% | not eligible | not eligible |
The lending institutions will qualify the borrower on the lowest possible share of the RD loan, based on the 29% Housing Expense Ratio.
(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 the FHA First Mortgage Loan. The servicing fee factor is .068181.
(5) The total of the first and second mortgage loans cannot exceed the appraised value of property. 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 30% of the loan.
(6) The mortgagor shall either be a first-time homebuyer (not have owned a principal residence at any time during the three year period preceding the date of execution of the Mortgage Loan), be located in a targeted area; be a displaced homemaker who owned a home with a spouse; or a single parent.
(7) The following areas are currently designated by the Board as Targeted Areas:
| Blaine County | Hill County |
| City of Great Falls | Mineral County |
| Choteau Co-Census Track 9401 | Missoula County |
| Daniel Co-Census Track 9402 | Sanders County |
| Deer Lodge County | Sheridan Co-Census Tract 9402 |
| Flathead County | Silver Bow County |
| Billings Census Tract 3 |
(8) 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.
(9) Refinancing of existing Mortgage Loans are not eligible for purchase by the Board. Refinancing of construction period loans or other interim financing which have a term of 24 months or less are not considered refinancing of existing Mortgage Loans.
(10) Recapture tax provisions may apply (MBOH recapture tax
reimbursement policy is in place).
(11) A mortgagor can be obligated on only one Montana Board of Housing loan at a time.
(12) All funds available to purchase Mortgage Loans for this program 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 Loan Application or other complete loan application used by the Mortgage Lender
(3) a copy of an executed Buy/Sell Agreement
(4) verification of Annual Family Income
(5) RDS's loan approval/obligation
(6) 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 on existing housing and 180 days to acquire Mortgage Loans for new construction. Such period may be extended upon payment of an additional one fourth of one percent (.25%) for each 30 day extension. If the Mortgage Loan is not acquired by the Board within this time period, a fee of one-quarter of one percent (0.25%) will be charged except as provided in Section 13 hereof.
(13) 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 both live in the financed Residence and to be secondarily liable on the Mortgage Loan. (Exhibit I to the Mortgage Purchase and Servicing Guide) has been provided, to aid Mortgage Lenders in determining income. The maximum family income for all mortgagors shall not exceed 80% of the area's median income.
(14) 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.
(15) If a Mortgagor cancels a reservation for a Mortgage Loan under any other program of the Board, said Mortgagor will not be allowed to participate in the Board's Rural Housing Loan Leveraging 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 (.5%) for each 30 days the loan is not delivered. To determine the accrued interest on purchase and monthly mortgage payments, multiply the number of accrual days by the outstanding principal balance, and divide by the 360 day factor 6857.142. Interest on payoffs is calculated using the 365 day factor of 6952.38.
Recapture tax provisions will not apply.
revised 9/28/07
