Teachers' Program

Teachers' Program, Ravalli County

Brief Description: The Teachers Program in Ravalli County is a special program initiated by Farmers State Bank in Victor. This program is targeted to full-time teachers in Ravalli County whose incomes qualify at 80% of median or below. The program combines a lower interest first mortgage loan from MBOH with a second mortgage loan from Farmers State Bank. A prospective borrower would locate an eligible home, and then qualify for a first mortgage loan. The second mortgage loan fills the gap between the amount the borrower qualifies for, and the purchase cost of the home. For example, if the borrower locates a home for $180,000, and qualifies for a loan of $120,000, the second mortgage is for $60,000. What makes this program work is that the second mortgage has no monthly payments, but rather is a shared appreciation mortgage. When the home is sold or refinanced, the borrower pays back the percent of increased value in the home attributable to the share the second mortgage contributed to the purchase, in this case $60,000/$180,000 or 33%.

Borrower Eligibility Criteria:
Homebuyer Education required, including commitment to early delinquency counseling
Income limits of 80% of median county income for household size http://www.rurdev.usda.gov/mt/RHS/rhs.htm (on left hand column half way down income limits pdf)
First-time homebuyer(s)
Home must be primary residence for the life of the loan
No asset limitations
Must be a full-time teacher in a Ravalli County school.

Property Criteria:
Single Family home, townhouse, condo, or post 1976 detitled manufactured home
Purchase Price Limit of $237,031
Limit of 15% use for Business
Land limited to 35% of value of property
Maximum parcel size of 40 acres, with no subdivision of land possible

Loan Criteria for First Mortgage Loan:
MBOH loan limit of $200,160
Current set-aside rate (currently 5.5%)
30-year fixed rate loan, with no origination or discount points charged at closing
Buy or build
Hazard insurance $1,000 deductible all peril; escrow for tax and insurance

Underwriting Criteria:
Per Farmers' State Bank

Down payment Sources:
Must be approved by Farmers' State Bank

Mortgage Insurance Information:
Must be insured by RD

Lender Reservation Process:
Through Farmers' State Bank, must reserve both first and second mortgage amount

updated 9/27/2007

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