80% Combined Program

Brief description:  The 80% Combined Program was created to provide qualified home buyers with an alternative to an FHA-insured loan in areas not eligible for RD-guaranteed loans. Montana Board of Housing (MBOH) provides this program in partnership with non-profit housing partners such as NeighborWorks Montana (NWMT) or the Human Resource Development Council (HRDC).  Under this program, MBOH can provide loans at 80% or less loan-to-value (LTV), eliminating mortgage insurance.   

"How to" upload documents in Lender Online!

General Program Information:

Current interest rate

Terms and Conditions (02/16/16)

Informational Flyer  (Under Construction)

First Time Homebuyer Education

Program Loan Criteria (Under Construction)

Program FAQ’s  (Under Construction)


Reservation Documents for the 80% Combined Program must be sent to MBOH via fax or secured scan for review:

Release of Financial Information Form

Borrower Stat sheet 

Recapture Notice


Closing documents for the 80% Combined Program:

80% Combined Loan Submission Voucher (02/16/16)

Early Delinquency Counseling

Mortgagor’s Affidavit 

Seller’s Affidavit

Recapture Tax: Notice to Compute

Uniform Rider to Trust Indenture


Except as outlined above, all terms, conditions, definitions and program criteria applicable to the Regular Bond Program, set out in the Mortgage Purchase & Servicing Guide and the Terms & conditions for 2015 Programs will apply to loans originated under the MBOH 80% Combined Program. Additional resources not linked to on this page are available by contacting MBOH at 406-841-2840 and asking for a Program Specialist.

 

 

Frequently Asked Questions

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Condominiums are eligible, provided the project is an FHA-approved project. MBOH limits its investment exposure to no more than 25% of the units in any given project. Lenders should contact MBOH on a case-by-case basis to confirm eligibility.

Only double-wide homes that are 1976 or newer, have not been moved more than once and de-titled on a permanent foundation can be financed in this program. The foundation must meet FHA standards and be designed by a qualified architect or engineer for that specific home and site (not by a contractor).

Update 02/16/16 - YES.  Lenders are expected to use Lender Online whenever possible.  MBOH is developing processes whereby lenders will soon be required to use Lender Online for all transactions.  Lenders can track their files in Lender On Line.

No. The buyer’s contribution needs to come from their own resources.

The advancement of special programs in recent years has created unique challenges. To help lenders focus on individual criteria, MBOH established a separate web page and documents for each special program, rather than combine conflicting information on a single page or form. This "silo" approach provides lenders with a single location to obtain information and documents specific to a program. All information is on the MBOH website, and not locked inside secure locations. Loan officers, processors, underwriters and shipping staff should all be directed to the individual page for terms and conditions, Q&A and program-specific forms. MBOH welcomes any and all questions as they arise, so lenders can provide quality customer service to home buyers.

Lenders review applications for borrower, property and program eligibility, and submit requests to NeighborWorks Montana (NWMT) for funding commitments for the down payment portion of the transaction. At this same time, lenders are allowed to submit requests to MBOH for pipeline purposes only, and to preserve the rate. Upon approval by NWMT, lenders will submit all remaining documents required by MBOH (such as NWMT approval and final appraisal), before receiving a commitment of funds for the transaction. This pipeline will be closely monitored in Lender Online.

The program guidelines require a minimum of 1% of the purchase price, or $1,000. However, the maximum LTV is 105%. In some cases, buyers will need to contribute more than $1,000. Loan officers will provide details as each transaction is evaluated.

Whenever multiple programs are used, the most restrictive criteria will apply. Montana Board Of Housing (MBOH) and NeighborWorks Montana (NWMT) do share common missions; however, funding sources and other program elements can create conflicting criteria such as different income limits. Lenders are encouraged to communicate with both MBOH and NWMT to overcome challenges.

All properties must meet all FHA appraisal standards. Lenders must submit a comprehensive interior/exterior appraisal prior to approval. Any repair requirements must be addressed as part of the transaction.

The interest rate on the first mortgage is set by MBOH and posted to the MBOH website on a bi-weekly basis (subject to change at MBOH discretion). The interest rate on the amortizing NWMT second mortgage will be 2% higher than the first mortgage loan.

MBOH requires an extended coverage policy of title insurance with appropriate endorsements. If the property is a manufactured home, Endorsement 107 is also required.

The program was developed to provide eligible home buyers an alternative to the current high cost of an FHA loan. This is a unique program that combines a mortgage from the Montana Board of Housing (MBOH) for 80% of the purchase price of a home, and an amortizing down payment assistance loan from NeighborWorks Montana (NWMT) for the other 20%. Originating lenders can keep or sell the first mortgage according to their individual business models. MBOH serves as one option for those lenders wishing to sell the first-position loan into the secondary market. This funding model allows MBOH the ability to provide an uninsured conventional loan in limited circumstances.

MBOH purchases these loans at par, and does not provide lender compensation. Lenders are allowed to charge fees and points up to 2% of the amount of the first mortgage. Lenders who service MBOH loans will receive 0.375% servicing fees. Lenders who have elected to have MBOH service their loans will receive 0.75 bps service-release fee.

Originating lenders underwrite the first mortgage according to Fannie Mae Standard 97% Program with a Community Second through DU. The principal and interest payments of both loans must be included in the ratios. MBOH will NOT accept loans that have "Refer with Caution" findings. The second mortgage will be fully underwritten by NeighborWorks Montana (NWMT), using credit overlay described in their Terms & Conditions, which includes ratios of 29/41 and minimum credit score of 640.

The first mortgage loan will either be serviced by the originating lender, or by MBOH, based on existing contracts with each entity. The second loan is serviced by NeighborWorks Montana.

NeighborWorks Montana (NWMT) developed this program in partnership with lenders that provide capital for the down payment assistance element of the program. Lenders that are approved by both NWMT and MBOH have the option to deliver the first-position loan to MBOH or their other secondary markets, or keep the loan in-house. Lenders who are only approved by NWMT either keep the first-position loan or sell it to their other secondary markets.


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HOUSING DIVISION | MONTANA DEPARTMENT OF COMMERCE
301 S. PARK AVE, STE 240 | PO BOX 200528 | HELENA, MT 59620-0528 | P: (406) 841-2840 | F: (406) 841-2841 | TDD: (406) 841-2702 | TOLL FREE: (800) 761-6264