Happy couple sitting on the front porch of their new home

Regular Bond Loan Program

Loans that are insured or guaranteed by the Federal Housing Administration Mortgage Insurance Program (FHA), the Veterans Administration Mortgage Guarantee Program (VA), the Rural Development Loan Guarantee (RD) or the Housing and Urban Development (HUD) 184 Native American Housing Program (HUD 184) allow for an alternative to conventional loan products that often require large down payments. The programs partner well with most down payment assistance, Montana Housing regular bond and set-aside loan programs.

 

Program Offers

  • Loan insured or guaranteed by FHA, VA, RD or HUD-184
  • 30 year, low fixed rate, fully amortized loan
  • Serviced locally by lender or Montana Housing
  • MH pays 1% of the origination fee to the lender

Borrower Eligibility

  • Must be a first time homebuyer
    • Not owned a principal residence any time in past three years
    • Homeownership requirement not applicable in targeted areas
      • Counties: Blaine, Sanders, Deer Lodge, Silver Bow, Flathead, Mineral, Missoula & Hill
      • Census Tracts: Gallatin County 6 & 11.01 and Lincoln County 2
      • City of Great Falls
  • Must be at or below annual household Income limits
    • Includes ALL people 18+ years expected to live in residence
  • Buy/Sell amount cannot exceed Purchase Price Limits

Program Requirements

  • Purchase loans only (No refinances)
  • NO cash back at closing; principal reduction only
  • Owner-occupancy required for life of loan
  • Hazard Insurance deductibles cannot exceed the greater of $1,500 or 1% of dwelling coverage
    • Except for Wind/Hail which cannot exceed the greater of $2,500 or 1%
  • IRS Recapture tax provisions apply

Property Requirements

  • Single family, “fee simple” residential property
  • Attached land of residence must maintain basic livability & not provide income source
  • Manufactured homes eligible if Post-1976, de-titled & on a permanent foundation
    •   Appearance & functionality of a stick build house
  • Condominiums & Townhomes in multiple dwelling units structure
  • New construction allowed; property & improvements must be completed prior to closing

 

Additional Useful Information:

 

Regular Bond and Setaside Program Terms and Conditions (2018)

Frequently Asked Questions

First Time Homebuyer Education

Quick Reference Guide

Whole Loan Submission Voucher Details

 

Except as outlined above, all terms, conditions, definitions and program criteria applicable to the Regular Bond Program, set out in the Mortgage Purchase and Servicing Agreement and the Terms and Conditions of the 2017 Homeownership Program .  Additional resources not linked to on this page are available by contacting Montana Housing at 406-841-2840 and asking for a Program Specialist.

Federal Housing Administration (FHA) Mortgage Insurance Program

Brief description: FHA insurance program provides mortgage insurance for homebuyers, allowing an alternative to conventional loan products that often require large down payments. FHA loans have small down payment requirements and partner well with most downpayment assistance, MBOH regular bond and set-aside loan programs.

Montana Housing Guidelines for FHA insured loan 

Borrower Eligibility Criteria:

  • Income limits
  • First-time homebuyer(s); waived for targeted areas.
  • Home must be primary residence for the life of the loan.
  • No asset limitations.

Property Criteria:

  • Single family home, townhouse, detitled manufactured home on permanent foundation or FHA-approved condo unit (Montana Housing will purchase loans on up to 25% of units in a project).
  • Purchase Price Limits
  • Limit of 15% for business use.
  • Land limited to 35% of value of property on new construction that has private water or sewer.
  • Maximum parcel size of 40 acres, with no subdivision of land possible.

Loan Criteria:

  • 30-year fixed rate loan.
  • IRS recapture potential.
  • Buy existing or build new home.
  • Hazard insurance $1,500 or 1% of dwelling coverage deductible except Wind/Hail can be $2,500 or 1%

Underwriting Criteria:

  • Per FHA guidelines.
  • Need any multi-lot/repair issues on appraisal addressed before closing.

Down payment Sources:

  • Must be FHA approved sources only-approved non-profits require at least 3.5% from borrower, local governments and a HUD-approved non-profit instrumentality of government can provide 100% financing
  • MBOH pays a portion of closing cost for the borrower.

Mortgage Insurance Information:

  • Requires FHA coverage

Veteran Administration (VA) Mortgage Guarantee Program

Brief Description: The VA guarantee program provides lending opportunities to eligible veterans. The loans have no down payment requirements and partner well with most closing cost assistance in the Montana Housing regular bond and set-aside loan programs.

Montana Housing Guidelines for Veterans Administration Guarantee Loans

Borrower Eligibility Criteria:

  • Income limits
  • First-time homebuyer(s); waived for targeted area and eligible veteran.
  • Home must be primary residence for the life of the loan.
  • No asset limitations.
  • Must be certified eligible by the VA.
  • Full guarantee only with no prior entitlements used and not restored.
  • Homebuyer education required for non-conventional borrowers, i.e., those with credit scores below 680 or front end ratio above 31% or back end ratio above 41%.

Property Criteria:

  • Single family home, townhouse, de-titled manufactured home on permanent foundation or condo unit (Montana Housing will purchase loans on up to 25% of units in a project).
  • Purchase Price Limits
  • Limit of 15% for business use.
  • Land limited to 35% of value of property on new construction that has private water or sewer.
  • Maximum parcel size of 40 acres, with no subdivision of land possible.
  • Must meet applicable building code and have infrastructure.

Loan Criteria:

  • Rates depend upon finance option.
  • 30-year fixed rate loan.
  • IRS recapture potential.
  • Buy existing or build new home.
  • Hazard insurance $1,500 or 1% of dwelling coverage deductible except Wind/Hail can be $2,500 or 1%
  • Escrow for tax and insurance.

Underwriting Criteria:

  • Per VA guidelines.
  • Need any multi-lot/repair issues on appraisal addressed before closing.

Down payment Sources:

  • Must be approved for use with VA financing.
  • Montana Housing pays a portion of the closing costs.

Mortgage Insurance Information:

  • Requires VA Certificate of Eligibility.

Rural Development (RD) Mortgage Guarantee Program

Brief Description: The RD guarantee program provides a loan guarantee for homebuyers in rural areas, allowing an alternative to conventional loan products that often require large down payments. As of January 2006, all of Montana is eligible as a rural area, with the exception of the properties lying within the city limits of Billings, Bozeman, Great Falls, Helena and Missoula. The RD-guarantee program partners well with most down payment assistance and Montana Housing regular bond and set-aside loan programs.

Montana Housing Guidelines for RD guarantee loans

Borrower Eligibility Criteria:

  • Income limits
  • First-time homebuyer(s); waived for targeted area
  • Home must be primary residence for the life of
    the loan
  • No asset limitations

Property Criteria:

  • Single family home, townhouse, de-titled manufactured home on permanent foundation or condo unit (Montana Housing will purchase loans on up to 25% of units in a project).
  • Purchase Price Limits
  • Limit of 15% for business use.
  • Land limited to 35% of value of property on new construction that has private water or sewer.
  • Maximum parcel size of 40 acres, with no subdivision of land possible.
  • Must be in rural area eligible for RD loans.
  • Manufactured home must be new, from approved dealer, on a foundation engineered both site-specific and home-specific.

Loan Criteria:

  • Rates depend upon finance option
  • 30-year fixed rate loan
  • IRS recapture potential
  • Buy existing or build new home
  • Hazard insurance deductible is the greater of $1,500 or 1% of dwelling coverage except for Wind/Hail is the greater of $2,500 or 1% of dwelling coverage; escrow for tax and insurance.

Underwriting Criteria:

  • Per RD guidelines

Down payment Sources:

  • Other sources must be approved by RD


Housing and Urban Development (HUD) 184 Native American Housing Program

Brief Description: HUD Section 184 Indian Housing Loan Guarantee Program is designed to offer homeownership, property rehabilitation, and new construction opportunities for eligible Native American individuals or families who want to own a home. Montana Housing partners with HUD, who administers the program, to provide affordable mortgage rates for HUD 184 insured loans.

Montana Housing Guidelines for HUD 184 loans

Borrower Eligibility Criteria:

  • Income limits
  • First-time homebuyer(s); waived for targeted area.
  • Home must be primary residence for the life of the loan.
  • Must be a member of a federally-recognized tribe.
  • No asset limitations.

Property Criteria:

  • Single family home, townhouse, de-titled manufactured home on permanent foundation or condo unit (Montana Housing will purchase loans on up to 25% of units in a project).
  • Purchase Price Limits
  • Limit of 15% for business use.
  • Land limited to 35% of value of property on new construction that has private water or sewer.
  • Maximum parcel size of 40 acres, with no subdivision of land possible.
  • Must meet applicable building code and have infrastructure.
  • Must have tribal approval if on lease or tribal trust lands; BIA if allotment; fee simple is allowed.

Loan Criteria:

  • 30-year fixed rate loan, with no origination or discount points charged at closing.
  • IRS recapture potential.
  • New construction or existing home.
  • Hazard insurance $1,500 or 1% of dwelling coverage deductible except Wind/Hail can be $2,500 or 1%
  • Escrow for tax and insurance.
  • Tribe must have approved legal procedures for evictions, priority of lien, leasing, and foreclosure.

Underwriting Criteria:

  • Per HUD 184 guidelines
  • LTV cannot exceed 97.75 or 98.75 of appraised value.

Down payment Sources:

  • Tribal resources or approved HUD source.
  • Montana Housing pays a portion of closing costs on behalf of borrower.

Mortgage Insurance Information:

  • Requires HUD 184 coverage.

Loan Information:

  • If done at the Set-aside rate, higher income limits are available for households of 9 or more people, and Montana Housing pays lender origination fees for the borrow.
  • If done as a regular bond loan, Montana Housing regulates points and fees that can be charged. Consult Board staff with any questions.
  • Reservations valid 60 days for existing homes or 180 days for new construction.
  • 0.25% fee charged for extensions, 0.50% for cancelation.

 

Reservation Process for HUD184:

PREFER

Input on Lender On Line web based reservation system
Fax Borrow Stat Sheet and Homebuyer Education Certificate
 

OR

Fax reservation to Montana Housing including:

  • Reservation cover sheet and required documentation listed

Special Reservation Criteria

Must submit HUD 184 approval documentation to Montana Housing before reservation can be approved.

This is a summary of the Montana Housing program only. For a complete copy of the terms and conditions see Mortgage Purchase and Servicing Guide or Terms and Conditions for Whole Loans .

 


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MONTANA HOUSING | 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