Multifamily Development in Montana

General Obligation (GO) Permanent Loan Program

The General Obligation (G.O.) Program is a source of permanent mortgage financing for affordable rental housing which meets certain low income occupancy and rent limitation requirements. The Board provides mortgage underwriting and loan management as well as financing.

The Montana Board of Housing (MBOH) obtained a General Obligation (G.O.) rating of A2 from Moodys Investors Service in April, 1997. With this rating, the Board is able to issue tax exempt bonds to finance projects that do not have mortgage insurance. These projects will typically have multiple sources of funding which have very little risk of loss in the event of loan default.

The Board will provide fixed rate mortgages for low income rental housing which meet underwriting eligibility established by the Board.

NOTE: The Risk Sharing Program guidelines will be used for underwriting projects.

Eligible Applicants 

For-profit, non-profit, and governmental entities.

Type of Program 

Permanent financing for multifamily rental property. The Board obtained a General Obligation (G.O.) rating of A2 from Moody's Investors Service April, 1997. With this rating, the Board is able to issue tax exempt bonds to finance projects that do not have mortgage insurance.

Types of Projects 

Residential rental units meeting affordability guidelines and available to the general public. New construction and acquisition with substantial rehabilitation. Must be complete living units.

Security

First Mortgage

Loan-to-Value

These projects will typically have multiple sources of funding which have very low loan to value ratios and little risk of loss in the event of loan default

Loan Amounts

Maximum loan based on per unit maximums and loan-to-value as noted above

Debt Service Coverage

Minimum of 1.15 to 1

Loan Term

30 year fixed rate

Reserve Requirements

Escrows for property taxes and hazard insurance, reserve for replacement

Loan Rate

Determined by market at the time of bond sale

Fee Limitations

Management, builder and developer fees are limited

MBOH Fees

Total of 1% of mortgage loan amount, including origination fees

Mortgage Insurance Premium

No Insurance


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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