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.
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.
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
Maximum loan based on per unit maximums and loan-to-value as noted above
Debt Service Coverage
Minimum of 1.15 to 1
30 year fixed rate
Escrows for property taxes and hazard insurance, reserve for replacement
Determined by market at the time of bond sale
Management, builder and developer fees are limited
Total of 1% of mortgage loan amount, including origination fees
Mortgage Insurance Premium