Are non-occupant co-borrowers allowed in Montana Housing programs?
No. All parties who appear on title to the property must meet all qualifying criteria of the Montana Hosing Loan Programs, which includes occupancy, prior ownership limitations and income limits.
Will Montana Housing accept loans with "co-signers"?
For Montana Housing programs, a co-signer must be a non-occupant co-signor and will not be on title to the residence. The co-signor will be allowed for credit purposes only, meaning the occupying borrower has the income to qualify per the insurer’s DTI requirements, but does not have adequate credit to qualify. Non-occupying co-borrower not permitted. Co-signers are not allowed in the VHLP Program.
Can a borrower utilize multiple down-payment programs to purchase a home?
Yes, provided they meet criteria established by each program and they contribute the minimum amount of funds required to the transaction. A Bond Advantage DPA loan and a MBOH Plus 0% Deferred DPA loan must be a second-position lien on the property. Additional requirements will apply if other DPA programs include amortizing loans. For instance, payments for all amortizing loans must be included in calculations while underwriting the first mortgage, to prevent a homeowner from being placed in an unsustainable mortgage.
Why can Montana Housing provide the 3.5% down payment on an FHA loan, when other organizations can’t?
Montana Housing is a designated "Instrumentality of Government," and as such, is authorized to provide this assistance statewide.Some other organizations also have this same designation, but only within their governmental jurisdiction. Loan originators work closely with local organizations to provide prospective home buyers with all available financing options.
Will lenders interim-service Montana Housing loans they have originated, pending purchase of the loan by Montana Housing?
No. If Montana Housing is selected by the lender to be the servicer of any program loans they have originated the loans, the servicing will transfer to Montana Housing at closing and the first payment and all subsequent payments will be posted by Montana Housing servicing department, regardless of when the loan is actually purchased. The loan will then be purchased at the original loan amount.
Are there limits to the amount of land that can be purchased with Montana Housing funds?
The Montana Small Tract Financing Act is followed and limits land purchases to 40 acres. Montana Housing also has limits. If the loan is for new construction and on private sewer and septic systems, the value of the land cannot be more than 35% of the total appraised value. Also, if the land purchased can be subdivided or has an extra lot not encumbered by the house or garage being purchased, these programs cannot be used. These situations can be reviewed on a case-by-case basis
Can Montana Housing loans be assumed?
Yes. The new buyer must meet the same Montana Housing requirements that the current owner did (i.e. income, first time homebuyer, etc.), as well as the requirements of the mortgage insurer or guaranture (FHA,VA, RD, HUD 184).
How do borrowers apply for Montana Housing funding?
Borrowers must work with with a approved Montana Housing participating lender to apply for a Montana Housing loan. Lenders conduct the credit analysis and qualify the borrower and property for Montana Housing programs. The lender closes the loan and Montana Housing purchases the loan from the lender once all required documents are received. Montana Housing or a local lender services the loan.
If the borrower has to move due to hardship (i.e. employment transfer), are there any options available regarding their Montana Housing funded home?
Yes, the borrower can apply for an “Occupancy Waiver.” This allows the borrower to have the home vacant while trying to sell or rent it for a six month period. At the end of six months, a new waiver must be requested. If the home has been rented for over 12 months, there can be tax consequences. Military occupancy waivers are given for 12 month periods at a time.
What are Montana Housing rates and will they change?
Rates follow the market and depend on the rates at which we can sell our tax exempt bonds. Current rates can be found here. Rates are set on a fixed, 30 year term and will not change during the life of your loan. No penalty for pre-payment exists.
Who's income gets counted toward the established income limits?
Typically, anyone 18 years and older living in the household will have his/her income counted. This includes wages, over time, bonuses, commissions and raises. Also included in the income calculations will be any social security income, pension income, VA benefits, or child support income received. Contact a staff member upfront with any specific concerns or questions regarding income calculations.
Are condos eligible in Montana Housing programs?
Yes. Condominiums are eligible Montana Housing programs, but not in the VHLP program. The condo project must be an FHA-approved project and no more than 25% of the condos in a project can be currently financed by Montana Housing. Additional insurance requirements may apply.
Will Montana Housing purchase loans for manufactured home loans (including single-wides)?
Yes, manufactured homes are eligible in Montana Housing programs; however, only homes that are 1976 or newer, are de-titled and are on a permanent foundation. 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). Beyond these requirements, Montana Housing follows the requirements of the provider of mortgage insurance or guarantee. Single-wide trailers are not allowed in the VHLP program.
Can lenders use Montana Housing Down Payment Assistance loans with a purchase-money mortgage being sold into other markets?
No. Montana Housing Down Payment Assistance loans can only be used in connection with a purchase-money mortgages sold to Montana Housing under the Regular Bond Program.
Can I use a Mortgage Credit Certificate (MCC) along with a loan funded by Montana Housing?
No, an MCC can be attached to any loan statewide except for a loan financed through a Montana Housing program - otherwise the IRS sees this as "double dipping" into tax exempt sponsored program funding. An MCC can be issued with a VHLP loan.
Are all borrowers required to take homebuyer education?
Yes. Each borrower in the Montana Housing programs who do not qualify for an exception are required to take an approved home buyer education class. Approved classes can be located at the Neighborworks Montana website.