Program Updates for Lenders
Recent Montana Housing updates and program announcement memos for lenders are archived below.
August 18, 2023 MBOH Rate Increase & Program Update Memo
I’m sure it’s no surprise that we need to increase rates again. Trying to keep it as painless as possible with just another small increase of 1/8%.
Effective at Noon, August 18, 2023, the Regular Bond Program interest rate will increase to 5.75%. The rate for the down payment assistance programs (MBOH Plus and Bond Advantage) will be 6.00%, and the Set-aside rate will be adjusted to 5.50%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
A reminder that income limits are strictly enforced and if your borrowers are even close to the max, please contact MT Housing staff to have the VOEs and all sources of income reviewed.
We’ve had some loan files submitted where the borrower has taken a homebuyer ed (HBE) class named HomeView through FNMA. This class has not been approved and is not accepted as the HBE requirement by Montana Housing at this time. Please continue to work with NeighborWorks and your local approved HBE providers to fulfill that need.
Remember that Julie Hope is available to provide in person or on-line training for all new staff that will be working with the MBOH products or as a refresher for those needing it.
Thank you for your continued partnership. Staff is so pleased that we’re able to reach more and more Montana Homebuyers with your help! We couldn’t do it without you.
August 8, 2023 MBOH Rate Increase & Program Update Memo
As you know Montana Housing financing is made available through the issuance of tax-exempt bonds. Earlier this year, we were able to secure financing at very attractive rates and thanks to your continued participation in our programs, we were able to provide $40 million dollars to first time homebuyers around the state. As we look to the market for a new bond issue, rates have increased and will no longer support a lending rate of 5.5%.
While we are trying to keep increases to a minimum, we do have to adjust our current lending rates. Effective at 5:00, August 8, 2023, the Regular Bond Program interest rate will increase to 5.625%. The rate for the down payment assistance programs (MBOH Plus and Bond Advantage) will be 5.875%, and the Set-aside rate will be adjusted to 5.375%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
A reminder that income limits are strictly enforced and if your borrowers are even close to the max, please contact MT Housing staff to have the VOEs and all sources of income reviewed.
Another program restriction being overlooked is dual kitchens and extra rooms in the home, or extra living quarters on the properties we are being asked to finance. If those areas are possible rentals, they can’t be financed with MBOH funds so we can’t purchase those loans. Please review any questionable homes with staff before reserving funds or closing loans on such homes.
Remember that Julie Hope is available to provide in person or on-line training for all new staff that will be working with the MBOH products or as a refresher for those needing it.
We hope you’re having a wonderful Summer and appreciate your help making our programs a success!
July 10, 2023 MBOH Plus Program Adjustments and Reminders
Today, July 10, 2023, our Board elected to adjust the parameters on the MBOH + Deferred DPA Program provided by Montana Housing. Starting immediately:
- Income limits will be $80,000 for a family of 1 or 2 and $90,000 for a family with 3 or more occupants.
- DTI limit has been raised to 45%.
- The amount available for the MBOH + seconds remains at 5% of sales price, maximum $15,000. This is a 0% deferred DPA loan that is due upon refinance/payoff of first loan.
- Minimum credit scores remain at 620 and homebuyer education is required.
- Borrower contribution remains at $1,000 which can be gifted.
We continue to see loans reserved that are over income for our programs. Please contact staff to help determine household income if your borrower(s) are close to the limit. Household income is calculated differently than qualifying income.
Also remember the MT Veterans Home Loan Program balance is updated every month on the Lender Online site. This usually happens at the beginning of the month, but not at a specific time so please visit the site often to determine if there is a balance available to assist your Montana Veteran borrowers.
There has been some confusion with the Board’s Targeted Areas, please review them, and know where they are. Remember that Deer Lodge is not in Deer Lodge County and some areas of Great Falls are not actually in the targeted area of the City of Great Falls. Verify before utilizing the targeted area parameters, no exceptions can be made.
The lender annual recertification document deadline is July 31st . Please reach out to Charlie if you have any questions or require documents be re-sent, we are happy to work with you in any way needed.
We hope you’re having a wonderful summer and thank you for thinking of us whenever you have borrowers that fit into our programs.
May 25, 2023 Income and Purchase Price Limit Adjustments
The IRS has released revenue procedures that establish new Income and Purchase Price Limits for Bond programs, and on May 23, our Board approved new limits for MBOH programs. The updated income and purchase price limits can be found in the attached quick reference guide and on the MT Housing website, housing.mt.gov. Recapture tax forms have been updated; be sure you are using the most recent documents for new loans.
Regarding purchase price limits, they were very generous, we saw increases of 23% across the state. Incomes limits saw more modest increases, up to 10%, so there is a disconnect between the prices allowed and what the borrower can afford in this rate environment. Recently, we have seen an uptick in files where the borrowers are over income. Please be sure that your borrowers meet the Board’s income requirements when originating MBOH loans. Staff are happy to review income prior to loans being reserved.
With new purchase price limits being set, the maximum loan amount allowed in the Veteran’s Home Loan Program (VHLP) also increases to $457,117. The MT Veteran’s Home Loan Program has limited funds available – updates are posted monthly.
Three new lenders were approved at the Board meeting as well. We welcome them to the MT Housing Family.
A few administrative issues: We’ve seen lenders charging too much on the DPA loans provided through MBOH + and the Bond Advantage Programs. Remember the allowed fee is $175. Also, on all first mortgages, please keep the origination fee at or below 1.75%, no discount points and keep other fees affordable for our targeted market. As always, NO CASH BACK!
Targeted areas, especially City of Great Falls, need to be determined before reservations are made. Homes must be located within the city limits.
Training is being offered around the state, in conjunction with other affordable housing programs like NeighborWorks, HRDCs, and Rural Development. Upcoming sessions are in Havre on June 7 and Helena June 8. Contact Hannah Tester and NeighborWorks for more information.
February 3, 2023 MBOH Rate Decrease & Program Update Memo
We hope your New Year is going well! In response to mortgage rate decreases, we are doing what we can to benefit potential borrowers, so we are lowering our rate as well!
Effective immediately, February 3, 2023, the Regular Bond Program interest rate will decrease to 5.50%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will drop to 5.75%, and the Set-aside rate will be adjusted to 5.25%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
We are happy to announce that MBOH products are now listed on the Optimal Blue platform! For lenders who use Optimal Blue, please work with them to include Montana Board of Housing mortgage products in your financing options.
Remember there is a production requirement for all Montana Housing Participating Lenders. A lender must originate at least one program loan per year, use of the MCC program will meet this requirement. For 2023, if this requirement has not been met by May 17th, your organization will be dropped as a lender and will have to reapply and be approved to become a Participating Lender to have access to Montana Housing loan programs and to be listed on our website.
As a place holder, mark your calendars for the annual Housing Conference which will be held in Helena this year, May 15 – 17. Watch for more information on how to participate.
January 4. 2023 MT Housing Purchase Price Limit Update
Happy New Year! With the release of the 2023 FHA Loan Limits, Montana Housing has been able to update the Purchase Price Limits for the Board’s programs, which also increases the loan limit of the MT Veterans’ Home Loan Program. These limits are effective immediately, and are posted on our website and in lender online. They will be in effect until the IRS releases a new revenue procedure later this spring, at which time they could be adjusted up or down again.
Attached is the Quick Reference Guide which includes the new purchase price limits and VHLP loan limit of $372,655. Per the Revenue Procedure currently in effect, we are not able to increase income limits at this time, so please be sure that your borrowers meet the Board’s income limit requirements when originating a loan in our programs. New IRS income limit guidance will be released later this spring.
Montana Housing’s interest rate will remain at 5.75% for loans without DPA, 6.00% for the down payment assistance programs (MBOH + and Bond Advantage), and the Set-aside rate at 5.50%. The current rates for the 80% Combined and VHLP loan programs are posted on our website.
Please remember to complete the endorsements on your notes (1st and 2nd) for security and convenience. We get many notes where the ‘to line’ is blank and we must write in Montana Board of Housing/Investments, this is not a very secure way to transfer notes.
Staff hopes to see an increase in loan activity now that limits have increased and are happy to help in any way with training, questions, or loan scenarios. Feel free to contact us any time and have a wonderful 2023!!
December 6, 2022 MBOH Rate Decrease & Program Update Memo
Happy Holidays! Because of a favorable bond deal, we’re able to offer better rates!
Effective immediately, December 6, 2022, the Regular Bond Program interest rate will decrease to 5.75%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will drop to 6.00%, and the Set-aside rate will be adjusted to 5.50%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Another announcement is that we’re happy to welcome a new staff member. Rebecca Holland has joined us to run our Reverse Annuity Mortgage Program. This program was previously offered by the multi-family program and we’re glad to take on the opportunity to expand the offerings as much as possible.
Also, remember that new policy requires all participants to sell MBOH at least one loan a year. This isn’t based on the calendar year so you still have a few months to get those reservations in.
We wish you all a wonderful holiday season!!
October 24, 2022 MBOH Rate Increase & Program Update Memo
Sorry to make it a gloomy Monday but we’re announcing what everyone knew was coming. MBOH interest rates must be increased again.
Effective immediately, October 24, 2022, the Regular Bond Program interest rate will increase to 6.00%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will rise to 6.25%, and the Set-aside rate will be adjusted to 5.75%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
A reminder that the maximum loan amount allowed by the Board that is listed in the Purchase & Servicing Guide has been updated to further clarify: ‘The maximum loan amount the borrowers can finance will be the purchase price plus the FHA upfront premium, the VA guarantee fee, the RD guarantee fee or the PMI upfront premium to the extent permitted by such insurer or guarantor, as supported by the appraised value.
Be sure to utilize the forms available on the Lender On Line System. We’ve received outdated forms that must have been copied from earlier versions available on our on-line system. Please discontinue this practice if it applies to you.
October 17, 2022 DPA Program Update Memo
Following today’s Board meeting, we have some good news!
To encourage better utilization of our Down Payment Assistance (DPA) Programs, we requested a change that was approved by the Board.
Effective immediately:
- The maximum loan amount for both the Bond Advantage and MBOH Plus DPA programs is now $15,000.
Other actions taken by the Board at the meeting include the approval of a new MCC Resolution which will allow us to offer the MCC program after the end of 2022, and the addition of two new participating lenders. We welcome First Colony Mortgage and Guaranteed Rate Inc.
We truly appreciate all our partners and their continued support of MBOH programs which help Montanans fulfill their homeownership dreams.
October 3, 2022 MBOH Rate Increase & Program Update Memo
Sorry, but Montana Housing is going to have to add to this gloomy Monday with another interest rate hike.
Effective immediately, October 3, 2022, the Regular Bond Program interest rate will increase to 5.75%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will rise to 6.00%, and the Set-aside rate will be adjusted to 5.50%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
The VHLP Program has been very popular so be sure to check balances before reserving funds.
September 23, 2022 MBOH Rate Increase & Program Update Memo
Happy Friday. All apologies but our rate, as I’m sure you all anticipated, must be increased again.
Effective immediately, Sept 23, 2022, the Regular Bond Program interest rate will increase to 5.50%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will rise to 5.75%, and the Set-aside rate will be adjusted to 5.25%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Please note, the maximum loan amount allowed by the Board that is listed in the Purchase & Servicing Guide has been updated to further clarify: ‘The maximum loan amount the borrowers can finance will be the purchase price plus the FHA upfront premium, the VA guarantee fee, the RD guarantee fee or the PMI upfront premium to the extent permitted by such insurer or guarantor, as supported by the appraised value.
Be sure to utilize the forms available on the Lender On Line System. We’ve received outdated forms that must have been copied from earlier versions available on our on-line system. Please discontinue this practice if it applies to you.
The VHLP Program still has close to $2M in funds available. Keep it in mind if you have a MT Veteran that will qualify.
September 15, 2022 MBOH Rate Increase & Program Update Memo
And the roller coaster ride continues. As we prepare for a new bond issue, rate adjustments are necessary. We’re trying to keep these changes as painless as possible.
Effective 5:00 today, Sept 15, the Regular Bond Program interest rate will increase to 5.25%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will rise to 5.5%, and the Set-aside rate will be adjusted to 5.0%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
We’re happy to introduce our new staff person, Paige Bowsher. She started a couple weeks ago and is already a valuable part of our team. Feel free to reach out to her with any reservation and purchase needs.
The VHLP Program currently has close to $2M in funds available. Keep it in mind if you have a MT Veteran that will qualify.
Thank you for all who assisted in the recertification process – your help is greatly appreciated. We value your partnership and look forward to continuing to work with you all.
August 9, 2022 MBOH Rate Decrease & Program Update Memo
Bond and interest rates seem to have no pattern, so we are trying to remain competitive. Staff has received permission from our finance team to lower rates slightly.
Effective immediately, the Regular Bond Program interest rate will drop to 5.125%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will be reduced to 5.375%, and the Set-aside rate will decrease to 4.875%. The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Please remember that Kinsey Super has taken another position and should no longer be included on emails. We are recruiting for that position and will send an update soon.
Staff would like to remind lenders that NO CASH BACK is allowed within our programs, please structure deals so that this doesn’t become an issue. We have seen several files come in with cash back, this requires the lender to reach back out to the borrower for a principal reduction. Also, be sure that when a borrower investment is required, such as the $2,500 in the MT Vet Program (VHLP) or $1,000 in the DPA programs, that it is accounted for on the closing disclosure.
In recent months, Montana Housing has had to turn down the purchase of loans due to the borrowers being over income. Per IRS requirements, Montana Housing’s income calculation is based on household income, not qualifying income. Staff is happy to review income to determine eligibility prior to the reservation of funds. Training is available and an Income Guide can be found on our website. These income rules are not flexible, and we are unable to purchase a loan that is not within our income limits.
The VHLP Program currently has funds available, keep it in mind if you have a MT Veteran that will qualify.
July 18, 2022 MBOH Rate Increase & Program Update Memo
Bond and interest rates continue to rise and as a result, we must adjust rates once again.
Effective at 5:00 PM Monday, July 18, the Regular Bond Program interest rate will increase to 5.25%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will both be 5.50%, and the Set-aside rate will increase to 5.00%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Our Homeownership staff member, Kinsey Super, has taken another position within Housing and is no longer with us. We’re hoping to fill that seat soon. Please contact Jim Neary for any loans you may have been working on with Kinsey. We wish her all the best in her new endeavors.
Now for a little good news….in the month of June we received payoffs in the VHLP program, and the recaptured principal is now available for new loans. The current balance in the VHLP program is $1,546,591.
The annual re-certification process is in full swing, we look forward to hearing from you if we haven’t already. Please let us know if you have any questions.
We truly appreciate our partners and hope you’re all having a wonderful Summer!
May 17, 2022 - MBOH Rate Increase & Program Update Memo
Montana Housing has worked with our finance team to price our next bond issue for program funding. Bond rates are working against us and as a result, we must adjust rates once again.
Effective immediately, the Regular Bond Program interest rate will increase to 5.00%. The rate for the down payment assistance programs (MBOH + and Bond Advantage) will both be 5.25%, and the Set-aside rate will increase to 4.75%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
The Board held a meeting today and approved a change to the MBOH + DPA Program income limits, they will increase to $65,000 for a family of 1 or 2 and $75,000 for a household of 3 or more. The MBOH + DPA loan amount max remains at $10,000.
Also passed at the meeting was a production requirement for Montana Housing Participating Lenders. Going forward, a lender must participate in Montana Housing programs by originating at least one program loan per year, use of the MCC program will meet this requirement. If the requirement is not met, a lender must re-apply to become a Participating Lender to have access to Montana Housing loan programs and to be listed on our website. The recertification documents will be sent soon.
Thank you for your continued assistance in helping Montana Families obtain homeownership!
April 21, 2022 - MBOH Rate Increase
As Montana Housing works with our finance team to structure the next bond issue to fund our programs, market volatility and the upward trend of mortgage and bond rates requires the Board to adjust rates again.
We are increasing the Regular Bond Program Rate to 4.75%. This new rate will be effective today, April 21 at 5:00 PM.
The Set-aside Rate will increase to 4.50% and the rate for the down payment assistance programs (MBOH + and Bond Advantage) will both be 5.00%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
The new Submission Voucher became final on April 15, please let us know if you have any questions regarding the documents now being required. Loan packages submitted should include the new voucher and the loan package documents should be in the stacking order listed on the new voucher.
Please note, the maximum loan amount for Montana Housing loans is the purchase price plus the FHA upfront premium, the VA guarantee fee, or the RD guarantee fee as permitted by such insurer or guarantor. We have recently been running into problems on RD loans, even though RD allows for a loan amount up to the appraised value so certain closing costs can be included, Montana Housing does not. Feel free to contact us if you have questions regarding this overlay.
We appreciate your partnership and regret the need to be so volatile with our rates recently. MBOH Staff wish you a wonderful Spring Season!
March 30, 2022 - MBOH Rate Increase
As Montana Housing works with our finance team to structure the next bond issue to fund our programs, market volatility and the upward trend of mortgage and bond rates, requires the Board to adjust rates substantially.
We are increasing the Regular Bond Program Rate to 4.50%. This new rate will be effective today, March 30th at noon.
The Set-aside Rate will increase to 4.25% and the rate for the down payment assistance programs (MBOH + and Bond Advantage) will both be 4.75%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Remember that we’ll be transitioning to a new Loan Submission Voucher starting April 15. Copies of it were sent out for comment and we’re still happy to receive any that you may have. The new voucher will be available for use on April 1 through Lender On-line and will be required to be used April 15 when the old voucher will be removed from Lender On-line. Adjustments were also made to the new Buyer Affidavit (replacing the Mortgagor’s Affidavit). Please contact any of our staff if you have questions.
We appreciate your partnership and regret the need to be so volatile with our rates recently. MBOH Staff wish you a wonderful Spring Season!
March 24, 2022 - MBOH Rate Increase
In step with the current market and bond rates, Montana Housing is increasing the Regular Bond Program Rate to 3.75%. This new rate will be effective Friday, March 25th at noon.
The Set-aside Rate will increase to 3.50% and the rate for the down payment assistance programs (MBOH + and Bond Advantage) will both be 4.00%.
With the volatility in the market and need to increase rates multiple times, which is not typical for the Board programs, we are allowing extra time for lenders to make reservations for loans in process before this rate increase takes effect. Please make sure, prior to reserving, that you are far enough along in the process to ensure the borrowers qualify for Board programs and that their loans will close. The Board does have a cancellation fee of 0.5% of the principal balance reserved and it will be charged if loans are cancelled for anything other than unforeseen property issues.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Please be sure complete loan packages are sent when submitting for review. Please be sure to input Annual salary as opposed to monthly so that proper amounts are checked at time of reservation and populated into auto-fill closing documents.
Remember that we’ll be transitioning to a new Loan Submission Voucher starting April 15. Copies of it were sent out for comment and we’re still happy to receive any that you may have. The new voucher will be available for use on April 1 through Lender On Line and will be required to be used April 15 when the old voucher will be removed from Lender On Line. Adjustments were also made to the new Buyer Affidavit (replacing the Mortgagor’s Affidavit). Please contact any of our staff if you have questions.
We appreciate your partnership and regret the need to be so volatile with our rates recently. By breaking the rate increases out in parts, we were able to provide more funding at lower rates for a longer period rather than simply raising them .5% at one time with no warning. MBOH Staff wish you a wonderful Spring Season!
March 16, 2022 - Program Changes and New MBOH Loan Submission Voucher
Montana Housing has been working to update our program document requirements. We are happy to announce some important changes.
3 Year Federal Tax Return Requirement for First-time Homebuyer Documentation Removed -
We are no longer requiring three years Federal Income Tax Returns or transcripts to document first-time homebuyer status for MBOH Program Loans, now we will only request taxes and transcripts if they are required for underwriting.
This change is effective immediately for loans in all stages if the first-time homebuyer status is documented as stated below.
Lenders will be required to verify borrowers’ first-time homebuyer status through the following documentation:
- Credit report: Must show no mortgage loans in the last 3 years (unless documented that the loan was not for their principal residence), and
- 1003 Application: Must show the borrower has not owned their principal residence in the last three years; Must show two years minimum rental/non-ownership history
If the Lender cannot verify the absence of ownership from a review of the credit report and final loan application, the absence of an ownership interest must be documented and verified by:
- Title search with respect to the Borrower(s) residence(s) to provide reasonable assurance that there was no ownership by the Borrower(s)
- Underwriters can request additional documentation (e.g., copy of lease)
- The option of 3 years Federal Income Tax Returns or transcripts remains
Seller Affidavit is No Longer Required
Effective immediately for loans in all stages, the Seller Affidavit is no longer required for Montana Housing loans. It has been determined that the signed buy/sell and the seller’s closing disclosure are adequate documentation to confirm the agreed upon purchase price of the property and our requirement of those documents can take the place of the Seller Affidavit.
The Seller Affidavit has been removed from Lender Online and is not listed on the NEW Submission Voucher.
NEW Submission Voucher
Montana Housing has also created a New Submission Voucher to make our programs a bit easier to work with. We will no longer have a separate submission voucher for each of our programs. The Regular Program/Setaside Voucher, the CLT Voucher and the DPA Voucher have all been combined into one. The NEW Submission Voucher incorporates the program changes announced in this memo.
Other changes you will see on the NEW Submission Voucher are the Credit Report must reflect the OFAC findings, and if there are any findings, they must be cleared before the loan can be purchased. We are also requesting the Taxpayer Consent Form as a new line item on the voucher.
A copy of the NEW Loan Submission Voucher is attached for your review and comment. It will be made available on Lender Online on April 1st, and we will require it be used for all applicable loan packages submitted to Montana Housing starting April 15th.
Please note that the Mortgagor’s Affidavit has also been updated. It is now called the Buyer Affidavit and the new version has replaced the old version on Lender Online. The updated version is designed to make the document easier to use and reflects the program changes included in this memo.
Montana Housing has seen an uptick of loans being reserved that do not have the Homebuyer Ed Certificate and Borrower Stat sheet attached. These documents are required at the time of reservation, please be sure to upload when reserving the loan.
Thank you for your continued support of our homebuyer programs.
March 2, 2022 - MBOH Rate Increase
In step with the current market and bond rates, Montana Housing is increasing the Regular Bond Program Rate to 3.50%. This new rate will be effective Thursday, March 3rd at noon.
The Set-aside Rate will increase to 3.25% and the rate for the down payment assistance programs (MBOH + and Bond Advantage) will both be 3.75%.
With the volatility in the market and need to increase rates multiple times, which is not typical for the Board programs, we are allowing extra time for lenders to make reservations for loans in process before this rate increase takes effect. Please make sure, prior to reserving, that you are far enough along in the process to ensure the borrowers qualify for Board programs and that their loans will close. The Board does have a cancellation fee of 0.5% of the principal balance reserved and it will be charged if loans are cancelled for anything other than unforeseen property issues.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
Please be sure complete loan packages are sent when submitting for review. We’ve recently had issues with packages severely missing documentation. These packages will simply be returned if the practice continues.
Remember that we have training available for all stages of loan origination and packaging so please reach out if you have staff changes or questions of any kind.
We appreciate your partnership and strive for smooth loan reservation and purchase processes.
Happy Mardi Gras!!
February 14, 2022 - MT Housing Income and Purchase Price Limits Update & Rate Increase
At its meeting this morning, the Board reviewed and approved new income and purchase price limits for Montana Housing programs. As you’ll see, some income limits did not change because of the nature of the location and how limits are determined, but there were increases for most counties around the state. Attached is the Quick Reference Guide which includes the updated limits and program matrixes. These limits will be in effect until the IRS releases new revenue procedures later this spring. Lender Online has been updated to reflect these changes and they are available to start to use today.
It has also been determined that Montana Housing must also raise its lending rates. Effective immediately, our rates will be as follows: Setaside rate 2.875%, Regular Bond without DPA 3.125%, Bond Advantage and MBOH Plus DPA Programs 3.375%.
The MT Veteran’s Home Loan Program has funds available for your homebuyer. This program provides first mortgage funds to Montana residents who are serving or have served in the Montana National Guard or in the national armed forces and reserves. It has an interest rate that is much lower than the Regular Bond Program and the program has no income or purchase price limits. There is a loan limit, which has also increased and is now $349,205 statewide.
Our website has all program information including Terms and Conditions, loan program parameters and up to date interest rates: Housing.mt.gov under the Lender Section.
We hope you’re all doing well and having a wonderful 2022!
January 13, 2022 - MBOH Rate Increase
Earlier today, Montana Housing priced our next bond issue. Though investor interest and market conditions provided us with good pricing, bond and mortgage rates are on the rise and the decision was made to increase MT Housing’s Regular Bond Program Rate to 2.875%. This new rate is effective immediately!
The Set-aside Rate is increased to 2.625% and the rate for the down payment assistance programs (MBOH + and Bond Advantage) are both now 3.125%.
The current rates for the 80% Combined and VHLP loan programs will not be affected by this change.
We’ve recently reached out to lenders regarding expired loan reservations and an unusually large number of loans had to be cancelled. Having funds reserved on the system for borrowers who don’t qualify for our programs or who have backed out of their loan, takes away the opportunity for qualifying borrowers to use those funds. The Board also loses money when loans don’t close because of the negative arbitrage position we are in, paying interest on bonds and not having a mortgage to collect interest from. The Board has been lenient in assessing cancellation fees for reservations that don’t produce loans, going forward we will be charging penalties, so be sure your borrower qualifies prior to reserving funds.
Going forward, when entering loans on Lender Online, we’re asking lenders to be sure DTI ratio, both front and back, and credit scores are input under Borrower Information Section. When the borrower is utilizing Down Payment Assistance, be sure the DPA payment is included in the DTI. Please pull these numbers directly from the underwriting documents used to approve the loans.
MERS MIN Summaries in files are showing up on multiple pages. When calibrating the MERS Summary Printout settings, please print at 70% of size and 1 page per sheet in the printing options so there is only one sheet for the MBOH staff to review.
We hope you all had a wonderful holiday season and a Happy New Year!!
Thank you for your partnership and all you do!
November 15, 2021 - MBOH Bond Advantage DPA revisions and other reminders
At today’s Board meeting they implemented changes to the MT Housing Bond Advantage Down Payment Assistance Program, this our amortizing DPA program. The amount of DPA allowed has been increased from $10,000 to $12,500. All other parameters, such as the 105% combined loan to value, credit score requirements, etc. are still in place. This change takes place immediately!
The Community Land Trust (CLT) training module remains on our online training library on the Montana Housing Website. Please take this training and contact our staff with questions before closing a loan for a land trust property that will be financed by Montana Housing and be sure to utilize the proper CLT submission voucher.
When originating or re-issuing MCCs, remember that a full package with documents listed on the submission voucher must be submitted. All documents must be received before the MCC can be produced/reissued. Lenders need to work with their borrowers to receive those needed documents. Also, be sure you have all MCC documentation sent for those reserved in 2021 well before the end of the year!
Montana Housing continues to see “points” listed on the CDs we receive from the closing documents. Board rates are set so discount points for buying down a rate don’t apply with our program. Please refrain from calling fees/charges “points” on Board documents.
Don’t forget about our Set-aside programs! Montana Housing’s Set-aside Loan Program is designed to assist borrowers who receive down payment assistance or first mortgages through an approved source with the lowest rate we offer, currently 2.375%. Approved Set-aside Programs are listed on our website at https://housing.mt.gov/Homeownership/Lenders/Set-aside-Programs
We at MBOH hope you all have a wonderful holiday season and are thankful for your partnership!
October 29, 2021 - MBOH Rate Increase
The decision was made to increase MT Housing’s Regular Bond Program Rate to 2.625%. This new rate is effective immediately!
The Set-aside Rate will increase to 2.375%.
This rate will also affect the down payment assistance programs (MBOH + and Bond Advantage). They both are now 2.875%.
The current rates for the 80% Combined and VHLP loan programs will not be effected by this change.
We always appreciate your partnership and understanding as rate adjustments become necessary.
Thank you for all you do!
October 18, 2021 - MBOH Plus DPA Loan Limit Increase & Updates
It was approved at the October 18, 2021 Board meeting that the loan amount allowed in the MBOH Plus Down Payment Assistance Program will be increased from $6,500 to $10,000. This is the 0% deferred, non-amortizing DPA program offered by the Board, and this change takes place immediately.
As previously noted, the tax service has increased to $73.00, this is the amount the Board will charge as part of our funding. Please update your origination process.
If you originate Community Land Trust (CLT) loans that you intend to sell to Montana Housing, be sure to review our training module and our requirements listed on our website. We have had several CLT loans submitted with errors that cause delays in funding and the additional expense of re-recording documents.
In recent months, Montana Housing has had to turn down the purchase of several loans due to the borrowers being over income. Per IRS requirements, Montana Housing’s income calculation is based on household income, not qualifying income. Staff is happy to review income to determine eligibility prior to the reservation of funds. Training is available and an Income Guide can be found on our website. These income rules are not flexible, and we are unable to purchase a loan that is not within our income limits.
A couple of other issues that we have been seeing in files:
Lenders are closing loans for different loan amounts than what was reserved. Please work with our staff if the loan amount needs to be updated prior to the loan closing. This ensures that we have sufficient funds available to purchase all reserved loans and helps us track and monitor our pipeline.
DPA notes have been coming in with incorrect maturity dates and interest rates and note endorsements are coming in blank and unsigned. All these items delay the purchase of loans. Please be sure documents are correct at the time of closing and prior to being shipped to the Board.
Thank you for your wonderful partnership and enjoy your Fall!
September 29,2021 - 80% Combined Prog revisions and other reminders
We have recently implemented changes to the MT Housing 80% Combined Program Terms and Conditions, ratio requirements have been updated to better pair with the 20% loan program providers.
Please remember for loans that closed on or after September 1st our tax service fee has increased to $73.00. This will affect all loans going forward. If you haven’t already, be sure to update your origination process to accommodate this change.
A Community Land Trust (CLT) training module has been added to our online training library on the Montana Housing Website. Please take this training and contact our staff with questions before closing a loan for a land trust property that will be financed by Montana Housing.
When originating loans in either of the Montana Housing Down Payment Assistance Programs, MERS cannot be used on the DPA Loan, these loans must be assigned to Montana Board of Housing.
Montana Housing continues to see Notes with incorrect loan amounts and maturity dates. Please be sure these documents are correct and final prior to having the borrower sign at closing, corrections after the fact are time consuming and slow down the purchase of the loans. Also, be sure to inform staff if the final loan amount changes and no longer matches the amount that was initially reserved so the reservation can be updated in our system.
When stacking a purchase package for submission to Montana Housing, be sure the documents are stacked in the order they are listed on the Submission Voucher and be sure the top and bottom sections of the Loan Submission Vouchers are filled out and signed.
Thank you to all our participating lenders for timely submission of your recertification documents, and much appreciation for your partnership over this past Summer – we look forward to our continued partnership through this year and beyond!
April 30, 2021 - Montana Housing Income Limits Update
By popular demand, new income limits have been calculated for the Montana Housing bond programs. The IRS released their latest rule earlier this month and attached is the Quick Reference Guide which includes the 2021 income limits and program matrixes. Our system has been updated to reflect these changes and they are available to start to use today.
Some program reminders:
Please remember discount points are not allowed, be sure not to include them on the CDs
Be sure that ALL sections of the Purchase Submission Voucher are completed – including the bottom section with the appraisal, HOA dues (if applicable), signature, etc.
The MT Veteran’s Home Loan Program has funds available for your homebuyer. This program provides first mortgage funds to Montana residents who are serving or have served in the Montana National Guard or in the national armed forces and reserves. As you know, it has an interest rate that is much lower than the regular bond program and the program has no income or purchase price limits. There is a loan limit, which has also increased and is now $296,380 statewide.
Our website has all program information including Terms and Conditions, loan program parameters and up to date interest rates: Housing.mt.gov under the Lenders Section.We hope you’re all doing well and enjoying the Montana Spring weather we’re having!
February 4, 2021 - Rate Decrease Memo
In anticipation of favorable rates on an upcoming sale of bonds, we are able to lower the rate for MT Housing’s Regular Bond Program to 2.50%. This new rate will take effect immediately!!!
The Set-aside Rate will drop to 2.25%.
This rate will also affect the down payment assistance programs (MBOH + and Bond Advantage), both are now 2.75%.
Thanks for all your help working with staff to complete our pipeline of loans and submitting final documents as requested. Please remember to continue to check our Lender Online System regarding missing documents, conditions and to-follow documents related to loans you’ve sold to MT Housing. The loan purchase process isn’t complete until all conditions have been resolved. To-follow documents are due no later than 90 days after the purchase of a loan, fees may be imposed for documents not received in a timely manner.
Also remember to endorse your notes to Montana Board of Housing or Montana Board of Investments (for MT Vet Program Loans). We have more and more notes coming in without an endorsement.
We truly appreciate your help promoting our program and look forward to working more closely as permitted. Thanks for your partnership!!
December 17, 2020 - MT Housing Update and Holiday Greeting
Happy Holidays!
A few end of the year things to remember:
We still have awesome rates with MT Housing’s Regular Bond Program Rate at 2.75%. The down payment assistance programs (MBOH + and Bond Advantage) are at 3.00% and the set-aside rate is at a very low 2.50%. Please remember to utilize this rate whenever using programs listed on our website including Home$tart Funds, NWMT, City of Billings, and HRDC Programs.
Community Land Trusts continue to be a popular program in high cost areas. Whenever working with these CLT’s, be sure to check our website for our Terms and Conditions, this program has some special requirements. Work with Montana Housing and CLT staff prior to closing to ensure all documents are completed correctly and recorded properly. New trainings on our website will be available soon!
Rural Development (RD) has issued announcements lately regarding their availability of funds to guarantee loans. Montana Housing will work with lenders and temporarily accept Conditional Commitments issued from RD at the time of funding, with the Loan Note Guarantee (LNG) being a “to-follow” final document. This is not without risk, if a LNG can’t be obtained once RD funding is restored, the lender would be liable to re-purchase the loan. This has never occurred and we have confidence in RD’s ability to guarantee all loans purchased.
A reminder that the MT Veteran’s Home Loan Program does have funding off and on so please keep that low interest rate option in mind for Montana’s qualifying veterans. The loan limit is different than the regular program and these are sold to the Board of Investments, so they differ in some major ways from our MBOH Programs. Be sure to inform MBOH Staff if any loan amounts change immediately because of funding limitations.
Please be sure to complete any Mortgage Credit Certificates (MCC’s) as soon as you can for this year. We don’t want a bunch coming in at the last minute – especially since we’ll have limited staff the last week of the year. Pay attention to email replies and phone messages to determine how long a staff member may be out. I’ll include a list of staff so that you can get quick replies when the Specialist you call is out of the office.
We’re so thankful to have you all as partners and look forward to continued success with you in 2021!
September 17, 2020 - Rate Decrease
The decision was made to decrease MT Housing’s Regular Bond Program Rate to 3.00%. This new rate will take effect immediately!!! The Set-aside Rate will drop to 2.75%. This rate will also affect the down payment assistance programs (MBOH + and Bond Advantage). They are now 3.25%.
Please remember to send purchase files as completely as possible and stacked in the proper order. This allows us to complete the review process and have loans purchased quickly – which is what we all strive for!
We hope you’re all safe and well. Enjoy your Fall and thank you for your partnership!
July 30, 2020 - Rate Decrease
The decision was made to decrease MT Housing’s Regular Bond Program Rate to 3.25%. This new rate will take effect immediately!!! The Set-aside Rate will drop to 3.00%. This rate will also affect the down payment assistance programs (MBOH + and Bond Advantage). They are now 3.50%.
As you package loans for MT Housing, please remember to make certain the submission voucher is the first item in our purchase package and that the order of the documents is correct – this is vitally important to ensure loans are reviewed and purchased on a timely basis.
Thanks for all your help working through the remote work issues and helping the borrowers of Montana attain their dreams of homeownership. We all hope you’re enjoying your Summer!
June 8, 2020 - Montana Housing Rate Decrease
Good Morning,
Effective immediately the rates for Montana Housing loan programs have gone down. The rate for the Regular Bond Program is now set at 3.50%, the rate for set-aside loans has dropped to 3.25% and the rate for both down payment assistance programs (MBOH + and Bond Advantage) is now 3.75%.
We want to remind lenders that Montana Housing’s Set-aside Loan Program is designed to assist borrowers earning up to 80% of median income who receive down payment assistance from specific sources or special programs approved by our Board. If your borrower is using Home$tart, Dream Makers Grant Funds, HOME funds from an HRDC or NeighborWorks, etc. they may be eligible for this lower rate first mortgage. Check our website HOUSING.MT.GOV to see all approved Set-aside partners.
Also, title insurance is not required on MBOH Plus and Bond Advantage DPA loans, since they can only be paired with a Montana Housing first mortgage.
There is no interim servicing allowed for loans sold to Montana Housing. Please instruct borrowers to make their first and all subsequent payments to Montana Housing Loan Servicing. Please DO NOT pay FHA MIP or property taxes after the loan is closed, these will be paid by our loan servicing department.
Copies of the recorded Deeds of Trust are required as part of the purchase package for a loan to be funded. Please do not submit the purchase package until the recorded documents are available and can be included.
We need to receive 2019 tax returns when 3 years of returns are required in a purchase package. If a borrower has not filed their 2019 taxes, they can be “To Follow” documents since the deadline for 2019 tax returns has been extended.
Thanks to all our partners for helping Montanans become homeowners.
May 19, 2020 - Montana Housing Updated Income and Purchase Price Limits
The new 2020 Income and Purchase Price Limits were established and approved by the Board today. They are effective immediately for any loans that close today and going forward.
May 8, 2020 - Montana Housing Regular Bond Program Rate Decrease
Due to favorable rates on the recent sale of bonds, we are able to lower the rate for MT Housing’s Regular Bond Program to 3.75%. This new rate will take effect immediately!!! The Set-aside Rate will drop to 3.50%. This rate will also affect the down payment assistance programs (MBOH + and Bond Advantage), both are now 4.00%.
Thanks for all your help working with the borrowers of Montana and helping them overcome the barriers in place during these trying times.
Please remember to continue to check our Lender Online System regarding missing documents, conditions and to-follow documents related to loans you’ve sold to MT Housing. The loan purchase process isn’t complete until all conditions have been resolved. To-follow documents are due no later than 90 days after the purchase of a loan, fees may be imposed for documents not received in a timely manner.
