Administrative Rules of Montana › Department 8 - COMMERCE › Chapter 8.111 - BOARD OF HOUSING › Subchapter 8.111.7 - Montana Veterans' Home Loan Act › Rule 8.111.707 - LOAN TERMS AND CONDITIONS

Current through Register Vol. 13, July 5, 2024
(1) The amount of a
				loan may not exceed 95% of the value of the statewide allowable purchase price
				determined by the board.
(2) The
				borrower must contribute a minimum of $2,500 of the borrower's own funds toward
				the down payment for the purchase of the property or the closing costs of the
				loan, with no cash back to the borrower at closing.
(3) The lender may charge and collect lender
				fees not exceeding the amount allowable under the board's regular bond program.
				No points may be charged. Except as permitted by law, all fees must be paid by
				the borrower or seller and will not be paid or financed by the board. Where
				permitted by law, a borrower may use the minimum contribution to pay closing
				costs and may borrow the maximum loan amount allowed by the mortgage insurer
				for the loan.
(4) Loans must meet
				FHA, VA, RD, or HUD 184 underwriting standards as specified by the board and
				must be guaranteed by FHA, VA, RD, or HUD 184. Loans guaranteed by VA must have
				full guarantee only with no prior entitlements used and not restored.
(5) Loans will be 30-year, fixed rate
				loans.
(6) Loan interest rates will
				be one percent below the lower of the Federal National Mortgage Association's
				60-day delivery rate or the board's regular bond home loan mortgage program.
				The interest rate will be posted on the board's web site and updated every two
				weeks.
(7) Loans must be documented
				with a standard promissory note used by FHA, Fannie Mae, or Freddie Mac;
				secured by a first priority trust indenture under the Montana Small Tract
				Financing Act, Title 71, chapter 1, part 3, MCA; and covered by a lender's
				policy of title insurance.
(8) The
				loan agreement must provide that taxes and insurance payments will be escrowed,
				including hazard and mortgage insurance. Hazard insurance must meet the
				standards specified in the guide and the terms and conditions specified in the
				lender's contract with the board.
(9) The loan documents shall provide that, in
				the event the borrower ceases to occupy the property as the borrower's primary
				residence, the loan interest rate shall increase by one percent per annum six
				months after such event and, at the option of the board, the entire loan
				indebtedness shall become immediately due and payable 12 months after such
				event.
(a) The board or its designee may
				require the borrower to periodically verify continued occupancy of the property
				as a primary residence, and failure to comply with such verification requests
				shall constitute a default under the loan, except for good cause
				shown.
(b) Upon written request of
				the borrower, the board in its sole discretion may extend or decline to extend
				the 12-month repayment period based upon the borrower's inability to sell the
				property despite good faith efforts, considering the following factors:
(i) prompt and continuing listing of the
				property for sale;
(ii)
				reasonableness of the listing price and other offering terms;
(iii) any offers the borrower has received
				and refused;
(iv) market
				conditions;
(v) preservation of the
				loan collateral; and
(vi) any other
				factors deemed relevant by the board.