Basic Program Guidelines

NeighborWorks Great Falls
NeighborWorks Montana
509 1st Avenue South, Great Falls, MT 59401
(406) 761-5861 FAX (406) 761-5852
Loan Department Fax line (406) 216-3850

OVERVIEW OF PROGRAMS FOR PURCHASERS

NWGF/NeighborWorks Montana has a variety of second mortgage products available to assist qualified Borrowers with their down payment and closing costs associated with purchasing a home. Except for the 0% Deferred Appreciation Share Programs the loans are available statewide.

Basic guidelines for all programs:
Borrowers must occupy the property as their principal residence for the life of the loan
Borrowers are required to have $500.00 of own funds in transaction
Homebuyer education by an NWGF Approved educator must be completed prior to loan closing
Liquid assets not to exceed $5,000 & Total family assets not to exceed $70,000
Income is for all occupants of the home aged 18 and over. All forms of income must be documented. Fully completed VOE's are required for all jobs, Social Security Award Letters, child support verifications and divorce decrees. If the Borrower is self-employed, 2 full years of Federal tax returns and a year to date P & L is required.

A. Programs for families whose income is below 80% median income:
City of Great Falls 0% Deferred Appreciation Share, State HOME 0% Deferred Appreciation Share, MBOH 1st & 2nd and TANF (TANF Program has its own income guidelines)
(Statewide Low to Moderate Program may be applicable if qualifications below have been met)

To qualify for Programs below 80% median income, Borrowers must be:
1st time homebuyers (not owned within the last 3 years) OR
Single parent with dependent child(ren) OR
Disabled family member
For the TANF Program there must be a child living in the property

CITY OF GREAT FALLS 0% DEFERRED APPRECIATION SHARE 2nd Mortgage:
0% Deferred Appreciation Share 2nd mortgage funds are available for properties located in the City Limits of Great Falls. The 2nd mtge becomes due if the borrower no longer occupies the property as their principal residence, sells or transfers the title, upon their death or when they repay the original first mortgage. When they repay the first mtge and still occupy the property, the 2nd mtge becomes payable in monthly installments equal to the amount of the Principal & Interest payment of the original first mtge. There is also an Appreciation Share requirement, where the Borrower will share with NWGF a percentage of the net gain on the sale or refinance of the property. See program guidelines for details. Borrowers must use at least 29% of their gross income for housing. The maximum 2nd mtge amount is $15,000.00. There is a Home Inspection process required for this program. A Housing Quality Standards Inspection (HQS) is also required. The property being purchased cannot have been rented in the last 90 days. If the property was built prior to 1978 and peeling or chipping paint is identified on the home inspection or appraisal, then full lead based paint abatement process will have to be followed. This Program is currently funded, but check with the NWGF office for availability and additional restrictions. These funds are intended for families “in need” who could not qualify without 0% funds. Also the family size in relation to property being purchased may be a factor.

STATE HOME 0% DEFERRED APPRECIATION SHARE 2nd Mortgage:
0% Deferred Appreciation Share 2nd mortgage funds are available in 53 Counties throughout the State of Montana (can never be used in the cities of Great Falls, Missoula or Billings). These funds can only be used in areas where there are no open HOME grants currently in place. The 2nd mtge becomes due if the borrower no longer occupies the property as their principal residence, sells or transfers the title, upon their death or when they repay the original first mtge. When they repay the first mtge and still occupy the property, then the 2nd mtge becomes payable in monthly installments equal to the amount of the Principal & Interest payment of the original first mtge. There is also an Appreciation Share requirement, where the Borrower will share with NWGF a percentage of the net gain on the sale or refinance of the property. See program guidelines for details. The Borrower must use at least 29% of their gross income for housing. The maximum 2nd mtge is $10,000.00 (exceptions may be available for disabled applicants or in some high cost areas on a case by case basis, which must be approved by NWGF prior to loan submission). The property cannot have been rented in the last 90 days. If the property was built prior to 1978 and peeling or chipping paint is identified on the home inspection or appraisal, then full lead based paint abatement process will have to be followed. An acceptable Environmental certification must be obtained on the property, and a Housing Quality Inspection (NWGF will order these) is required and any repairs recommended must be completed prior to closing.

NWGF/NWMT/MBOH 1st & 2nd Mortgage Program:
An Amortized second mortgage is available in conjunction with our MBOH 1st Mortgage setaside. The maximum amount of the second mortgage is $5,000.00. Borrowers must be approved for an MBOH first mortgage through an approved lender. The interest rate on both mortgages is currently 5.50% for 30 years. (Rate is subject to change by MBOH)

TANF (Temporary Aid For Needy Families):
An Amortized second mortgage for families who are at or below 200% of the poverty level for the State of Montana. There must be at least one child in the family. The subordinate mortgage is in conjunction with an approved MBOH or RD 1st mortgage. Minimum amount is $3,000.00, maximum $7,500.00* amortized @ 2.50% for 30 or 15 years. The loan has to be approved by the MBOH so extra approval time is required. * In cases of genuine need the maximum loan amount can be $20,000.00. Check with NWGF to make sure program is funded.

B. Programs for Borrowers whose income is above 80% median or Borrowers who have owned a home in the last 3 years:
Statewide Low to Moderate Income, Participating Bond Pool

STATEWIDE LOW TO MODERATE INCOME AMORTIZING SUBORDINATE MORTGAGE:
An Amortizing second mortgage up to a maximum of $5,000.00. The interest rate varies according to the Borrowers total family income, and is subject to change quarterly, so check our website for the current rates. Borrowers with income <80% of adjusted median maximum term is 30 years, and for Borrowers whose income is >80% of adjusted median, the maximum term is 15 years. Maximum income for Borrowers is 125% of median income (for families with Native American ancestry the maximum income is 150% of median income).

PARTICIPATING BOND POOL PROGRAM:
Available to BOND POOL Participants (Currently US Bank, Mountain West Bank, Stockman Bank, Wells Fargo Home Mortgage)
An Amortizing second mortgage up to a maximum of $5,000.00. The interest rate varies according to the Borrowers total family income, and is subject to change quarterly, so please check our website for the current rates. Borrowers with income <80% of adjusted median maximum term is 30 years, and for Borrowers whose income is >80% of adjusted median, the maximum term is 15 years. Maximum income for Borrowers is 125% of median income (for families with Native American ancestry the maximum income is 150% of median income).

Periodically funds are available for Section 8 recipients who are eligible for the Section 8 to HomeOwnership voucher. Call for details.

SEE SPECIFIC PROGRAM GUIDELINES FOR ADDITIONAL QUALIFICATIONS AND LOAN FEES.

All loan reservation packages must be sent to the NWGF office in Great Falls using the reservation checklist. Please allow 1½-2 weeks for the loan to be reviewed.

Revised 10/1/07