MBOH First and Second Guidelines

TERMS AND CONDITIONS
NEIGHBORWORKS GREAT FALLS / NEIGHBORWORKS MONTANA
AFFORDABLE HOUSING PROGRAM SETASIDE

$4,000,000 at 5.50% for First Mortgages and $1,000,000 at 5.50% for Subordinate Mortgages

July 12, 2002 (Revised 10/1/07)

The mortgages financed under this program are specially structured with a first and subordinate mortgage with Montana Board of Housing financing both mortgages. The sum of all financing may not exceed 100% of the cost to acquire the property plus any normal prepaid expenses. The subordinate mortgage may be for down payment and closing costs and will be guaranteed by NeighborWorks Great Falls.

The mortgages will be structured so that the subordinate mortgage (maximum of $5,000) is a participation of the first and allow for only one monthly principal and interest payment of the combined total of both the first and subordinate mortgages. The first mortgage will have priority in case of foreclosure.

Each First Mortgage Loan shall be either insured by FHA under Section 203(b) of the National Housing Act, guaranteed by RD under Title V of the Housing Act of 1949, or guaranteed by the VA under Section 810, Chapter 37 of Title 38, U.S. Code. RD may also participate in loans under this program by financing a portion of the transaction and taking a second mortgage which will be superior to the subordinate mortgage. Applicants must provide their own funds in a minimum of $500 for FHA and VA loan transactions and a minimum of $1500 for a RD Guaranteed loan transaction (unless applicant has taken homebuyer education then $500 minimum required). Loan Leveraged loan transactions do not have a minimum of borrowers own money.
The fixed rate of interest on the Mortgage Loans shall be 5.50% per annum (rate subject to change at Board's discretion).
The term of the Mortgage Loans shall be 30 years and such Mortgage Loans shall provide for complete amortization by maturity by equal monthly payments of principal and interest.
The Servicer may deduct a monthly servicing fee at the annual rate of three-hundred-seventy-five thousandths of one percent (.375%) of the outstanding principal balance of both Mortgage Loans. The servicing fee factor is .075 (for 5.50%).
The acquisition cost of a Residence being financed by a Mortgage Loan shall include cost of completing the residence and unpaid SID assessments and must not exceed maximum purchase price limits:

Maximum Cost for		Maximum Mortgage for
Existing	New Construction	New Construction**
Statewide
$200,160	$237,031	$200,160

**Maximum Mortgage Limits for Existing homes are the Purchase Price Limits

Total Family Assets not to exceed $70,000 and $5,000 in net liquid assets.
Homebuyer to be either a first-time homebuyer; single parents who owned a home with a spouse while they were married; or disabled.
The Residence to be financed shall be occupied as the mortgagor's principal residence, and no more than 15% of the total area of the residence may be used in a trade or business.
Refinancings of existing Mortgage Loans are not eligible for purchase by the Board. Refinancings of construction period loans or other interim financings which have a term of 24 months or less are not considered refinancings of existing Mortgage Loans.
Recapture tax provisions will apply.
A mortgagor can be obligated on only one Montana Board of Housing loan at a time.
An eligible Mortgage Lender desiring to reserve funds must submit (1) the Mortgage Loan Reservation/Confirmation Report (BOH Form 99); (2) a copy of an executed FHA/VA/RD Loan Application or other complete loan application used by the Mortgage Lender; (3) a copy of an executed Buy/Sell Agreement; (4) verification of Annual Family Income; (5) Disclosure of Reservation Fee Refund Policy signed by mortgagor(s);(6) Letter from the NeighborWorks Great Falls confirming the eligibility of the Mortgagors for the program; and (7)Signed “Release Of Financial Information” form. Upon receipt of such documents and funds, the Board may reserve bond proceeds for 120 days to acquire Mortgage Loans on existing housing and 180 days to acquire Mortgage Loans for new construction. Such period may be extended upon payment of an additional one-fourth of one percent (.25%) for each 30-day extension, which shall only be paid by the Mortgage Lender. If the Mortgage Loan is not acquired by the Board within this time period, a one-fourth of one percent (.25%) cancellation fee will be imposed except as provided in Section 15 hereof.
Maximum Gross Annual Family Income from all sources not to exceed 80% of the area median income for the County as adjusted annually and for household size.
The Board will purchase Mortgage Loans at up to one hundred two percent (102%) of the face amount of the Mortgage Loan. The Mortgage Lender may not charge fees since MBOH is paying them. Borrower must pay a $350 NWGF packaging fee directly to NWGF.
The Board reserves the right to charge a cancellation fee. The one-fourth of one percent (.25%) cancellation fee will be charged when the loan’s cancelled unless the property appraisal does not support the loan amount. Mortgage Lenders need to qualify mortgagors before submitting a reservation request to avoid payment of a cancellation fee.
Reservations for mortgage funds are on a first come-first, served basis and must include written certification from the NeighborWorks Great Falls that the borrowers have been selected to participate in the program.
Mortgage Loans shall be tendered for sale to the Board within 45 days following execution of the note by the mortgagor. If the Mortgage Lender fails to deliver such loans within 45 days after origination, the purchase price will be reduced by one-half of one percent (.5%) for each 30 days the loan is not delivered. To determine the accrued interest for purchase and interest on monthly mortgage payments, multiply the number of accrual days by the outstanding principal balance, and divide by the 360 day factor (for 5.0%)7200.00. To determine the accrued interest for payoff, multiply the number of accrual days by the outstanding principal balance, and divide by the 365 day factor 7300.00. The monthly remittances and payoffs can be wired or ACHed to:

WIRES: Wells Fargo Bank West, N.A.

ABA#102000076

For Deposit to CK ACCT #196897979

Credit: Montana Board of Housing

Servicer (3 digit #)________

Send only one wire (all series combined) for each remittance made during the month. You must complete the MBOH Remittance Detail Fax form listing the individual remittance amounts for each series (even if remitting only one series). Fax the form to both Wells Fargo and to the Montana Board of Housing. See the Remittance Detail Fax form for the appropriate fax numbers.

ACH: Wells Fargo Bank West, N.A.

ABA#102000076

CK ACCT #196897979

CR ACCT: MT BD OF HSG (Position 55-76; 22 characters)

Servicer (3 digit #)________(Position 40-54; 15 characters)

Send only one ACH remittance (all series combined) for each remittance made during the month. You must complete the MBOH Remittance Detail Fax form listing the individual remittances for each series (even if remitting only one series). Fax the form to both Wells Fargo and to the Montana Board of Housing. See the Remittance Detail Fax form for the appropriate fax numbers.

Mortgage Lenders will be required to provide the Board with information regarding Mortgage Loans when requested by the Board to comply with the requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
The Program will expire December 31, 2010.

NOTE FROM NWGF/NWMT:

LENDER SENDS A RESERVATION PACKAGE TO NWGF IN GREAT FALLS, THEN WHEN NWGF HAS ISSUED A RESERVATION LETTER THE LENDER CAN RESERVE THE FUNDS FROM MBOH

FIRST MORTGAGE LENDER PREPARES THE CLOSING DOCUMENTS FOR BOTH THE FIRST & SECOND MORTGAGES AND FUNDS BOTH LOANS.

LENDER SHOULD INSTRUCT THE TITLE COMPANY TO FORWARD THE LOAN PACKAGING FEE OF $350 DIRECTLY TO NWGF, 509 1ST AVE S, GREAT FALLS, MT 59401, WITH COPIES OF THE HUD SETTLEMENT STATEMENT AND PAGE 1 OF BOTH NOTES & TRUST INDENTURES.

Check the MBOH website for the subordinate Mortgage Note, Subordinate Mortgage Trust Indenture and specific Rider to the 1st mortgage Trust Indenture

10/1/07

WIRES:	Wells Fargo Bank West, N.A.

	ABA#102000076
	For Deposit to CK ACCT #196897979
	Credit: Montana Board of Housing
	Servicer (3 digit #)________
Send only one wire (all series combined) for each remittance made during the month. You must complete the MBOH Remittance Detail Fax form listing the individual remittance amounts for each series (even if remitting only one series). Fax the form to both Wells Fargo and to the Montana Board of Housing. See the Remittance Detail Fax form for the appropriate fax numbers.

ACH:	Wells Fargo Bank West, N.A.
	ABA#102000076
	CK ACCT #196897979
	CR ACCT: MT BD OF HSG (Position 55-76; 22 characters)
	Servicer (3 digit #)________(Position 40-54; 15 characters)
Send only one ACH remittance (all series combined) for each remittance made during the month. You must complete the MBOH Remittance Detail Fax form listing the individual remittances for each series (even if remitting only one series). Fax the form to both Wells Fargo and to the Montana Board of Housing. See the Remittance Detail Fax form for the appropriate fax numbers.