(2) The department of commerce provides all necessary staff and services to the board.

(3) Inquiries regarding the board may be addressed to the division administrator of the department of commerce or the chairman of the board of housing, 2001 Eleventh Avenue, Helena, Montana, 59620. Specific or general inquiries regarding the board and the division may be addressed to the division administrator of the department of commerce.

(4) A chart of the division organization is found in ARM 8.1.101 and incorporated by reference.

(1) The board of housing adopts and incorporates the Attorney General's model organizational and procedural rules for contested cases and declaratory rulings in ARM 1.3.211 through ARM 1.3.233, copies of which may be obtained by contacting the Board of Housing by mail at P.O. Box 200528, Helena, MT 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(1) All meetings of the board are open to the public, except to the extent any meeting is closed during discussion of a matter of individual privacy or litigation strategy in accordance with 2-3-203, MCA.

(2) Notice of the board's regular meetings shall be given by:

(a) posting a statement of the time, place, and agenda of the meeting on the state's electronic calendar at https://app.mt.gov/cal/html/event/statewide/; and

(b) mailing a notice to any interested parties who have notified the board in writing.

(3) Notice of the board's special or emergency meetings and notice of committee meetings shall be given by posting a statement of the time, place, and nature of the meeting on the state's electronic calendar at https://app.mt.gov/cal/html/event/statewide/.

(4) In the case of matters determined by the board to be of significant interest to the public, adequate and appropriate notice shall be given in accordance with 2-3-101 through 2-3-114, MCA.

(5)  The agenda for all board meetings shall include an item allowing opportunity for public comment on any public matter that is not on the meeting agenda and that is within the jurisdiction of the board.

(6)  The board may not take action on any matter discussed at a meeting unless specific notice of that matter is included on the meeting agenda and public comment has been allowed on that matter.

(7)  Minutes of board meetings shall be kept and shall be available for inspection by the public on the board's website www.housing.mt.gov.

(a)  The opportunity for public comment provided in (5), public comment received at a meeting, and comment received in accordance with ARM 8.111.204(3) shall be included in the minutes.

(b)  If the presiding officer closes a meeting pursuant to 2-3-203, MCA, minutes shall be kept of the closed portion of the meeting but may not be made available for public inspection except pursuant to a court order.

(8)  Meetings of the board are not contested cases or rulemaking proceedings unless specifically designated as such in written notice by the board.  Rulemaking proceedings, contested cases, and other adjudicatory proceedings are not board meetings for purposes of this rule.

This rule has been repealed.

(1)  The board welcomes and encourages public participation in its operations in accordance with the requirements of state law and board rules. 

(2)  The board will conduct contested cases and rulemaking in accordance with the applicable provisions of the Montana Administrative Procedure Act (MAPA).  The board will conduct its meetings and other non-MAPA proceedings in accordance with ARM 8.111.202 and other applicable board rules.

(3)  Members of the public may submit written comment to the board regarding any matter within the jurisdiction of the board by electronic mail to the email address provided on the board's website at www.housing.mt.gov.  To be considered in any board rulemaking, such comment must be submitted within the time specified in any relevant rule notice.  To be considered in any board meeting under ARM 8.111.202, a comment must be received at least two business days before the board meeting.

(4)  The board shall provide continuing policy, program, and technical information at the earliest practicable times and at places reasonably accessible to interested or affected persons and organizations so that they can make informal and constructive contributions to board decision-making.

(5)  The board shall maintain a current electronic list of interested persons and organizations including any who have requested inclusion on such list for the distribution of information such as that listed in (4) or notice of public hearings or meetings.  This shall be in addition to lists maintained as required by the Montana Administrative Procedure Act.  The board shall provide any interested persons and organizations that have requested inclusion on such list with information as provided in (4) and, in addition to providing general notice of board meetings in accordance with ARM 8.111.202, provide such interested persons and organizations with informal advance notice of its public hearings and meetings.

(6)  The board shall make available for public inspection all rules and all other written statements of policy or interpretations formulated, adopted, or used by the board in the discharge of its functions and, upon request, provide a copy of any rule.  Unless otherwise provided by statute, the board may require the payment of the cost of providing such copies.

(7)  The board's public records, not including confidential information, are open to public inspection in accordance with the applicable provisions of Title 2, chapter 6, part 10, MCA.  The board may charge a fee for fulfilling public record requests determined in accordance with 2-6-1006, MCA.

(2) The purpose in supplying additional public money will be to accomplish the objectives of:

(a) increasing the supply of funds to finance housing developments;

(b) increasing the number of adequate housing developments;

(c) providing housing developments that are within the financial capabilities of lower income persons and families; and

(d) increasing the activities, participation and cooperation of public and private enterprise and governmental agencies in providing decent, safe, and sanitary housing.

(a) the amount expressed as a percentage of total personal and family income, assets, and other financial resources that can be reasonably devoted to housing needs as defined in information provided by federal housing assistance programs and the private enterprise system;

(b) the size of families and allowable exemptions and deductions to be used in determining adjusted gross annual income as defined in federal housing assistance programs and federal and state tax allowances;

(c) the needs of particular lower income persons and families, such as the elderly and physically and mentally handicapped;

(d) the eligibility standards of current federal housing assistance programs;

(e) the costs and availability of housing in rural and urban areas provided in information supplied by lending institutions, realtors, homebuilders, governmental agencies and public interest groups; and

(f) the ability of persons and families to pay the cost of available housing or of new housing provided by private enterprise, in terms of the percentage of adjusted gross annual income required for that purpose.

(2) Adjusted gross annual income limits specified in federal assistance programs utilized by the board in any of its programs will be observed where applicable.

(3) In general, the costs of housing for the purpose of establishing adjusted gross annual income limits will be deemed to be an amount necessary to pay for:

(a) in the case of homeowners, the annual costs of amortization of the permanent loan mortgage, together with the annual costs of real estate taxes, including any assessments, fire and extended property insurance coverage, and utilities, except for telephone; or

(b) in the case of tenants, the annual amount of rental charges plus the annual costs of utilities, except for telephone.

(4) The board may waive income limits in its mortgage purchase program, to enable the board to purchase existing mortgage loans without regard for its current income limits.

(1) From time to time the board may engage in programs to finance housing developments within the state. Specific programs authorized by 90-6-108, MCA, are:

(a) the making of loans to lending institutions;            

(b) the purchasing of existing mortgages from lending institutions;

(c) the making and undertaking of commitments to make or purchase new mortgages made by lending institutions to qualified and eligible borrowers; and

(d) the making of direct mortgage loans to lower income persons and families.

(2) The board will provide all financing programs through qualified and approved lending institutions in the state. The board may engage in a specific program to finance housing developments only when it finds that the program will:

(a) reduce the shortage of housing developments at rentals or prices affordable by lower income persons and families;

(b) increase the supply of mortgage financing or the supply of housing developments at rentals or prices affordable by lower income persons and families;

(c) utilize financially responsible housing sponsors who will provide well-planned, well-designed housing developments;

(d) provide housing developments that meet state and local building and housing codes, local and area wide government plans and regulations for land use and housing, and applicable federal standards; and

(e) be used to finance only primary residences for lower income persons and families. The direct loan program may be engaged in only when it is necessary to qualify for federal funds.

(3) No person or family qualifying for a loan under the board's single family program may obtain more than one loan at a time under the board's programs, except that a person or family may qualify for a board down payment assistance loan in addition to a first priority mortgage loan on the same property.

(4) All funds provided by the board from the sale of bonds will be controlled by the definitions, terms and conditions of a specific program trust indenture, adopted by the board. All board funds will be controlled by the terms and conditions of applicable state and federal law, Title 90, chapter 6, part 1, MCA, these rules then in effect, the applicable trust indenture and its supplemental trust indentures, and any agreements and contracts deemed necessary by the board.

(5) The board will restrict the financial return and benefits under its programs to that necessary to induce the effective participation and cooperation of public and private enterprise and governmental agencies and to meet its purpose and objective.

(6) All housing developments financed by the board that utilize federal assistance programs will be governed by the appropriate federal rules and regulations.

(1) All housing developments financially assisted by the board will be open to lower income persons and families regardless of race, color, religion, sex, marital status, national origin or ancestry.

(2) All persons and firms and their agents involved in housing developments assisted by the board will provide an equal opportunity for employment, ownership, and occupancy without discrimination based on race, color, religion, sex, marital status, national origin, or ancestry.

(3) All persons and firms and their agents involved in housing developments assisted by the board will take affirmative action regarding equal opportunity requirements of the board and the United States.

(4) All financial assistance provided by the board will require the recipient to maintain adequate records and accounts as deemed necessary by the board. The board may require financial and other reports sufficient to account for the proper utilization of board funds and to monitor meeting of board purposes and objectives. All records and accounts shall be open to inspection by the board or its agents and the legislative auditor.

(5) Subject to board oversight, board staff will establish a schedule of fees and charges for each specific program as required to cover board expenditures of operating the program The board's schedule of fees and charges is available on the board's website.

(6) The board will require written contracts and agreements with qualified and approved sponsors and lending institutions as participants in board programs. Contracts and agreements will be provided for each specific program.

(7) The board may establish the sum total of all costs incurred in housing developments financed by its programs when determined necessary by the board. Any limitations on housing development costs will be determined for each specific program.

(8) The board may establish a fixed percentage of occupancy for lower income persons and families in housing developments financed by its programs when determined necessary by the board.

(9) The board may supervise housing sponsors of housing developments financially assisted by its programs according to the criteria in 90-6-110, MCA, when and to the extent the board determines it is necessary.

(1) A public or private entity ("applicant") maintaining an office in the state and authorized by law to make or participate in making new, residential mortgage loans may apply, in writing, for designation as an approved lender for board programs.

(2) All applications must include:

(a) a list of the applicant's principal officers and the officers authorized to execute contracts and other documents;

(b) a list of the personnel principally involved in making and servicing mortgage loans, the office address, phone number, description of qualifications, and a copy of each person's mortgage broker and loan originator license if applicable;

(c) evidence of errors and omissions insurance and fidelity insurance, each of which must be in an amount not less than the amount required by the Federal National Mortgage Association (FNMA) for its participating lenders;

(d) if the applicant is regulated by one of the regulatory agencies defined in ARM 8.111.305B, the applicant's most recent regulatory agency reports covering the four quarters immediately preceding the date of application which must indicate, based on generally accepted accounting principles (GAAP), total capital as a percentage of average assets of at least 6% or meet all applicable capital requirements of the regulatory agency and a minimum net worth of $1,000,000; or, if the applicant is not regulated by a regulatory agency defined in ARM 8.111.305B, the applicant's audited financial statements for the applicant's most recently completed fiscal year and financial statements prepared within 60 days of submission for at least a six-month period immediately preceding the date of the financial statements comprised of a balance sheet, year-to-date income statement, and a statement of change which must indicate, based on generally accepted accounting principles (GAAP), total capital as a percentage of average assets of at least 6%, and a minimum net worth of $1,000,000;

(e) evidence of existence of the business entity for at least one year prior to the date of application (also applicable to existing approved lenders restructured by the lender's regulatory agency or through reorganization); and

(f) designation of the office or offices within the state of Montana at which residential loans using board programs will be made, including the address, telephone number, facsimile number, and e-mail address of each office.

(3) The board, in its discretion, may approve or deny an applicant based on the financial information submitted pursuant to (2)(d), the applicant's performance in the marketplace, and the requirements of Title 90, chapter 6, MCA, the applicable trust indenture, and the rules then in effect. A lender approved under this section will be notified and advised of the conditions of its approval.

(4) Each year or as may be requested by the board, an approved lender participating in the board's programs shall submit:

(a) if the lender is not regulated by one of the regulatory agencies defined in ARM 8.111.305B, its audited financial statements for its most recently completed fiscal year or, if the lender is regulated by one of the regulatory agencies defined in ARM 8.111.305B, the lender's regulatory agency reports for the previous four quarters, demonstrating that the financial standards described in (2)(d) continue to be met;

(b) an updated list of the officers required in (2)(a);

(c) an updated list of the personnel required under (2)(b);

(d) an updated list of the offices required under (2)(f); and

(e) evidence of continuing compliance with (2)(c).

(5) An applicant failing to meet the requirements of this rule may not submit a new application for approval as a lender for a minimum period of 180 days from the date of its previous application.

(6) The relationship between the board and an approved lender is contractual in nature. The approved lender must comply with the provisions of the board's Mortgage Purchase and Servicing Guide as the same may be amended from time to time. The board may terminate a lender's approval to make board loans at any time without cause and without a termination fee. The board will terminate a lender's approval to make board loans for repeated or material failure of the lender to comply with the provisions of the board's Mortgage Purchase and Servicing Guide. Board staff may suspend a lender's approval to make board loans on a temporary basis for a lender's failure to comply with the board's Mortgage Purchase and Servicing Guide. If the lender is unable or fails to correct the noncompliance with the guide, board staff will refer the suspension to the board for appropriate action.

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(1) A public or private entity which has as its function the servicing of mortgage loans secured by residential real estate and maintains an office in the state may apply to be an approved servicer for board mortgage loans ("applicant").

(2) All applications shall be in writing and include the following:

(a) identification of the location where board loans will be serviced, which information must be kept current at all times;

(b) evidence of existence of the business entity for at least one year prior to the date of application (also applicable to an existing approved servicer restructured by the servicer's regulatory agency or through reorganization);

(c) a list of the applicant's principal officers, addresses and phone numbers, and designation of the officers authorized to execute contracts and other documents;

(d) a list of the applicant's personnel principally involved with servicing mortgage loans, the office address, phone number, and a description of qualifications;

(e) evidence of errors and omissions insurance and fidelity insurance, each of which must be in an amount not less than the amount required by the Federal National Mortgage Association (FNMA) for its participating servicers;

(f) if the applicant is regulated by one of the regulatory agencies defined in ARM 8.111.305B, the applicant must submit the applicant's regulatory agency reports covering the four quarters immediately preceding the date of application which must indicate, based on generally accepted accounting principles (GAAP), total capital as a percentage of average assets of at least 6% or meet all applicable capital requirements of the regulatory agency and a minimum net worth of $1,000,000; or if the applicant is not regulated by a regulatory agency defined in ARM 8.111.305B, the applicant's audited financial statements for the applicant's most recently completed fiscal year and financial statements prepared within 60 days of submission for at least a six-month period immediately preceding the date of the financial statements comprised of a balance sheet, year-to-date income statement, and a statement of change which must indicate, based on generally accepted accounting principles (GAAP), total capital as a percentage of average assets of at least 6%, and a minimum net worth of $1,000,000; and

(g) evidence that the applicant is an approved servicer of the FHA, VA, RD, or a private mortgage insurer approved by the board.

(3) A previously approved servicer that is restructured by the servicer's regulatory agency or through corporate reorganization must reapply for designation as an approved servicer. The restructured servicer is exempt from the requirements in (2)(b) - providing evidence of one year of existence, and (2)(f) - submittal of financial statements for the preceding six-month period but shall submit financial statements for the period from the date the servicer was restructured or reorganized through the date of application.

(4) The board, in its discretion, may approve or deny an applicant based on the financial information submitted pursuant to (2)(e), the applicant's performance in the marketplace, and the requirements of Title 90, chapter 6, MCA, the applicable trust indenture, and the rules then in effect. A servicer approved under this section will be notified and advised of the conditions of its approval.

(5) Each year or as may be requested by the board, an approved servicer shall submit:

(a) if the servicer is not regulated by one of the regulatory agencies defined in ARM 8.111.305B, its audited financial statements for its most recently completed fiscal year, or, if the servicer is regulated by one of the regulatory agencies defined in ARM 8.111.305B, the servicer's regulatory agency reports for the previous four quarters, demonstrating that the financial standards described in (2)(d) continue to be met;

(b) an updated list of the office(s) required in (2)(a);

(c) an updated list of the officers required under (2)(c);

(d) an updated list of the personnel required under (2)(d);

(e) evidence demonstrating that the servicer has internal controls providing for security of board funds and confidentiality of information related to board mortgagors, which evidence can be the servicer's most recent Statement of Auditing Standard 70 Report, equivalent regulatory agency report, or an equivalent report from an outside auditor; and

(f) evidence of continuing compliance with (2)(e).

(6) An applicant failing to meet the requirements of this rule may not submit a new application for approval as a servicer for a minimum period of 180 days from the date of its previous application.

(7) An approved servicer must maintain at least one office within the state where a board borrower can make payments, obtain relevant information about the borrower's loan, and obtain resolution of servicing issues regarding the borrower's loan. If the servicer elects to service board loans outside of the state, the servicer must either have the capability of providing loan documents requested for audit purposes by electronic means or reimburse the board for the cost of its auditors to travel to and conduct an audit at the out-of-state servicing site.

(8) The relationship between the board and an approved servicer is contractual in nature. The approved servicer must comply with the provisions of the board's Mortgage Purchase and Servicing Guide as the same may be amended from time to time. The board may terminate a servicer's approval to service board loans at any time without cause and without a termination fee. The board will terminate a servicer's approval to service board loans for repeated or material failure of the servicer to comply with the provisions of the board's Mortgage Purchase and Servicing Guide.

(a) office of thrift supervision;

(b) federal deposit insurance corporation ("FDIC") ;

(c) federal reserve system;

(d) office of controller of currency;

(e) national credit union administration ("NCUA") .

(2) Any reference in these regulations to "regulatory agency" shall refer only to the agencies listed herein or their successors.

(3) Any requirement in these regulations that an entity may meet conditions imposed by this act by supplying submissions previously provided to regulatory agencies, shall only apply if the submission is to one of the agencies defined in this regulation.

(2) Annually, each qualified lending institution and loan servicer, in addition to all other requirements contained in the act and applicable regulations, must provide an officer's statement certifying that the company continues to meet all of the qualifications to remain a lender or servicer.   A form of the certificate is available at the office of the board of housing.

(2) Housing sponsors will certify all actual housing sponsors' expenditures to the board.

(1) The board may from time to time designate areas of chronic economic distress within the state which it will consider in establishing its programs to finance housing developments. "Areas of chronic economic distress" means an area of the state (town, city, county or other defined geographical area) which has, within its designated limits, persons and families of lower income who require assistance under the Housing Act of 1975, as determined by the board and taking into consideration:

(a) The condition of the housing stock, including the age of the housing and the number of abandoned and substandard residential units;

(b) The need of area residents for owner financing under a mortgage revenue bond issue as indicated by low per capita income, a high percentage of families in poverty, a high number of welfare recipients, and high unemployment rates;

(c) The potential for use of owner financing under a mortgage revenue bond issue to improve housing conditions in the area;

(d) The existence of a housing assistance plan which provides a displacement program and a public improvements and services program (similar to the housing assistance plan (HAP) required by the department of housing and urban development under the community development block grant program (42 U.S.C. 5301, et seq.) ) ;

(e) The need of area residents in areas which have experienced a sudden increase in population growth which results in social problems, especially for persons and families of lower income;

(f) The need of area residents in areas which have experienced a lack of capital in the local lending institutions which provide long term financing for housing; and

(g) The need of area residents in undeveloped areas of the state which have experienced a shortage of decent, safe and sanitary housing which is within the financial capabilities of lower income persons and families.

(2) These rules shall be liberally construed to secure just, speedy, and inexpensive determination of the issues presented.

(3) If further information is needed as to procedures or instructions on reverse annuity mortgage loans, it will be furnished by the board.

(1) "Appraisal" means an opinion of a qualified FHA appraiser on the nature, quality, and value of specific interests in identified real estate approved for Federal Housing Administration (FHA) purposes.

(2) "Family income" means the income of all adult members of the household, other than full-time students. The income is the amount of anticipated total income from all sources for the subsequent 12-month period from application. This includes nontaxable income such as social security and municipal bond interest. Any investment or business losses cannot be subtracted in determining gross income. An exclusion will be allowed for certain defined, nonreimbursed, ongoing, medical, and independent living expenses.

(3) "Permanent vacation of the secured property" means any period when the mortgagor (or the last to survive) does not live in the residence for a period of 180 consecutive days.

(4) "FHA" means Federal Housing Administration.

(1) All applicants for reverse annuity mortgage loans must complete the required counseling.

(2) Information as to the required counseling is available by contacting the Board of Housing by mail at P.O. Box 200528, Helena, MT 59620-0528 or by telephone at (406) 841-2845 or (406) 841-2838.�

(1) To be eligible for a reverse annuity mortgage loan, the applicant must do the following:

(a) successfully complete the required counseling (information about required counseling is available by contacting the Board of Housing by mail at P.O. Box 200528, Helena, MT 59620-0528 or by telephone at (406) 841-2845 or (406) 841-2838);

(b) submit a reverse annuity mortgage application package to the board;

(c) agree to allow the board to obtain a current FHA appraisal and title insurance policy for the property;

(d) agree to pay for all closing costs including, but not limited to, the appraisal, title insurance policy, document recording, and other closing costs;

(e) assure that the reverse annuity loan is in first lien position at loan closing;

(f) be at least 68 years of age or older, except as provided on a case-by-case basis by the Board of Housing;

(g) meet the income limits as set by the board;

(h) if the property is jointly owned, both borrowers must meet all of the conditions;

(i) if property is jointly owned, it must be held as joint tenants, with rights of survivorship.

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(2) A loan amount may not exceed 80% of the appraised value of the property. The board will set the maximum dollar amount of a loan which amount may be changed by the board. The minimum dollar amount of a loan is $15,000.

(1) Repayment of the reverse annuity mortgage loan is not required so long as the borrower, or the last surviving borrower, has not permanently vacated the secured property and no event of default has occurred as provided in the loan documents.

(2) The borrower may pay the outstanding loan balance in full at any time without penalty.

(3) The board may include in the reverse annuity mortgage loan documents such terms, conditions, and requirements as are usual and customary in similar loan transactions and which are designed to protect the value of the property securing the loan or to assure repayment of the loan.

(4) The loan becomes due and payable and any remaining advances terminate upon the occurrence of any of the following events:

(a) the death of the last surviving borrower;

(b) sale or transfer of the property to anyone other than an original borrower;

(c) permanent vacation of the secured property by the borrower; or

(d) any other act or occurrence which constitutes an event of default under the mortgage instrument securing the loan.

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(1) The board may disburse a portion of the loan amount as a cash advance at closing for any one or more of the following purposes: 

(a)  satisfaction of any liens on the property; 

(b)  necessary repairs to the property;

(c)  actual loan closing costs, including but not limited to appraisals, title policies, recording of documents, and other closing costs; and

(d)  other items to assist the borrower to continue residing in the property, including but not limited to, medical expenses, transportation expenses (including automobile purchase and loan payoff), payoff of credit card debt, and supportive and specialized care services.

(2)  To receive a cash advance at closing, the borrower must submit a request in writing on forms supplied by the board.

(3)  A cash advance for any of the purposes specified in (1) may be approved:

(a)  in an amount not to exceed $30,000 by board staff along with other loan approvals; and

(b)  in an amount exceeding $30,000 by the board in a duly noticed meeting on a case-by-case basis.

(4)  A cash advance may be disbursed either to the borrower or to third parties as directed by the borrower and approved by the board.  All cash advances disbursed at closing shall be added to the initial loan balance.

(1) These rules are enacted by the board to provide explanation and guidance for loans from the housing Montana fund loan account authorized by 90-6-133(2) and 90-6-134, MCA, pursuant to the criteria and procedures described in ARM 8.111.503 through 8.111.507.

When used in these rules, unless the context clearly requires a different meaning:

(1) "Application" means the Montana Board of Housing Loan Process published by the board, a copy of which may be obtained by contacting the board by mail at P.O. Box 200528, Helena, Montana 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(2) "Board" means the Montana Board of Housing created by 2-15-1814, MCA.

(3) "Median income" means median income as determined by the U.S. Department of Housing and Urban Development, with adjustments for smaller or larger families.

(4) "HMF loan" means a loan made from the housing Montana fund loan account authorized by 90-6-133(2)(a) and 90-6-134, MCA, and described in ARM 8.111.503 through 8.111.507.

(5) "Rural area" means any area within the state that is not within the city limits of Billings, Bozeman, Butte, Great Falls, Helena, Kalispell, or Missoula.

(6) "Small city or town" means any city or town within the state that is not within the city limits of Billings, Bozeman, Butte, Great Falls, Helena, Kalispell, or Missoula.

(1) The board may make an HMF loan for the following purposes:

(a) matching funds for public or private funds available from other sources for the development of housing for low-income or moderate income households;

(b) bridge financing necessary to make development of housing for low-income or moderate income households feasible;

(c) acquisition of existing housing stock for the purpose of preservation of or conversion to housing for low-income or moderate income households;

(d) preconstruction technical assistance as described in 90-6-134(4), MCA, for housing for low-income and moderate income households in rural areas and small cities and towns;

(e) acquisition of land for housing developments, land banking, and land trusts; and

(f) short-term, site-based housing vouchers for needy individuals.

(2) An HMF loan may not be made that will replace existing or available funding for eligible activities.

(1) Organizations eligible for HMF loans are agencies or programs of state government, local governments, tribal governments, local housing authorities, nonprofit community or neighborhood based organizations, regional or statewide nonprofit housing assistance organizations, and for-profit housing developers.

(2) The applicant must document to the satisfaction of the board experience in the development or management of housing for low and/or moderate income households. Criteria considered by the board includes, but are not limited to:

(a) number of years experience in development or management of housing for low and/or moderate income households;

(b) number of housing developments and units developed or managed;

(c) involvement in other low and moderate income housing programs of the board, federal agencies and tribal and local governments; and

(d) successful completion of other housing development projects.

(1) An application must be submitted using the board's uniform application and loan supplement.

(2) At the time the application is submitted, an applicant must also submit:

(a) a description of the efforts made by the applicant to coordinate the loan with other housing assistance programs administered by the board, the federal government, state agencies, tribal government, local public housing authorities, and local governments;

(b) an explanation of how the loan will not replace existing or available funding for the project, including a detailed description of the public benefit obtained from program funding, including construction phase funding, if applicable, compared to funding from other existing and available funding sources with substantially similar terms and conditions; and 

(c) a description of the priority the lien of the board will have in relationship with the liens of other lenders on the project.

(3) Applications that are substantially incomplete will not be processed but will be returned to the applicant.

(4)  Applicants must demonstrate project development progress through submission of quarterly progress reports from the time of preliminary loan application approval through loan closing.  Quarterly progress reports must be submitted in accordance with the requirements of and using the quarterly report form for the Housing Credit program. Copies of the housing credit quarterly report form and requirements may be obtained by contacting the board by mail at P.O. Box 200528, Helena, Montana 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(1) An HMF loan shall:

(a) provide for complete amortization at maturity through substantially equal monthly payments of principal and interest;

(b) have an amortization period not to exceed 40 years and a term not to exceed 30 years, both as approved by the board based upon the loan amount, additional project funding sources and obligations, and other relevant factors;

(c) bear interest at an annual rate:

(i) not less than 2% for a project that is for households of 30% or less of median income in the area;

(ii) not less than 3% for a project that is for households between 31% and 50% of median income in the area;

(iii) not less than 4% for a project that is for households between 51% and 80% of median income in the area;

(iv) not less than 6% for a project that is for households between 81% and 95% of median income in the area; and

(v) a rate blended from those rates provided for in (1)(c)(i), (ii), (iii), and (iv) for a project that contains units for different area median income household groups.

(d) be subject to a late charge of 4% of the monthly payment due for each monthly payment that is not made within 15 days of its due date; and

(e) be secured by a lien (perfected either by a mortgage or a trust indenture) against the real property benefited by the loan.

(2)  As a condition of the loan, the project owner must commit to income targeting and maximum rent requirements and restrictions and related transfer, compliance, and enforcement restrictions, through execution and recording of a regulatory agreement establishing such provisions as covenants running with the project property for the longer of thirty years or the duration of the loan obligation.  The board may waive such requirement if the project is subject to a substantially similar agreement in favor of the board under the Housing Credit or another board loan program.

(3)  The board may approve HMF loans:

(a)  to provide permanent financing, with loan closing and disbursement occurring after completion of construction and three months of stabilized occupancy; or

(b)  on a case-by-case basis, to provide financing prior to completion of construction, where the applicant demonstrates and the board finds additional public benefit from such financing compared to funding from other existing and available funding sources with substantially similar terms and conditions, such as but not limited to allowing project financial feasibility or providing for an increased number of affordable housing units. As a condition of approving such pre-construction financing, the board may require additional security, risk management measures, and other loan terms, including but not limited to additional collateral and third-party construction and disbursement monitoring obtained or provided and paid for by the borrower, investor, or other lender.

(1) The board will review the following criteria in considering an application for an HMF loan:

(a) the applicant's experience in managing or developing housing for low and/or moderate income households;

(b) the percentage of the units in the project that will be available for low and/or moderate income households;

(c) the need for low and moderate income housing in the community where the project is to be located; and

(d) the priority to be given the board's lien for the HMF loan in relation to the amount of the HMF loan and the priority given the liens and the amount of the loans of the other lenders on the project.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) These rules are enacted by the Board of Housing to provide explanation and guidance for the allocation of low income housing tax credits under Section 42 of the Internal Revenue Code of the United States (26 U.S.C. 42). The board has been designated as the agency to perform the tax credit allocation functions for the State of Montana pursuant to 26 U.S.C. 42 by Executive Order No. 2-87 dated May 1, 1987. (History: 90-6-106, MCA; IMP, 90-6-104, MCA; NEW, 2007 MAR p. 1543, Eff. 10/5/07.)

When used in these rules, unless the context clearly requires a different meaning:

(1) "Board" means the Montana Board of Housing created by 2-15-1814, MCA.

(2) "Project" means the low income residential rental building, or buildings, that are the subject of an application for housing credits.

(3) "QAP" means the board's "Housing Credit Program 2025 Qualified Allocation Plan," which sets forth the application process and selection criteria used by the board for evaluation and selection of projects to receive awards for allocation of housing credits for calendar year 2025. The board adopts and incorporates by reference the Housing Credit Program 2025 Qualified Allocation Plan, copies of which may be obtained by contacting the Board of Housing by mail at P.O. Box 200528, Helena, MT 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(5) "Tax credit" or "housing credit" means the federal low income housing tax credit for owners of qualifying rental housing which meets certain low income occupancy and rent limitation requirements pursuant to 26 U.S.C. 42.

(1) The board's processes, criteria, and related procedures and requirements applicable to application, evaluation, and selection of projects for allocation of housing credits and for housing credit compliance are set forth in the QAP.

(2) Copies of applications and other information submitted to the board in connection with applications are available to other applicants for housing credit projects and members of the public to the extent provided and according to the procedures specified in the board's information request and release policy, available on the Department of Commerce web site at https://commerce.mt.gov. 

(3) At one or more regularly scheduled board meetings each year, as specified in or otherwise designated according to the QAP, the board will hear public comment and consider award of housing credit allocations in accordance with the QAP. The award of housing credit allocations is not a contested case and the award meeting is not a contested case hearing under Title 2, chapter 4, part 6, MCA.

(1) These rules are adopted to implement the Montana Veterans' Home Loan Act, Title 90, chapter 6, sections 1 through 6, MCA. These rules provide explanation and guidance to loan applicants and participating lenders and servicers.

As used in these rules, the following words and phrases have the following meanings:

(1) "Act" means the Montana Veterans' Home Loan Act, Title 90, chapter 6 sections 1 through 6, MCA.

(2) "Board" means the Montana Board of Housing established under 2-15-1814, MCA.

(3) "Deceased eligible veteran" means an eligible veteran who was killed in the line of duty while in military service.

(4) "Eligible veteran" means an individual who is in military service or has been in military service and was discharged under honorable conditions.

(5) "First time home buyer" means an individual who has not previously owned an interest in real property occupied by the individual as their primary residence. An applicant must provide proof of first time home buyer status satisfactory to the board.

(6) "Guide" means the board's Mortgage Purchase and Servicing Guide referenced in ARM 8.111.305.

(7) "Honorable conditions" means a discharge or separation from service characterized by the applicable military authority as under honorable conditions. The term includes honorable discharge and general discharge, but does not include a dishonorable discharge or other administrative discharge characterized by military regulation as other than honorable.

(8) "Montana Resident" means an individual who has established and maintains a permanent place of abode within the state of Montana and has not established residence elsewhere although the individual may be temporarily absent from the state. An applicant must provide proof of Montana residence satisfactory to the board.

(9) "Program" means the Montana Veterans' Home Loan Program established by the Act and administered by the board pursuant to these rules.

(10) "Property" means the residential real property purchased or to be purchased with a veteran's loan.

(11) "Military Service" means:

(a) Membership in the Montana National Guard;

(b) Membership in the federal reserve forces of the armed forces of the United States pursuant to Title 10 of the U.S. Code; or

(c) Service on federal active duty pursuant to Title 10 of the U.S. Code.

(12) "Veteran's loan" means a mortgage loan made pursuant to the Act and these rules.

(1) To qualify for a veteran's loan, an applicant must:

(a) be a Montana resident;

(b) be an eligible veteran or a deceased eligible veteran's surviving spouse who is not and has not remarried since the death of the deceased eligible veteran;

(c) be a first time home buyer; and

(d) have successfully completed a homebuyer education class approved by the board.

(2) There is no income limit for veteran's loan eligibility.

(1) Application for a veteran's loan must be made using the same process established by the board for regular bond program loans, as specified in the guide.

(2) In addition to other documents required by the guide, the application materials submitted to the participating lender must include:

(a) a completed application on an application form approved by the board; and

(b) satisfactory proof of eligibility under ARM 8.111.703.

(3) Additional information and forms for the program may be obtained by contacting the board by mail at P.O. Box 200528, Helena, Montana 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov. Such additional information and forms include but are limited to requirements for satisfactory proof of eligibility, requirements for satisfactory proof of Montana residence and first-time home buyer status, board-approved homebuyer education classes, participating lender information, lender reservation and purchase forms, current statewide allowable purchase price, and current program interest rates.

(1) The program will be governed by and subject to the Act and these rules.

(2) Veteran's loans shall be originated and serviced using the processes established for the board's regular bond program loans, as specified in the guide, subject to the following:

(a) where the provisions of the guide are inconsistent with the Act or these rules, the provisions of the Act or these rules shall govern;

(b) terms defined in the Act or these rules shall have the meaning provided in the Act or these rules where used in the guide; and

(c) the sections of the guide pertaining to requirements of the Internal Revenue Service and the bond indentures, as more specifically identified in the guide, shall not apply for purposes of the veteran's loan program.

(3) To participate as a lender under the veteran's loan program, a lender must be a board-approved participating lender under the requirements of ARM 8.111.305. The lender must comply with the applicable provisions of the guide.

(4) A single lender may reserve or originate no more than ten veteran's loans until at least a total of $10 million in loans has been originated by all lenders under the veteran's loan program. The board may waive the ten-loan limit where necessary to provide an opportunity for an eligible applicant to obtain a loan where the loan is not otherwise available to the applicant from another participating lender. Once a total of $10 million in loans has been originated by all lenders under the veteran's loan program, the ten-loan limit shall no longer apply to any lender.

(5) Veteran's loans will be serviced by the board or its designee. Servicing fees shall be as set by the board and posted in the program terms and conditions and on the board's website. A servicing release premium will be paid by the board to the lender.

(6) Lenders must provide the board and the legislative auditor access to all records and documents related to veteran's program loans.

(1) The property to be purchased with a veteran's loan must be:

(a) located in the state of Montana;

(b) actually occupied by the borrower as the borrower's primary residence;

(c) if manufactured housing, de-titled and fixed to a permanent foundation.

(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.

(1) These rules are enacted by the board to provide explanation and guidance for loans from the coal trust account authorized by 17-6-308(6), MCA, and Title 90, chapter 6, part 1, MCA, pursuant to the criteria and procedures described in ARM 8.111.801 through 8.111.807.

When used in these rules, unless the context clearly requires a different meaning:

(1) "Application" means the Montana Board of Housing Loan Process published by the board, a copy of which may be obtained by contacting the board by mail at P.O. Box 200528, Helena, Montana 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(2) "Board" means the Montana Board of Housing created by 2-15-1814, MCA.

(3) "CTMH" means the Coal Trust Multifamily Homes program authorized by 17-6-308(6), MCA, and Title 90, chapter 6, part 1, MCA.

(4) "Low-income" means households whose incomes do not exceed 80% of the median income in the area as determined by the US Department of Housing and Urban Development with adjustments for smaller and larger families.

(5) "Moderate-income" means households whose incomes are between 81% and 95% of the median income for the area as determined by the US Department of Housing and Urban Development with adjustments for smaller and larger families.

(6) "Multifamily rental housing project" means a project that is two or more rental units.

(7) "Total development cost" means all costs shown in the application on the Uses of Funds line "Total Projects Costs without Grant Admin." Total project cost does not include grant administration costs.

(1) The board may make a CTMH loan for the development and preservation of multifamily rental housing projects that provide housing for low-income or moderate-income households and for the following purposes:

(a) development and construction of multifamily rental housing projects;

(b) acquisition and/or rehabilitation of existing multifamily rental housing projects for the purpose of preservation of or conversion to housing for low-income or moderate-income households;

(c) acquisition of land for multifamily rental housing projects including land trusts and for mobile or manufactured homes;

(d)  development or preservation of mobile home parks as defined in 70-33-103, MCA; or

(e)  other purposes authorized in 90-6-137, MCA, which the board determines are consistent with CTMH loan program objectives, requirements, and which provide sufficient assurances of repayment of coal trust funds.

(2) A CTMH loan may not be used to replace existing or available sources of funding for eligible loan activities.

(3) Projects funded with a CTMH loan must be subject to property taxes, except those projects located on tribal lands.

(1) Organizations eligible for CTMH loans are agencies or programs of state government, local governments, tribal governments, local housing authorities, nonprofit community or neighborhood based organizations, regional or statewide nonprofit housing assistance organizations, and for-profit housing developers.

(1) An application must be submitted.

(2) At the time the application is submitted, an applicant must also submit:

(a) a description of the efforts made by the applicant to coordinate the loan with other housing assistance programs administered by the board, the federal government, state agencies, tribal government, local public housing authorities, local governments, and private entities;

(b) an explanation of how the loan will not replace existing or available funding for the project, including a detailed description of the public benefit obtained from program funding, including construction phase funding, if applicable, compared to funding from other existing and available funding sources with substantially similar terms and conditions; and

(c) for mobile home park projects, documentation of lot rents for comparable mobile home parks in the market area and an explanation demonstrating that proposed lot rents will be reasonable and affordable for prospective residents.

(3) Applications that are substantially incomplete as determined by the board staff will not be processed but will be returned to the applicant. 

(4)  Applicants must demonstrate project development progress through submission of quarterly progress reports from the time of preliminary loan application approval through loan closing.  Quarterly progress reports must be submitted in accordance with the requirements of and using the quarterly report form for the Housing Credit program.  Copies of the housing credit quarterly report form and requirements may be obtained by contacting the board by mail at P.O. Box 200528, Helena, Montana 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(1) A CTMH loan shall:

(a) provide for complete amortization at maturity through substantially equal monthly payments of principal and interest;

(b) have an amortization period not to exceed 40 years and a term not to exceed 30 years, both as approved by the board based upon the loan amount, additional project funding sources and obligations, and other relevant factors;

(c) be subject to a late charge of 4% of the monthly payment due for each monthly payment that is not made within 15 days of its due date;

(d) be secured by a first priority mortgage or trust indenture on the project property; and

(e) not exceed 95% of total development cost.

(2) The board and the CTMH loan recipient must each pay half of the loan servicing fees as determined by the board.

(3)  A CTMH loan shall bear interest at an annual rate equal to .0625% plus the Average Coal Trust Investment Performance rate effective as of preliminary loan application submission, or at the Average Coal Trust Investment Performance rate effective within 30 days before loan closing, if such later effective rate is at least 1/8 of a percent lower than the rate effective at preliminary loan application submission. For purposes of this rule, the Average Coal Trust Investment Performance rate is such rate determined by the Board of Investments and posted on its website at https://investmentmt.com/_shared/LoanPrograms/Rates/In-State-Rate-Sheet-MCHP.pdf.

(4)  At least 75% of the project units or lots must be targeted to residents at or below 95% of area median income. 

(5)  Maximum rents must apply to project units or lots.

(a)  For projects consisting of mobile home parks, land trusts, or land for mobile or manufactured homes, maximum rents must be reasonable and affordable to prospective residents, as determined by the board based upon the documentation and explanation submitted by the applicant and other relevant information obtained by the board.

(b)  For other projects, maximum rents will be calculated according to income targeting standards applicable to the Housing Credit program.  Copies of the income targeting standards for the Housing Credit program may be obtained by contacting the board by mail at P.O. Box 200528, Helena, Montana 59620-0528, by telephone at (406) 841-2840, or at the board's web site www.housing.mt.gov.

(c)  As a condition of the loan, the project owner must commit to the income targeting and maximum rent requirements and restrictions in accordance with (3) and (4), and related transfer, compliance and enforcement restrictions, through execution and recording of a regulatory agreement establishing such provisions as covenants running with the project property for the longer of thirty years or the duration of the loan obligation.  The board may waive such requirement if the project is subject to a substantially similar agreement in favor of the board under the Housing Credit or another board loan program.

(6)  The board may approve CTMH loans:

(a)  to provide permanent financing, with loan closing and disbursement occurring after completion of construction and three months of stabilized occupancy; or

(b)  on a case-by-case basis, to provide financing prior to completion of construction, where the applicant demonstrates and the board finds additional public benefit from such financing compared to funding from other existing and available funding sources with substantially similar terms and conditions, such as but not limited to allowing project financial feasibility or providing for an increased number of affordable housing units.  As a condition of approving such pre-construction financing, the board may require additional security, risk management measures, and other loan terms, including but not limited to additional collateral and third-party construction and disbursement monitoring obtained or provided and paid for by the borrower, investor, or other lender.

(1) The board will review the following criteria in considering an application for an CTMH loan:

(a) the applicant's experience in managing or developing housing for low-income and/or moderate-income households;

(b) the percentage of the units in the project that will be available for low-income or moderate-income households;

(c) the need for low-income and moderate-income housing in the community where the project is to be located;

(d) project location;

(e) the loan size and whether it maximizes the geographical distribution of the loan program; and

(f) the use of other funds to leverage the use of CTMH funds.

(1)  The Department of Commerce adopts and incorporates by reference the Application Guidelines for the Emergency Shelter Facility Grant (ESFG) Program.

(2)  The rules incorporated by reference in (1) relate to the scope, standards, and procedures for eligibility, application, award, administration, compliance monitoring, and related requirements for grants to nonprofit corporations that provide emergency shelter for the homeless.

(3)  Copies of the regulations adopted by reference in (1) may be obtained from the Department of Commerce, Montana Housing Division, 301 South Park Avenue, P.O. Box 200528, Helena, Montana 59620-0528, or on the web site at https://housing.mt.gov/.