(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.