(1) Any public or private form or corporation ("applicant") maintaining an office in the state that is authorized by law to make or participate in making new, residential mortgage loans may request, in writing, to be designated as a qualified and approved lending institution under a specific program of the board.

(2) All requests must include:

(a) a listing of the applicant's principal officers and officer authorized to execute contracts, agreements, and other documents, plus a copy of the authorized officer's statement;

(b) a listing of the personnel and their qualifications principally involved in making and servicing mortgage loans;

(c) an indication of the programs under which the applicant seeks designation as a qualified lending institution; and

(d) a certificate of errors and omissions insurance coverage in a minimum amount as is required by the program documents for each bond issue in which the lending institution participates and a fidelity bond of an amount currently required by the FHA but not less than $300,000.

(e) an applicant which is governed by one of the regulatory agencies defined herein, must submit its most recent regulatory agency report, which must indicate a positive return on average assets, and (based on generally-accepted accounting principles (GAAP) ) indicate a total capital as a percentage of average assets of at least 6% or meet all applicable capital requirements of the regulatory agency and must have and maintain a minimum net worth according to generally-accepted accounting principles (GAAP) of $1 million. An applicant not governed by a regulatory agency defined herein, must submit its most recent audited financial statements and current financial statements which have been prepared within 60 days of submission. Current financial statements shall be comprised of a balance sheet, year-to-date income statement, and a statement of change covering at least a six-month period. Current financial statements must indicate a positive return on average assets based on generally-accepted accounting principles (GAAP) , and current financial statements must indicate total capital as a percentage of average assets of at least 6% and must have and maintain a minimum net worth according to generally-accepted accounting principles (GAAP) of $1 million.

(f) evidence of current corporate and ownership structure demonstrating more than one year of existence. This also applies to existing approved lending institutions which are restructured by the institution's regulatory agency or corporate reorganization.

(3) The board will determine whether or not an applicant is qualified under the terms and conditions of 90-6-103, 90-6104, 90-6-106 and 90-6-108, MCA, the applicable trust indenture and the rules then in effect. Approved and qualified applicants will be notified and advised of the conditions of their approval.

(4) The board will restrict the financial returns and benefits of the funds provided to qualified and approved lending institutions as provided in the applicable trust indentures under which its programs are financed.

(5) No qualified lending institutions may enter into any written commitment to make mortgage loans to be purchased or financed by the board with a builder, developer or real estate agent or broker unless the board first determines that, due to economic and other conditions prevailing in the area involved, such commitments are made necessary or desirable to provide decent, safe and sanitary housing which is within the capabilities of lower income persons and families.

(6) Each year or as requested by the board, the qualified and approved lending institutions participating in the board's bond programs shall file audited financial statements or equivalent regulatory agency reports. The financial statements shall exhibit total capital as a percentage of average assets of at least 6%.   If the qualified and approved lending institution's capital to average assets ratio is below 6%, the institution must meet the capital requirements of its regulatory agency or demonstrate, with current financial statements, an increasing ratio of capital to average assets.

(7) Any applicant which fails to meet the requirements set forth in this regulation, will not be allowed to submit a new application to qualify as an approved lending institution for a minimum period of 180 days from the date of its previous application.