(1) In order to qualify for financing under the MOBP program, the board shall determine that a project meets the criteria set forth in 17-5-1526 and 17-5-1527, in addition to meeting the following eligibility requirements:

(a) the project is in the public interest as determined at the public hearing conducted by the board pursuant to ARM 8.97.1707 or by the governing body of the local government unit in which the project is located. The public hearing requirement applies only to projects financed by federally tax-exempt bonds;

(b) the project will not only provide sufficient revenues to pay debt service on the bonds and related service and administrative costs, but also shall meet the board's reasonable expectations regarding cash flow and profitability to meet long-term viability;

(c) the project, upon completion, will have complied with all applicable local, state and federal laws and regulations; and

(d) as required by 17-5-1526(1) (e) and 17-5-1527(1) (e) , MCA, the project applicant must submit the required statements concerning the employment preference for Montana residents.

(2) An approved financial institution intending to participate in a board financing under the MOBP program must certify at the time an application for such financing is submitted that the institution's participation in, including the letter of credit proposed to be issued for the financing being requested, together with its participation (including the amounts of letters of credit outstanding for other financing under the board's MOBP program) does not exceed twenty-five percent (25%) of its capital and surplus.

(3) Eligible projects may consist of the acquisition of land and the rights and interests in the land, including the acquisition or construction of buildings, improvements or structures on the land; or the acquisition of fixtures, machinery, equipment and other tangible property so long as the following conditions are satisfied:

(a) the maximum loan-to-value ratio shall be ninety percent (90%) , using the lower of appraised value or cost/purchase to determine value;

(b) the financing shall be secured by a mortgage on the property being financed and on any additional collateral deemed necessary by the board, and shall be subject to any other terms and covenants the board deems necessary; and

(c) working capital is not financed.

(4) The board may finance projects for which the sole purpose is to provide residential housing as defined in ARM 8.97.1301(29) through the MOBP program only upon the following terms and conditions:

(a) the project must consist of at least eight units;

(b) a complete appraisal acceptable to the board and the financial institution and in a format approved by the board indicating cost, market, and income values must be submitted with the application;

(c) the applicant and the project must comply with requirements contained in section 142(d) of the Internal Revenue Code, including the requirement that at least twenty percent (20%) of the units be reserved for persons of low or moderate income as defined therein;

(d) such other terms and conditions as may be required by the board.