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First Time Homebuyer Down Payment & Closing Cost Assistance Program
NeighborWorks Montana/NeighborWorks Great Falls
www.nwgreatfalls.com

Program Overview

First Time Homebuyer Down Payment & Closing Cost Assistance Program is a program designed to assist low-to-moderate income families become homeowners by providing down payment and closing cost assistance to be used toward the purchase of a home. The program is funded by Glacier Affordable Housing Foundation and Montana Department of Commerce (CDBG and/or HOME grants). First mortgage financing is provided by Montana Board of Housing and/or USDA Rural Development. See property eligibility requirements.

Who is eligible for this program?

- Borrowers must occupy the property as their principal residence for the life of the loan. - Borrowers are required to have $500.00 of own funds in transaction. - Homebuyer education by an NW-approved educator must be completed prior to loan closing. - Liquid assets not to exceed $5,000 and total family assets not to exceed $70,000. - Income is for all occupants of the home aged 18 and over. All forms of income must be documented. Fully completed VOE’s are required for all jobs, Social Security award letters, child support verifications and divorce decrees. If the borrower is self-employed 2 full years of federal tax returns and a year-to-date P & L is required. - Programs for families whose income is below 80% median income: City of Great Falls 0% Deferred Appreciation Share, State HOME 0% Deferred Appreciation Share, MBOH 1st&2nd and TANF (TANF Program has its own income guidelines) (Statewide Low to Moderate Program may be applicable if qualifications below have been met). - To qualify for programs below 80% median income, borrowers must be first-time homebuyers (not owned within the last 3 years) OR single parents with dependent child(ren) OR a disabled family member. Is this program for first time buyers only? No

Property Eligibility Requirements

0% Deferred Appreciation Share Second Mortgage funds are available for properties located in the city limits of Great Falls. - The second mortgage becomes due if the borrower no longer occupies the property as their principal residence, sells or transfers the title, upon their death or when they repay the original first mortgage. When they repay the first mortgage and still occupy the property, the second mortgage becomes payable in monthly installments equal to the amount of the Principal & Interest payment of the original first mortgage. There is also an Appreciation Share requirement, in which the borrower will share with NeighborWorks a percentage of the net gain on the sale or refinance of the property. See program guidelines for details. Borrowers must use at least 29% of their gross income for housing. The maximum second mortgage amount is $15,000. There is a Home Inspection process required for this program. A Housing Quality Standards Inspection (HQS) is also required. The property being purchased cannot have been rented in the last 90 days. If the property was built prior to 1978 and peeling or chipping paint is identified on the home inspection or appraisal, then full lead-based paint abatement process will have to be followed. This program is currently funded, but check with the NeighborWorks office for availability and additional restrictions. These funds are intended for families “in need” who could not qualify without 0% funds. Also the family size in relation to property being purchased may be a factor. STATE HOME 0% DEFERRED APPRECIATION SHARE Second Mortgage: - 0% Deferred Appreciation Share Second mortgage funds are available in 53 counties throughout the State of Montana (can never be used in the cities of Great Falls, Missoula or Billings). Also, these funds can only be used in areas where there are no open HOME grants currently in place. The second mortgage becomes due if the borrower no longer occupies the property as their principal residence, sells or transfers the title, upon their death or when they repay the original first mortgage. When they repay the first mortgage and still occupy the property, then the second mortgage becomes payable in monthly installments equal to the amount of the Principal & Interest payment of the original first mortgage. There is also an Appreciation Share requirement, where the borrower will share with NeighborWorks Great Falls a percentage of the net gain on the sale or refinance of the property. See program guidelines for details. The borrower must use at least 29% of their gross income for housing. The maximum second mortgage is $10,000 (exceptions may be available for disabled applicants or in some high cost areas on a case-by-case basis, which must be approved by NeighborWorks prior to loan submission). The property cannot have been rented in the last 90 days. If the property was built prior to 1978 and peeling or chipping paint is identified on the home inspection or appraisal, then full lead based paint abatement process will have to be followed. An acceptable environmental certification must be obtained on the property, and a Housing Quality Inspection (NW will order these) is required and any repairs recommended must be completed prior to closing. A Housing Quality Inspection must be performed on each property using HOME funds. This HQS inspection will be ordered by NW (this will usually take at least 2 weeks) and any required repairs must be completed prior to closing. NWGF/NWMT/MBOH 1st & 2nd Mortgage Program: - An amortized second mortgage is available in conjunction with our MBOH first mortgage setaside. The maximum amount of the second mortgage is $5,000. Borrowers must be approved for an MBOH first mortgage through an approved lender. The interest rate on both mortgages is currently 5.50% for 30 years. (Rate is subject to change by MBOH). If property was built before 1978 and any peeling or chipping paint is identified on the HQS Inspection or appraisal, then property will not be eligible. PARTICIPATING BOND POOL PROGRAM: - Available to BOND POOL Participants (Currently US Bank, Mountain West Bank, Stockman Bank, Wells Fargo Home Mortgage & First Interstate Bank). An Amortizing second mortgage up to a maximum of $10,000.00. The interest rate varies according to the borrowers' total family income, and is subject to change quarterly, so please check our website for the current rates. Borrowers with income <80% of adjusted median maximum term is 30 years, and for borrowers whose income is >80% of adjusted median, the maximum term is 15 years. Maximum income for borrowers is 125% of median income (for families with Native American ancestry the maximum income is 150% of median income).

Benefit Details

Up to $40,000, with no interest and no monthly payments, may be available to qualified homebuyers. Benefit: Periodically funds are available for Section 8 recipients who are eligible for the Section 8 to HomeOwnership voucher. Call for details. All loan reservation packages must be sent to the NW office in Great Falls using the reservation checklist. Please allow 1½ -2 weeks for the loan to be reviewed. Homebuyer Counseling / Education Required: Yes Owner Occupancy Required: Yes

Please note: Every attempt is made to reflect accurate and up to date information on housing programs displayed on this site. Some inaccuracies may exist. For verification .