1. (1) A HMF or MHT-HMF loan made pursuant to ARM 8.111.503(1)(a) and (c) shall:

   1. (a) provide for complete amortization at maturity through substantially equal monthly payments of principal and interest;
   2. (b) have an amortization period not to exceed 40 years and a term not to exceed 30 years as approved by the board based on the loan amount, other funding sources and obligations, and other relevant factors; and
   3. (c) bear interest at an annual rate as approved by the board.

2. (2) A HMF and MHT-HMF loan made pursuant to ARM 8.111.503(1)(b) and (e) shall:

   1. (a) have a short term loan;
   2. (b) have affordability restrictions, limitations on resale for use other than as low or moderate income affordable housing, and provide for recapture of the interest savings an applicant received by borrowing from the program rather than at market rates;
   3. (c) bear interest at an annual rate as approved by the board that reflects the short term; and
   4. (d) comply with loan-to-value and other required loan provisions as approved by the board.
3. (3) A HMF or MHT-HMF loan made pursuant to ARM 8.111.503(1)(d) and (f) shall be subject to terms and conditions, as approved by the board, which shall ensure a reasonable likelihood of repayment.

4. (4) As a condition of the loan made pursuant to ARM 8.111.503(1)(a) or (c), the property owner must execute and record a land use restriction agreement or similar covenant running with the land that includes the following:

   1. (a) at least 75% of the project units or lots must be targeted to residents at or below 95% of area median income;
   2. (b) maximum rent requirements and restrictions;
   3. (c) related transfer, compliance, and enforcement restrictions; and
   4. (d) a term of the longer of thirty years or the duration of the loan obligation.

5. (5) A HMF or MHT-HMF loan must:

   1. (a) be subject to a late fee of 4% of the monthly payment due for each monthly payment that is not made within 15 days of its due date; and
   2. (b) be secured by a lien perfected either by a mortgage or a trust indenture against the real property benefited by the loan.

6. (6) The board may approve HMF or MHT-HMF loans:

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

   2. (b) to provide financing prior to completion of construction, when the board determines additional public benefit such as but not limited to the following:

      1. (i) allowing project financial feasibility;
      2. (ii) facilitating bridge financing during the construction phase; or
      3. (iii) providing an increased number of affordable housing units.
7. (7) As a condition of approving pre-construction or bridge financing, the board may require additional security, risk management measures, and other loan terms. Examples of such conditions include additional collateral, third-party construction, and disbursement monitoring obtained or provided and paid for by the borrower, investor, or other lender.

Authorizing statute(s): 90-6-136, MCA

Implementing statute(s): 90-6-133, 90-6-134, MCA

History: NEW, 2002 MAR p. 75, Eff. 1/18/02; AMD, 2008 MAR p. 40, Eff. 1/18/08; AMD, 2023 MAR p. 1405, Eff. 10/21/23; AMD, 2025 MAR, Notice No. 2025-345, Eff. 11/8/25.