Site control and due diligence — Montana

"Land or Property Control" is defined broadly, and due later than a developer might expect

MBOH's defined term is "Land or Property Control," not "site control," and its definition is broad by design: "legally binding documentation of title or right to possession and use of the property, or the right to acquire title or right to possession and use of the property, for purposes of the Project, including but not limited to documentation of fee ownership, lease, buy/sell agreement, option to purchase or lease, or other right, title or interest that will allow the Owner to acquire Proof of Ownership for purposes of Carryover" (2027 QAP Appendix A). Unlike Colorado's QAP, which explicitly excludes a seller's Letter of Intent from qualifying, Montana's definition does not name any excluded instrument — an option or a buy/sell agreement squarely qualifies, and this research found no QAP language barring a well-drafted LOI, though a bare, non-binding LOI would likely fail the "legally binding" requirement on its own terms.

Land or Property Control is Full-Application Item 4 (2027 QAP Section VI.A.2) — it is not required at Pre-Application. That timing matters: a developer can file a Pre-Application in April on a site under negotiation, then has until the August Full-Application deadline to convert that negotiation into a legally binding instrument. The risk that timing creates is the one this guide's Phase 1 already flags — the general project location cannot change after Pre-Application without a Board waiver (2027 QAP Section III.F.1) — so a site-control failure between April and August is a much harder problem than a site-control failure before April, since there generally isn't a fallback site to pivot to inside the same cycle.

Market study: two tiers, a strict six-month clock, and named pass/fail targets

9% Credit Pre-Applications require a Mini-Market Study and Summary Sheet (full studies are also accepted in place of the mini version); 4% Pre-Applications for an Inducement Resolution need neither a fee nor a Mini-Market Study (2027 QAP Section VI.A.1; III.A.2). Every Full-Application — 9% or 4% — requires a Full Market Study, a Market Analyst Certification Form, and a Market Study Summary Sheet (2027 QAP Section VI.A.2, Items 13–15).

Narrative references to the Market Study in the Development Evaluation Criteria section must cite the specific page and paragraph being relied on (2027 QAP Section VI.A.2, Item 22.b) — a documentation discipline worth building into any due-diligence workflow rather than treating as an afterthought once the narrative is drafted.

Appraisal, CMA, and a narrower identity-of-interest concept than CTCAC's

An Appraisal or Comparative Market Analysis (CMA) is required at Full-Application, prepared by "an independent professional entity that is qualified to prepare the report," and must meet MBOH's own Appraisal checklist (2027 QAP Section VI.A.2, Item 16); MBOH's site lists that checklist as an Excel file with macros, last updated July 17, 2024. A CMA may substitute for a full appraisal when an appraisal is not feasible, and — as covered in Phase 1 — neither is required at all for a site within the exterior boundaries of an Indian reservation, given documentation of that location (Item 16.d).

This is a place where Montana's QAP diverges structurally from states with a CTCAC-style acquisition identity-of-interest rule, and the difference is worth stating precisely rather than assumed away. The QAP does define "Identity of Interest," but only in the context of an Applicant's relationship to an In-Process Project — the repeat-award restriction Phase 4 of this guide covers, that a first-time 9% sponsor with an unfinished prior award needs an Experienced Developer partner to receive a second (2027 QAP Section II.A; Appendix A). That defined term does not extend to acquisition transactions between related parties. What does apply to a related-party acquisition is the QAP's general Related Party disclosure rule: Applicants and Owners "must disclose all transactions with Related Parties," and MBOH "may reduce Developer Fees, Builder Profit or other Soft Costs on Projects involving Related Party transactions" — a discretionary remedy applied after disclosure, not a mandatory second appraisal, extra certification, or below-market-value cap the way some states impose (2027 QAP, Underwriting Assumptions and Limitations section). A Related Party is broadly defined to include family relationships and any business relationship permitting "significant influence" over the other party (2027 QAP Appendix A).

One number the appraisal or CMA does feed directly: for the Soft-Cost-to-Hard-Cost Ratio calculation, "land value" is defined as "the highest value of what is shown in a comparative market analysis, appraisal or arm's length sale," and that value is added to the ratio's denominator regardless of whether the land was donated, leased, purchased, or otherwise acquired (2027 QAP Appendix A). A donated or below-market acquisition does not get to use its actual price for this calculation — it uses the highest of the three values.

Rehabilitation and acquisition/rehabilitation deals: a Capital Needs Assessment and a relocation plan, not a separate rehab track

Montana does not run a materially different application track for Rehabilitation or Acquisition/Rehabilitation deals the way some states do — the same Full-Application checklist applies, with a handful of items that only trigger for rehab. A Capital Needs Assessment (CNA) is required for every Rehabilitation Application, built on the USDA Rural Development Capital Needs Assessment template or a similar form, covering a minimum 15-year projection of every capital item to be replaced, refinished, repaired, upgraded, or otherwise rehabilitated, itemized by unit number, and prepared by a qualified professional entity (2027 QAP Section VI.A.2, Item 32). The CNA itself has its own freshness clock, separate from the market study's: it must be less than one year old as of the Application submission date, or carry a documented update within the most recent six months.

Zoning documentation gets a lighter path for these deals: Acquisition/Rehabilitation and Rehabilitation Projects can satisfy the zoning requirement by documenting that the Project will not require a change in zoning, rather than by producing affirmative city/county documentation of compliance the way New Construction must (2027 QAP Section VI.A.2, Item 5.b). Utilities documentation is similarly narrowed for these deal types — a letter or email from the utility provider addressing the expected additional load and the provider's ability to meet it, rather than the fuller documentation New Construction requires (Item 6.c).

Any Application proposing Rehabilitation or replacement of existing Units must also include a preliminary relocation plan addressing the logistics of moving tenants out during construction, temporary housing, the probable length of displacement, and the process for returning tenants to their original or replacement Units on completion (2027 QAP Section VI.A.2, Item 33) — this is a Uniform Relocation Act-adjacent obligation baked directly into the Full-Application checklist, not a separate compliance step layered on afterward.

The rest of the diligence file: utilities, public notice, and the fee sequence

Utilities documentation — a letter or email from each relevant provider (water, sewer, electricity, and gas/propane/garbage as applicable) confirming availability, capacity for the added load, and proximity — cannot be older than 18 months from the Application date, and MBOH may require an updated version at its discretion (2027 QAP Section VI.A.2, Item 6).

Public Notice to the community is its own Full-Application requirement, separate from the Local Involvement scoring item Phase 1 covers: the Applicant must release a public notice — a newspaper box ad, attendance at a neighborhood meeting, a social media post to three community group pages, or another MBOH-acceptable form — within 90 days of the Full-Application due date, using specific notice language the QAP itself provides verbatim, including the Project's unit count, bedroom mix, and target population (2027 QAP Section VI.A.2, Item 24). Broadband infrastructure is a related, easy-to-miss deliverable: it's required for all New Construction and Rehabilitation Projects, with a waiver available only on a documented, justified basis (Item 21).