Yes, back when I applied, Notre Dame took only 20 students per year for the MTS and put another 20 on the wait-list. I think the preference is not so much for Catholic applicants, but applicants from Catholic schools. I've known of a couple Jewish students from Catholic undergrads who got offers from Notre Dame. They do give everyone free funding. When I turned them down, they offered a stipend but said they couldn't match other offers I'd received because the cost of living is cheaper in Indiana. That being said, I've heard Notre Dame has become increasingly conservative in recent years (and is a much more conservative environment than Fordham, Georgetown, and BC), so probably not the best fit for some of our theological interests.