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First time home buyer Montana home buying information and home buying assistance resources.
Skiing, motorcycling, hiking, and camping are among the many outdoor activities available to Montana residents.
However, the vast sky cannot be your only roof. Montana Housing, the state’s housing finance authority, offers a variety of programs that can be combined with conventional, FHA, VA, USDA, or Section 184 loans to make purchasing a first home more affordable.
First Time Home Buyer Montana Loan Programs
You are considered a first-time homeowner by Montana Housing if you have not owned a house in the past three years. If you suit this description, consider one of the following agency options.
Montana Housing Regular Bond Program
Principal mortgage option for first-time homebuyers offered by Montana Housing is the Regular Bond Program, which provides a low interest rate on a 30-year fixed-rate loan.
Borrower requirements:
➣ The annual household income cannot exceed the Montana Housing limitations, which vary based on household size and residence location.
➣ You must finish a homebuyer education course if your credit score is below 680, your front-end (debt-to-income) ratio is over 31%, and your back-end (debt-to-income) ratio is above 41%.
Property requirements:
➣ May be a single-family dwelling, condominium, or mobile home.
➣ Cannot exceed Montana Housing purchase price limits, which range from $311,979 to $418,818 across the state (higher in some target areas).
Montana Housing 80% Combined Program
The 80 percent Combined Program permits first-time homebuyers to combine a loan approved by Montana Housing for 80% of the purchase price with a second loan covering the remaining 20%.
The second loan is provided by a partner of the organization, such as NeighborWorks Montana or MoFi.
Borrower requirements:
➣ Contribute a minimum of $1,000 of your own finances to the purchase
➣ A credit score of at least 640
➣ Maximum front-end (DTI) ratio of 29 percent and back-end (DTI) ratio of 41 percent.
Required completion of a course on homebuyer education
➣ Must comply to the same income and purchase price constraints applicable to the Regular Bond program
Montana Veterans’ Home Loan Program
If you are a veteran in Montana purchasing your first home, you may be qualified for the Montana Veterans’ Home Loan Program, which offers a below-market interest rate.
To qualify, you must be purchasing your first home, but there are no income restrictions, so you may be eligible even if your household is not deemed low- or moderate-income.
The maximum loan amount is presently $349,205, and you can only purchase a single-family home or certain manufactured homes, not a condo.
As with other Montana Housing loan programs, a homebuyer education course is required.
Additionally, you must provide a minimum of $2,500 of your own funds to the purchase, which can be applied to the down payment or closing costs.
This program is on a first-come, first-serve basis; your mortgage lender can provide the most up-to-date availability information.
Montana down payment assistance
If you are currently paying rent, you may be able to afford a comparable monthly mortgage payment, but you are not saving enough for a down payment and closing fees.
Montana Housing offers two choices for down payment assistance to help you with this upfront cost.
To be eligible for either, you must first qualify for the Regular Bond Program.
1. Bond Advantage Down Payment Assistance Program
Bond Advantage is a 15-year loan with monthly payments that will help you obtain up to 5 percent of your home’s sale price, or up to $12,500, for your down payment and closing costs.
2. MBOH Plus 0% Deferred Down Payment Assistance
With the MBOH Plus 0% Deferred option, you can get up to $5,000 or 5% of your home’s sale price, whichever is greater.
The absence of monthly payments is the primary difference between this program and Bond Advantage.
You must refund the aid amount when you sell your property, pay off your initial mortgage, or refinance it. No additional interest charges apply.
Borrower requirements:
➣ A credit score of at least 620
➣ 43 percent maximum DTI ratio
➣ You must contribute a minimum of $1,000 to the purchase of the residence.
➣ Must be eligible for a Montana mortgage on a home
Other Montana homebuyer assistance programs
Mortgage Credit Certificate (MCC)
If you do not qualify for a Montana Housing mortgage, you may still be able to save by obtaining a mortgage credit certificate (MCC).
In Montana, the MCC permits a dollar-for-dollar tax credit on 20% of your mortgage interest, up to a maximum annual credit of $2,000.
However, there is a fee to receive an MCC ($500 to Montana Housing and your lender may charge an extra $250), but the fee can be recouped over the life of a mortgage, so it is worthwhile to explore for the long-term savings.
Local programs assisting homebuyers
If you wish to purchase a home in the largest city in Montana, you may be eligible for further assistance.
First-time homebuyers in Billings are eligible for zero-interest, deferred-payment loans of up to $15,000.
To qualify, you must meet specific income requirements and submit your application at the optimal time: Each year, the monies normally become available in July and are typically drained by November.
Additional first-time buyer loan programs
Utilize Bankrate’s guide to first-time homebuyer loans and programs as you begin your search for your first home in Montana and analyze your mortgage alternatives.
This will allow you to explore additional possibilities that may be available to you. These include FHA, VA, and USDA loans with low or no down payment requirements and more liberal credit requirements.
Conclusion
Are you prepared to make your Montana dream house a reality? Begin by comparing mortgage rates in Montana in order to comprehend the current state of the lending industry at banks, credit unions, and other mortgage lenders.
If you believe you qualify for a Montana Housing loan, evaluate the agency’s current interest rates, income and price limitations.
Once you have determined your eligibility, you can review participating lenders and begin the application process.