We oftentimes get asked why we write so much home buying content as a student loan centered blog. And the answer is simpler than you think: because life continues to happen and paying off your student loan debt is far from the last financial goal you'll have in your life.
Montana is often known as the home of Yellowstone National Park, of beautiful wildlife, and a rich cultural blend of Native American and American West influences. But there is so much more to Big Sky Country than that.
And Americans nationwide are taking notice. A 2021 study by State to State Migration found that "Montana had the highest net inflow of moves per capita, with 73% of moves inbound and just 23% outbound."
And while this is a great thing for state and local economies, it also puts pressure on real estate markets across the state. Fortunately for first-time buyers in particular, Montana offers a number of state programs to spur homeownership across the state.
Buying a house in Montana
Over the past couple of years, the real estate market in Montana has actually been hotter than it has been in the rest of the country. According to Zillow, MT home prices in the twelve month period ending in May 2022 increased by nearly 26%, to $448,875.
Between soaring real estate prices and higher interest rates, homes in Montana - and across the rest of the United States - will cost hundreds of dollars per month more than they would have a couple short years ago. Below, you'll see a table with common estimated down payment amounts.
Average home price
3.5% down payment (FHA loan min)
10% down payment
20% down payment
With these estimated down payments in mind, let's explore the various home loan programs available to Montana home buyers, of which some are reserved for first-time buyers. Then, we will specifically focus in on first-time Montana buyer loan and down payment assistance programs offered by Montana Housing.
Related: Get My First-Time Home Buyer Guide
Montana home buyer mortgage loan options
As a home buyer in Montana, you have the following national mortgage programs available to you:
First-time home buyer programs in Montana
Montana Housing offers numerous programs to the following types of buyers across the state:
Those who have never owned a home before
Those who have not owned a home in the previous three years
Among these programs are:
Regular Bond Program
Veterans' Home Loan Program
80% Combined Program
1. Montana Housing Regular Bond Program
The MT Housing Regular Bond Program provides 30-year fixed rate mortgage loans with low interest rates. To qualify for these loans, home buyers must:
Have incomes and home purchase prices below program limits
Purchase a single-family home, planned unit development, condo, or manufactured home
Qualify for an FHA, VA, RD, or HUD 184 loan
These purchase price limits vary by county and location across the state, but typically fall between $349,525-$427,198, though certain counties or parts of counties have limits as high as $613,104.
In many instances, you'll also need to complete a home buyer education course unless your credit score is above 680 and you meet other requirements.
2. Veterans' Home Loan Program
Established in 2011, MT Housing's Veterans' Home Loan Program is intended to provide affordable 30-year mortgage loans to members (or former members) of the Montana National Guard, or any national armed force or reserve.
The program offers qualifying veterans fixed rate mortgages at 1% less than the Fannie Mae Daily Historical Yields (FNMA), or Montana Housing's posted interest rate.
Qualifying criteria are as follows:
Be a resident of Montana
You must be an eligible veteran with honorable service/discharge
You must never have owned a primary residence
Be willing to complete a first-time home buyer class
Unlike the Regular Bond Program, this program does not have any income or purchase price limits. You can, however, borrow a maximum of $332,050 to partake in the program.
3. MT Housing 80% Combined Program
An alternative to using an FHA loan, Montana Housing's 80% Combined Program allows you to pair two different loans together in order to finance your new home. Your primary MT Housing loan will cover 80% of the purchase price of your home, and the second home loan will cover the remaining 20%, and will come from a MT Housing partner.
You're eligible to use this program as long as you:
Have a credit score of at least 640
Contribute at least $1,000 of your own money to the program
Complete a home buyer class
Maintain a debt to income ratio below 41%
Program home price and income limits are the same as with the Regular Bond Program.
Down payment assistance programs in Montana
Montana Housing, and other organizations, also provide down payment assistance to prospective home buyers statewide.
1. Bond Advantage
The MH Bond Advantage program can provide you with up to 5% in down payment assistance, up to a maximum of $12,500. Structured as a 15-year second mortgage, you'll make monthly payments to repay the assistance you received. To qualify, you'll need to qualify for a mortgage through MH and:
Have a credit score of at least 620 (for every borrower listed on home)
Contribute at least $1,000 of your own funds to your home purchase
This second mortgage will carry the same interest rate as the Montana Housing first mortgage.
2. MBOH Plus 0% Deferred Down Payment Assistance Program
This second mortgage program, also offered by Montana housing, also helps provide funding to be used towards your down payment or closing costs.
It allows for up to 5% of the home's price in assistance, up to $10,000 (rather than $12,500), but is structured as a loan at 0% interest with no monthly payments Instead, the amount that you borrow will not be owed back until you sell your home, transfer the title, refinance your mortgage, or pay off your mortgage.
As was the case with the Bond Advantage program, you do need to use a MH 30-year fixed rate first mortgage, and you'll also need to meet the following criteria:
A credit score of at least 620
Be within the household income limit of $65,000 for 1-2 person households and $75,000 for 3+ person households
A debt-to-income ratio of 43% or less
You'll also need to complete a home buyer education course and use a minimum of $1,000 of your own money towards the home purchase.
All of these programs will require you to work with lenders that participate in Montana Housing programs. Click here to contact a participating lender today!
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