First-Time Homebuyer Programs in Montana

Are you tired of the hustle and bustle of urban life? You might be interested in greener pastures and wide open spaces in which to settle down and build a quiet sanctuary. If you wistfully long for a gorgeous scene of colorful mountainsides and bright fields, you might consider purchasing a new home in Montana.

While there are several populous cities in Montana, such as Billings and Missoula, you can expect much of the state to be stretches of natural open spaces. Home to many national parks, rolling grasslands and scenic mountain ridges, this state is unparalleled in its abundance of outdoor recreation opportunities.

For new and repeat homebuyers, the journey to purchasing your new home is an exciting one. However, it can be a stressful task to crunch the numbers. For many homeowners, the affordability gap between their budget and the purchase price can put their dream home just out of reach. Fortunately, there are several programs for both first-time and repeat buyers to assist with down payment, closing costs, and mortgage payments to help close the gap for new buyers.

Financial assistance programs often vary by state, and some by city or region. Here are several opportunities for new homebuyers in Montana to consider when searching for your dream house.

Who Qualifies as a First-time Homebuyer in Montana?

Per guidelines set by Montana Housing, a first-time homebuyer is defined as an individual who has not owned a home in the past three years as a primary residence. There are some exceptions, such as homeowners buying in federally designated Target Areas where incomes are typically low. When reviewing the guidelines for each program, check the specific requirements for exceptions.

Statewide First-Time Buyer Programs

The following programs are available statewide to Montana residents.

Regular Bond Loan Program

Montana Housing offers several programs for first-time buyers to procure assistance when purchasing their first home. The Montana Housing Regular Bond Program is a 30-year, low interest loan for qualified buyers. Income and purchase price limits apply. Eligible homebuyers for Montana Housing programs must first qualify for an FHA, VA, RD or HUD-184 first mortgage loan. View eligibility requirements and learn more by visiting the Montana Housing website.

Bond Advantage Down Payment Assistance Program

New homebuyers who need assistance with their down payment and closing costs may be interested in Montana Housing’s Bond Advantage Down Payment Assistance Program. Applicants must qualify for the Regular Bond Program Loan to be considered eligible. The Bond Advantage Program offers a second fixed-rate mortgage for up to 5% of the sales price (not to exceed $10,000) to put towards down payment and closing costs. Minimum credit requirements apply. See website for details and to contact an approved participating lender who can guide your process.

MBOH Plus 0% Deferred Down Payment Assistance Program

Similar to the Bond Advantage Program, Montana Housing’s MBOH Plus 0% Deferred Down Payment Assistance Program is available to qualified borrowers who are deemed eligible for the Regular Bond Program. This is a 0% interest second mortgage for up to 5% of the sales price (not to exceed $6,500) to be put towards down payment or closing costs. This program also allows deferred payments. Income limits, credit restrictions, and other requirements will apply. See website for details and to contact an approved participating lender.

80% Combined Program

Any first-time borrowers looking for an alternative to an FHA-insured loan who are eligible for Montana Housing financing may be interested in the 80% Combined Program. This program assists homeowners in preparing for down payment by combining a 30-year first mortgage loan at 80% of the purchase price with a second loan for the remaining 20% of purchase price. This method eliminates the need for mortgage insurance. Income limits and credit restrictions, as well as other borrower requirements, may still apply. Check out their website for details.

Montana Veterans’ Home Loan Program

Qualified veterans looking to purchase their first home in Montana may qualify for the Montana Veterans’ Home Loan Program. To be eligible for financial assistance in first mortgage funds, Montana residents must be serving or have served in the military through the federal armed services or the Montana National Guard. Income restrictions and purchase price limits do not apply. The interest rate for the first mortgage program is 1% lower than market. Visit the website to contact a participating lender for details and to learn about any other limitations.

Mortgage Credit Certificate

Aside from the loan programs, first-time buyers may also take advantage of the Montana Housing Mortgage Credit Certificate program. This is not a loan, but rather a dollar-for-dollar tax credit that reduces the amount of federal income tax paid by the homeowner. Qualified applicants may be eligible to receive up to 20% of the mortgage interest (not to exceed $2,000) that is paid during the tax year. Loan programs offered through Montana Housing are not eligible for combination with the Mortgage Credit Certificate. This tax credit may be used by a lender to assist the borrowers in meeting eligibility requirements for a loan. See website for more information and to contact a participating lender for details.

NeighborWorks Montana HOME Program

Outside of the Montana Housing programs, the NeighborWorks Montana HOME Program provides loans between $2,500 and $25,000 (and even up to $40,000) to help fill the gap between the necessary financing and the amount provided by the primary mortgage lender. The secondary loans are restricted to moderate-to-lower income households. Eligible borrowers must be first-time homebuyers, a single parent with dependent children in the household or a household with an individual with a disability.

NeighborWorks Montana HOME funds are offered for individuals residing in areas of the state that are not served by other programs or organizations with similar funding opportunities. These are 0% interest loans with deferred payments for 15 years, or until the borrower moves or refinances the home. Visit the website for details and more information on how to apply for financial assistance.

Statewide Non First-Time Buyer Programs

While the above programs are strictly available for first-time homebuyers, there are other statewide programs to assist individuals looking to move from one home they have owned into another.

NeighborWorks Montana Down Payment Assistance

As mentioned above, NeighborWorks Montana offers several programs to help individuals purchase their dream home in the state. Households with income that exceeds the required limits may not qualify for the HOME Program, but could still qualify for a smaller down payment assistance loan between $1,500 and $10,000 through the NeighborWorks Montana Down Payment Assistance Program. This program is not restricted to first-time homebuyers. These loans are not deferred; they are amortized and will require monthly payments. Visit the website to learn more about NeighborWorks programs.

HomeNow Program

The HomeNow Program, offered by MoFi, assists homebuyers with down payment and closing costs. This program covers 100% of down payment and closing costs for eligible borrowers through either a grant or deferred loan option. Homebuyers will work with loan officers to determine eligibility and select a structure that fits the borrower’s needs. This program is not restricted to first-time buyers, however income limits and credit restrictions do apply. See their website for more information and view their FAQ.

Homebuyer Programs by Location

In addition to statewide programs, there are often homebuyer assistance programs based in different cities and regions of a state.

Billings

Residents of the City of Billings are eligible to apply for the Billings’ First Time Home Buyer Program. This program, offered by the City of Billings, provides financial assistance in the form of a deferred loan to low-income households to assist them in closing the affordability gap when purchasing their first home. Income limits and other eligibility requirements may apply. Visit the website for details and to submit an application.

Bozeman

Residents of the City of Bozeman, the seat of Gallatin County, may be interested in applying for down payment assistance through the Human Resource Development Council (HRDC). First-time homebuyers may be eligible for up to $30,000 to put towards their down payment in the form of a 0% interest second loan with deferred repayment options. This program which is extended to households in Gallatin, Park and Meagher Counties, is exclusively designated for low to moderate-income borrowers and income restrictions apply. See website for more information.

Great Falls

In the City of Great Falls, residents may take advantage of several opportunities provided by NeighborWorks Great Falls to help with financing their new home. For both families and individuals with low to moderate income, NeighborWorks Great Falls offers loan products to assist with total financing, down payment and closing costs. See website for details and eligibility requirements.

Missoula

Residents of Mineral, Missoula and Ravalli Counties may take advantage of the Human Resource Council’s First-time Homebuyer Down Payment Assistance program. This is in the form of a deferred simple interest second mortgage in an amount of up to $35,000. No payments are required until first mortgage is satisfied. See website for details and additional eligibility requirements.

Make Your Move to Montana

When you are ready to make your move to the gorgeous grasslands and enjoy natural scenery daily, look no further than the wide open spaces of Montana. It’s easy to build your next sanctuary within your budget when taking advantage of state and national financial assistance opportunities. You will be hiking the mountains and enjoying the view from your new porch before you know it!

The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.