For residents of Montana, first time home buyer programs are not large in number, but they do exist if you know where to look for them. There are programs at the state level, the county and local level, and others administered by private organizations throughout Montana. The place to start for all first time home buyers in the state is to contact a real estate agent or mortgage lender. Between the two of them they can point you in the right direction regarding the programs available in your area. You can also visit the state Department of Commerce for more information.
The Department of Commerce directs all housing assistance programs through the Montana Board of Housing. This agency is under the direct control of the Department of Commerce and is responsible for facilitating assistance to qualified first time home buyers. At the present time the Montana Board of Housing only lists two programs that are currently available.
To qualify for these programs individuals must be first time home buyers as defined by state law. This means they cannot have owned a home in the previous three years. Manufactured homes and trailers that have not been permanently affixed to a foundation are not considered homes for the purposes of this definition. Residents of certain target areas, as well as those who qualify as displaced homemakers, may also be granted exceptions to the first time home buyer rule.
MBOH Low Interest Loan
The starting point for first time home buyer assistance in Montana is the MBOH low interest loan. This is a 30 year, fixed-rate mortgage with an interest rate generally below standard market rates. These loans can be issued as FHA, USDA, HUD 184, or VA loans. All loans are made through participating lenders and are backed by various federal insurance programs. Down payments can be as low as 0% but they will not exceed 3.5% of the total sales price. For VA and USDA loans, they can be written for up to 100% percent of the purchase price.
To qualify you must meet certain income eligibility requirements which are determined by the local area in which you are purchasing the home. You must also be a first time home buyer according to the above definition and the home you purchase must be your principal residence. There are also restrictions on the sales price, also determined by the location in which you are purchasing.
MBOH Closing Cost Assistance
The MBOH provides assistance for closing costs and down payment through one of two options. The first option is for low income individuals whose total annual income does not exceed 80% of the median in the area where they are purchasing. This option has the state covering the costs associated with a bank originating the loan. That amount of money, which could be up to $1,500 on a $100,000 property, is normally included in the buyer's closing costs.
The second option comes by way of the secondary mortgage offered to qualified individuals. This secondary loan provides between $5,000 and $7,500 to be used to cover closing costs and down payment. This secondary loan can be combined with other county or local programs for a total value of up to $45,000 or more. The secondary loans do not need to be repaid until the first mortgage has been satisfied or the home is sold. In order to be eligible for this second option, first time home buyers are required to complete a home ownership education program.
County and Local Programs
Unfortunately, Montana is one of the states with very tight purse strings at the state level. But where they lack in state first time home buyer programs they make up for with programs at the county and local level. The programs listed below were taken from a list at the HUD website which is assumed to be up to date. The programs vary in the types of assistance they offer, and all have very strict eligibility requirements.
- Great Falls Neighborhood Housing Services Inc Lender Pool Loan Program (LPL)
- Havre First Time Homebuyer Program
- Lewistown Homebuyer Assistance Program (HAP)
- Montana Homeword Inc Reach for the Dream Program (DAP)
- Montana Neighborhood Housing Services Inc of Great Falls Amortizing Down Payment and Closing Cost Program (ADPCC)
- Montana Neighborhood Housing Services of Great Falls State 80% to 115% AMI Second Mortgage Program (SMP)
- Multi Counties Great Falls NHS Inc of Great Falls STATE Due on Sale Program (SDOS)