Montana First-Time Home Buyer | 2022 Programs and Grants

What to learn about shopping for a home in Montana

Montana affords loads of assist to first-time residence consumers. For many who are eligible, that may embrace down cost help loans, particular mortgages with below-market charges, and residential purchaser training courses. Right here’s get began.

On this article (Skip to…)

Montana residence purchaser overview

The median residence worth in Montana was $444,990 in April 2022 in accordance with Zillow. That was a worth enhance of 28% year-over-year.

Montana residence purchaser stats

Down cost quantities are based mostly on the state’s most lately out there common residence sale worth. “Minimal” down cost assumes 3% down on a standard mortgage with a minimal credit score rating of 620.

Should you’re eligible for a VA mortgage (backed by the Division of Veterans Affairs) or a USDA mortgage (backed by the US Division of Agriculture), it’s possible you’ll not want any down cost in any respect.

First-time residence purchaser loans in Montana

Should you’re a first-time purchaser in Montana with a 20% down cost, you will get a standard mortgage with a low rate of interest and no non-public mortgage insurance coverage (PMI).

Placing 20% down will hold your month-to-month mortgage funds low. It may additionally provide you with an edge in aggressive housing markets. Nonetheless, few first-time debtors have saved that a lot.

The excellent news is, Montanans have entry to a variety of mortgage loans that may assist them get into a brand new home with low and even no down cost:

• Standard 97: Backed by Freddie Mac or Fannie Mae. 3% down cost and 620 minimal credit score rating. You possibly can often cease paying mortgage insurance coverage after a number of years
• FHA mortgage: Backed by the Federal Housing Administration. 3.5% down and a 580 minimal credit score rating. You’re on the hook for mortgage insurance coverage till you refinance to a distinct kind of mortgage, transfer, or repay your mortgage
• VA mortgage: Just for veterans and repair members. Zero down cost is required. Minimal credit score rating varies by lender however usually 620. No ongoing mortgage insurance coverage after closing. These are arguably one of the best mortgages out there, so test your eligibility you probably have a navy service historical past
• USDA mortgage: For these on low-to-moderate incomes shopping for in designated rural areas. Zero down cost required. Credit score rating necessities differ by lender however usually 640. Low mortgage insurance coverage charges
• Montana Housing loans: Particular mortgages with below-market charges; down cost help loans; residence purchaser training programs. Extra data beneath

Word that authorities mortgage packages (together with FHA, VA, and USDA residence loans) require you to purchase a major residence. Which means you may’t use these loans for a trip residence or funding property.

As well as, most packages allow you to use gifted cash or down cost help (DPA) to cowl your down cost and shutting prices. Relying on the mortgage mortgage you select, you possibly can probably get into your new home with minimal money out of pocket.

Should you’re not sure which program to decide on to your first mortgage, your lender may help you discover the best match based mostly in your funds and residential shopping for objectives.

Montana first-time residence purchaser packages

Montana Housing — an arm of the state authorities — affords particular mortgages to qualifying Montana first-time residence consumers. Assuming it retains its mortgage charges web page updated, these would possibly include aggressive, below-market rates of interest. However the primary benefit of those loans is that they supply down cost help, which we’ll cowl within the subsequent part.

To be eligible for a Montana Housing first-time residence purchaser mortgage, you will need to:

There are different minor situations, which you’ll be able to see on the web site.

Montana first-time residence purchaser grants

The Montana state authorities has two types of down cost help, which might present assist with each your down cost and shutting prices. You’ll want to make use of one among its mortgages (above) to get this assist. Word that neither is a grant. Each are loans that should be repaid. Nonetheless, the phrases of every are very completely different:

Bond Benefit Down Cost Help Program

Montana’s Bond Benefit Down Cost Help Program affords a second mortgage that you simply repay over 15 years in parallel along with your first (principal) mortgage. The month-to-month funds ought to be comparatively low, and your lender ought to ensure you can comfortably afford them.

You possibly can borrow as much as $12,500 or 5% of the acquisition worth, whichever is the lesser. To qualify, you’ll want a credit score rating of 620 and to have $1,000 of your individual cash to contribute to your buy. Click on the hyperlink above for extra particulars.

MBOH Plus 0% Deferred Down Cost Help Program

The Deferred Down Cost Help Program can be a second mortgage, but it surely’s very completely different from the primary program. That’s since you pay 0% curiosity and make no month-to-month funds. In business jargon, that is known as a “silent mortgage.”

You do should repay the mortgage finally, however solely “upon sale or switch of the property to a different get together or if the excellent mortgage secured by the primary mortgage is refinanced.”

However don’t get too excited till you already know whether or not you qualify for this program. Earnings limits are decrease for this one ($55,000 for a family comprising one or two individuals, and $65,000 for 3 or extra, on the time this was written), and you continue to want a credit score rating of 620 or larger.

Once more, click on the hyperlink above for full particulars.

Shopping for a house in Montana’s main cities

On common, houses in Missoula are above the statewide median for Montana. Nonetheless, housing costs in Billings and Nice Falls are beneath that common and rising extra slowly.

Billings first-time residence consumers

The median itemizing worth in Billings was $360,000 in April 2022, in accordance with Realtor.com. That was 20% larger than a yr earlier.

If you wish to purchase a house at that worth, your down cost would possibly fall between:

• $10,800 for a 3% down cost
• $72,000 for a 20% down cost

The Metropolis of Billings manages three down cost help packages. Obtain its brochure for full particulars.

The essential Dwelling$tart program affords as much as $7,500 to lower-income households within the type of a deferred mortgage. You pay no curiosity and make no month-to-month funds. However it’s a must to repay the quantity you borrowed in full once you promote, switch the property, or refinance your mortgage.

The identical deal is obtainable to those that presently obtain public housing help beneath the Dwelling$tart Plus program. However they’ll borrow as much as $10,000.

Neighborhood Housing Companies, Inc. has a distinct program that lets eligible candidates borrow as much as $20,000. Once more, this requires no month-to-month cost. However it prices a below-market charge (the brochure mentions 1% for instance), and it’s a must to repay the quantity you borrowed plus that curiosity when “the house is bought, is now not the principal residence or when the primary mortgage is refinanced.”

Learn the brochure or name (406) 657-3045 you probably have additional questions.

Missoula first-time residence consumers

The median itemizing worth in Missoula was $550,900 in April 2022, in accordance with Realtor.com. That was 22.4% larger than a yr earlier.

If you wish to purchase a house at that worth, your down cost would possibly fall between:

• $16,530 for a 3% down cost
• $110,180 for a 20% down cost

The Human Useful resource Council (HRC) affords down cost help loans of as much as $35,000 in Mineral, Missoula, and Ravalli counties. However this system specifies that ” … solely the minimal quantity of help wanted to allow the participant to buy a modest residence will probably be offered.”

Obtain the HRC’s flyer for extra particulars. That features qualifying revenue caps which are fairly low. You can even name HRC’s Missoula workplace (406) 728-3710 for extra info.

Nice Falls first-time residence consumers

The median itemizing worth in Nice Falls was $299,000 in April 2022, in accordance with Realtor.com. That was 16% larger than a yr earlier.

If you wish to purchase a house at that worth, your down cost would possibly fall between:

• $8,970 for a 3% down cost
• $59,800 for a 20% down cost

In Nice Falls, “The HOME program out there via NeighborWorks offers deferred loans between $2,500 and $50,000 to supply down cost and shutting value help or to assist fill the hole between the entire financing wanted for a house and the quantity the first mortgage lender is keen to lend,” in accordance with this system’s web site.

Once more, it is a deferred mortgage with a 0% rate of interest and no month-to-month funds. However you’ll have to repay the quantity you borrowed once you refinance or promote the house.

In case your revenue is simply too excessive to qualify for that program (however is beneath 125% of the world median revenue), you might be able to borrow as much as $20,000. However it’s a must to repay that mortgage in month-to-month installments in parallel along with your principal mortgage. And rates of interest ranged from 1.5% to 7.25% on the time this was written.

Click on the hyperlink within the first paragraph of the Nice Falls part for extra particulars. And name (406) 761-5861 with any questions.

The place to search out residence shopping for assist in Montana

All of the organizations we’ve listed above ought to present recommendation freely to any first-time residence purchaser in Montana.

Along with our choice, the U.S. Division of Housing and City Growth (HUD) offers a listing of city- and county-specific packages throughout Montana. The listing is as follows:

Statewide first-time residence purchaser packages in Montana

• Montana Housing — Single household housing packages — (406) 841-2840
• MoFi — HomeNow: Zero Down Cost Program — (844) 728-0932
• Montana Homeownership Community — Down cost and shutting prices help out there statewide — (866) 587-2244

First-time purchaser packages in Montana cities

Different first-time purchaser packages in Montana

What are immediately’s mortgage charges in Montana?

You possibly can test present mortgage rates of interest in Montana right here.

Once you’re prepared to purchase, make sure to apply with a minimum of three to 5 lenders to ensure you’re getting the bottom mortgage charge out there.

Price quotes can typically differ considerably between lenders, so buying round for charges may prevent hundreds in your new residence.

¹Source: Experian.com 2022 examine of 2021 knowledge

²Primarily based on a evaluation of the state’s out there DPA grants on the time this was written