Skiing, biking, hiking, camping and more — if you live in Montana, you have a host of excuses to enjoy the outdoors. The big sky can’t be your only roof, though. If you’re a first-time homebuyer in the state, Montana Housing — the state’s housing finance authority — has a range of programs that can work with conventional, FHA, VA, USDA or Section 184 loans to make buying your first home more affordable.

Montana first-time homebuyer programs

Montana Housing considers you a first-time homebuyer as long as you haven’t owned a home in the last three years. If that description fits you, consider contacting Montana Housing to apply to one of these programs:

Montana Housing Regular Bond Program

Montana Housing’s main mortgage program for first-time homebuyers is the Regular Bond Program, which offers a low interest rate on a 30-year fixed-rate loan.

Borrower requirements:

  • Annual household income can’t exceed Montana Housing limits, which vary based on household size and the home’s location
  • Homebuyers must first qualify for an FHA, VA, RD or HUD 184 first mortgage loan
  • Must complete a homebuyer education course if all of the following apply: your credit score is below 680; your front-end ratio is above 31 percent; and your back-end (debt-to-income ratio) is above 41 percent

Property requirements:

  • Can be a single-family home, condominium or manufactured home
  • Can’t exceed Montana Housing purchase price limits, which vary across the state from $481,176 to $876,867

Montana Housing 80% Combined Program

The 80% Combined Program allows first-time homebuyers to pair a Montana Housing-approved loan for 80 percent of the purchase price with another loan that covers the remaining 20 percent of the price. The second loan comes from one of the agency’s partners, such as NeighborWorks Montana.

Borrower requirements:

  • Must contribute at least 1 percent of the purchase price with your own funds, with a $1,000 minimum
  • Minimum credit score of 640
  • Maximum front-end ratio of 32 percent and back-end (DTI) ratio of 45 percent
  • Must complete homebuyer education course
  • Must adhere to the same income and purchase price limits that apply to the Regular Bond program

Montana Veterans’ Home Loan Program

If you’re a veteran in Montana and buying your first home, you could be eligible for the Montana Veterans’ Home Loan Program, which comes with an attractive below-market rate. You have to be buying your first-ever home to qualify, but there are no income limits, which can mean you’d be eligible even if you aren’t considered a low- or moderate-income household.

There is a limit on how much you can borrow, however — currently $457,117 — and you can only buy a single-family home or certain manufactured homes, not a condo. As with other Montana Housing loan programs, you’ll need to take a homebuyer education class. You’ll also need to supply at least $2,500 of your own funds to the purchase, which can go toward the down payment or closing costs.

This program is first-come, first-served. Speak with your mortgage lender to get the latest on availability.

Montana down payment assistance

If you’re paying monthly rent, you might be comfortable making a similar monthly mortgage payment, but not accumulating enough for a down payment and closing costs. To help you with that upfront expense, Montana Housing offers two down payment assistance options. To qualify for either, you’ll first need to be eligible for the Regular Bond Program.

1. Bond Advantage Down Payment Assistance Program

The Bond Advantage assistance program is a 15-year loan with monthly payments. You can get this loan for up to 5 percent of your home’s sale price, with a maximum of $15,000, for your down payment and closing costs.

Borrower requirements:

  • Minimum credit score of 620 for every name on the loan
  • Must contribute at least $1,000 of your money to the purchase
  • Must qualify for a Montana Housing mortgage

2. MBOH Plus 0% Deferred Down Payment Assistance

With the MBOH Plus 0% Deferred option, you can receive up to 5 percent of your home’s sale price, up to a maximum of $15,000. The main difference between this and the Bond Advantage program is a lack of monthly payments. Instead, you must repay the assistance amount when you sell your home or pay off or refinance your first mortgage. There are no additional interest charges.

Borrower requirements:

  • Minimum credit score of 620
  • Maximum DTI ratio of 45 percent
  • Maximum annual income of $80,000 for one- or two-person household or $90,000 for three or more-person household
  • Must contribute at least $1,000 of your own cash to the purchase of the home
  • Must qualify for a Montana Housing mortgage

Other Montana homebuyer assistance programs

Mortgage credit certificate (MCC)

If you don’t qualify for a Montana Housing mortgage, you might still have an opportunity to save as a first-time homebuyer by getting a mortgage credit certificate (MCC). In Montana, the MCC allows you to take a dollar-for-dollar tax credit on 20 percent of your mortgage interest, up to a maximum of $2,000 per year.

There is an upfront fee to obtain an MCC, however ($500 to Montana Housing, and your lender could charge an additional $250), but the fee can pay off over the lifetime of a mortgage, so it’s worth considering for the longer-term savings.

Local homebuyer assistance programs

If you’re looking to buy a home in Montana’s biggest burg, you might be able to take advantage of another form of assistance. The City of Billings offers zero-interest, deferred-payment loans of up to $15,000 to first-time homebuyers. To qualify, you’ll need to meet certain income limits, and the funds are available on a first-come, first-served basis.

Other Montana first-time homebuyer loans

In addition to the state-specific assistance programs for first-time homebuyers in Montana, here are some national loan programs to consider:

  • FHA loan: Loans insured by the Federal Housing Administration (FHA) have more lenient financial requirements than other loans. To get an FHA loan, you need at least a 580 credit score and a 3.5 percent down payment.
  • VA loan: This loan type — guaranteed by the U.S. Department of Veterans Affairs — is a great option for active-duty military, veterans or surviving spouses. You can get a VA loan with no down payment, and they often come with lower interest rates.
  • USDA loan: Loans guaranteed by the U.S. Department of Agriculture (USDA) also have no down payment requirements. However, to qualify, you must buy a home in a designated rural area and meet area-specific income requirements.
  • HomeReady and Home Possible: HomeReady and Home Possible are first-time homebuyer loan programs created by government-sponsored enterprises Fannie Mae and Freddie Mac. With these programs, you only need to put 3 percent down on a home purchase.

Get started

Ready to make your dream home in Montana a reality? Begin by comparing mortgage rates in Montana to understand today’s borrowing landscape at banks, credit unions and other mortgage lenders. If a Montana Housing loan seems like a fit for you, review the agency’s current rates and income and price caps. Once you know if you’re eligible, you can take a look at participating lenders and get the process started.

As you start searching for your first home in Montana and considering your mortgage options, take advantage of Bankrate’s guide to first-time homebuyer loans and programs to explore other offerings that might be available to you.