Securing a Montana mortgage can be made easier by taking advantage of certain programs.
There are a variety of options when looking for a Montana mortgage. In addition to conventional mortgage options, the State of Montana's Montana Board of Housing (MBOH) offers various government loans to low and moderate-income families. Most of these loans, which are funded with tax-exempt revenue bonds, offer lower interest rates, closing costs and down payments. Programs that fall under the MBOH include:
Eligibility for the conventional and MBOH mortgage options varies according to income, credit and savings. Some loans are specifically targeted to lower and middle-income families, while other loans require evidence of substantial income or savings.
There are various conventional loan options in Montana. The Montana Mortgage Company cites several of its convention loan options, including fixed rate mortgages, fixed rate balloon mortgages, adjustable rate mortgages, fixed rate with temporary buydown mortgages and interest only mortgages. Additional conventional loan options include no verification mortgages and 100 percent financing mortgages. Conventional loan options vary widely across the state of Montana. Borrowers who are unable to find suitable conventional loans with one lender should search for other lenders who may offer a different range of options.
NeighborWorks Montana is a program that assists low and middle-income families to find suitable loans in order to buy a home. Three factors contribute to program eligibility the prospective homeowner's credit, income and family size. The NWMT program offers loans for 15 or 30-year terms ranging from $1,000 to $20,000 with interest rates ranging from 0 percent to 6.25 percent. NWMT has a $350 loan-packaging fee for all loans plus additional fees that vary according programs and individual factors. Programs offered under NWMT fall into five categories, including:
Loans in all of the above categories are available across the state of Montana with the exception of the State Home Deferred 2nd Mortgage Program. Loans in this category are not available in counties that have HOME funds available. Qualifications for these loans also vary. Specifically, borrowers seeking a TANF loan must have at least one child under the age of 18 living at home. Most of the other loans require the borrower to be a first-time homebuyer, a single parent with a child or children, or disabled.
The MMM Program works specifically with four groups of residents of the state of Montana to get a mortgage: Native Americans, Section 8 Homeownership Program clients, households that include a person with a disability, and full-time employees in jobs, such as teaching, firefighting, law enforcement or healthcare. Under this program borrowers must meet additional eligibility requirements, including:
In addition to the above eligibility requirements, the borrowers income must fall at or below 80 percent of the area median income for family size. The maximum loan allowed under this program is $236,840. The program uses a 30-year fixed rate loan that has no origination or discount points.
Anyone living in Montana, excluding people falling within the city limits of Billings, Bozeman, Great Falls, Helena and Missoula, are considered to live in a rural area and may be eligible for the Rural Development Program (RD). The purpose of this program is to provide rural homebuyers with an alternative to traditional loans that require substantial down payments. While this program does not have asset limits, it does have certain income limits that vary depending on location and the number of people living in the home. Eligible homeowners should be first-time buyers unless they are in a targeted area. Furthermore, eligible homeowners must also plan to make the home their primary residence for the duration of the loan. In addition to borrower eligibility requirements, there are some property criteria requirements. The home must be a single-family residence that does not exceed $236,840
The Rural Development Loan Leverage Program offers a two-pronged loan. The first part of the loan is taken with MBOH for 10 to 15 percent of the purchase price. The second loan is taken through the RD for the rest of the purchase price. A low fixed interest rate is set for the MBOH loan; however, the RD loan interest rate varies.
Eligible veterans may be able to obtain a no down payment loans from the Veterans Administration Guarantee Program. In order to obtain these loans veterans must meet certain income limits and plan on using the home as their primary residence. Borrower eligibility and property criteria requirements are the same as those for the MMM program.