Down Payment Assistance

Bridging the "Affordability Gap"

Many people face challenges to home ownership. Maybe you are caught in a renters trap;  you can afford a house payment, but are having a hard time saving funds for down payment and closing costs. Or, you may face an "affordability gap" where the amount of a loan you qualify for isn't high enough to purchase a home in your area.

The Montana Board of Housing (MBOH) partners with several groups statewide to address these challenges. Our partners include cities, counties, non-profits, lenders, employers and others who are willing to step in and help make home ownership happen. These housing partners apply to MBOH for funding, called set-aside funds. The various partners are able to contribute anywhere from $1,500 to $40,000, depending on your need, location, and their program limitations. The partner's help can be a second loan that requires payments, or the payment on these second loans may be deferred until you sell your home. It is important for you to know that these are loans, and not grants. Down the road when you sell your home, the non-profit gets paid off, and can use that money again to help someone else buy a home.

The interest rate on our set-aside loans is currently 3.125%.

Score Advantage Down Payment Assistance Program (DPA)

The Score Advantage Down Payment Assistance (DPA) Program was established to help borrowers who are eligible for Montana Board of Housing (MBOH) financing, but who lack funds for down payment and closing costs. Montana Board of Housing provides a minimum $1,500 and a maximum of $6,500 (5% of the Purchase Price maximum) towards DPA in combination with funds for 30-year FHA, VA, Rural Development or HUD-184 loans. The DPA loan is an amortizing junior loan on the property closed in the lender's name and assigned to the Montana Board of Housing. Both are fixed-rate loans, with no prepayment penalty. Interest rates are based on credit scores at time of application – borrowers with higher credit scores enjoy lower rates!

"How to" upload documents into Lender Online!

Score Advantage DPA Program Lender Training (Required - Contact Julie Hope at 406-841-2851)

Terms and Conditions (10/15/15)

Frequently Asked Questions

Informational Flyer

Score Advantage DPA Program Approved Lender List

First Time Homebuyer Education (Required)

MBOH Quick Reference Guide (06/08/15)


Lender Documents to Reserve a Score Advantage DPA Loan:

Score Advantage Borrower Stat Sheet (10/14/15)

Recapture Notice to Mortgagor


Lender Documents to Close a Score Advantage DPA Loan and submit to MBOH:

Score Advantage Loan Submission Voucher (02/09/16)

Score Advantage Subordinate Loan Note (11/11/15)

Score Advantage Subordinate Trust Indenture (11/11/15)

MBOH Uniform Rider to attach to first-lien Trust Indenture

Mortgagor's Affidavit

Seller's Affidavit

Notice to Mortgagor of Maximum Recapture Tax Method to Compute

Early Delinquency Counseling Form


Except as outlined above, all terms, conditions, definitions and program criteria applicable to the Regular Bond Program, set out in the Mortgage Purchase and Servicing Agreement and the Terms and Conditions of the 2015 Homeownership Program will apply to loans originated under the MBOH Score Advantage DPA Program.   Additional resources not linked to on this page are available by contacting MBOH at 406-841-2840.


Neighborworks Montana (NWMT) Statewide Down Payment Assistance Second Mortgage Program

Brief Description: For many borrowers, the barrier to owning a home is saving up the funds necessary to cover the one-time closing costs that must be paid up-front when purchasing a home. MBOH partners with cities, counties, non-profits, lenders, employers and others who are willing to step in and help make homeownership happen. Most of these programs have a limited geographic area in which they provide assistance. NeighborWorks Montana can provide down payment assistance anywhere in the state not covered by other programs. NHS offers various programs, some deferred and others amortized.

Check their web site for detailed information under Loan Program Details.


Borrower Eligibility Criteria:

  • Income limits: up to 125% of median family income per household size unless using FHA first Mortgage then 115% median income max. Amortizing Second Mortgage Program (ASMP); limit of 200% of poverty for TANF Program with at least one child with legal relationship under age 18 in household

  • First-time homebuyer(s); not mandatory for Amortizing Second Mortgage Program; single head of household with dependent children (mandatory for TANF program), or have a disabled family member.

  • Home must be primary residence for the duration of the loan

  • Asset limitations of $5,000 liquid cash, and $70,000 total family assets

  • Must have completed NWMT-approved homebuyer education

  • If already receiving TANF cash assistance, may not be eligible for TANF program.


Second Mortgage Loan Criteria:

  • ASMP loan range $1,500-$10,000; TANF loan range $3,000 to $7,500 (may go to $20,000 where genuine need exists)

  • Interest rate and term varies by borrower's income range, from 1.5% and 30 years for borrowers at or below 50% area median income (AMI) to 7.25% (changes quarterly ­check web site) and 15 years for those at 81% AMI or higher

  • Total purchase price cannot exceed $236,840


Underwriting Criteria:

  • ASMP maximum LTV of 105% without valid compensating factors

  • ASMP and TANF maximum ratios of 29/41 unless valid compensating factors apply

  • Packaging, Title Insurance and recording fees apply


Down payment Requirement:

  • For ASMP, borrower must provide a minimum of $1,000.00 of own funds


Application Process:

  • For ASMP, send to NWMT office in Great Falls using reservation checklist; allow 2 weeks processing time

  • For TANF, requires specific TANF loan application in addition to lender 1003 form. Allow four weeks processing time.

  • For more information, contact NeighborWorks Montana


Frequently Asked Questions

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Yes. Each borrower in this program is required to take an approved home buyer education class. MBOH-approved classes can be located at the Neighborworks Montana website .

MBOH prefers borrowers take an on-site class. If a local class is not available, the local Home Buyer Education provider may refer buyers to an on-line alternative, and combine the on-line course with a one-on-one session to obtain a certificate. Access to the on-line course can only be provided by the local instructor, to ensure the correct on-line class is completed.

Co-signers are allowed in the program, provided the file underwrites to the standards set by FHA, VA, RD or HUD, based on the applicant’s income only, and co-signers do not take ownership interest in the property and do not appear on title (such as cases involving non-occupant co-borrowers).

No. Just like the Regular Bond Program, all parties who appear on title to the property must meet all criteria of the Regular Bond Program, which includes occupancy, prior ownership limitations and income limits.

Yes. The Score Advantage DPA loan is a 15-year, fixed-rate second loan with no prepayment penalties. Monthly payments are required. The interest rate is based on borrower’s credit scores. Borrowers with higher credit scores will receive lower interest rates than borrowers with lower scores. A table with the interest rates is included in the Terms and Conditions for the Score Advantage DPA program.

Yes, provided they meet criteria established by each program, and contribute a minimum of $1,000 to the transaction. MBOH Score Advantage DPA loan must be a second-position lien on the property. Additional requirements will apply if other DPA programs include amortizing loans. For instance, payments for all amortizing loans must be included in calculations while underwriting the first mortgage, to prevent a homeowner from being placed in an unsustainable mortgage.

Yes. Lenders will underwrite loans to standards required by FHA, VA, RD or HUD. MBOH does not provide underwriting guidance, and does not waive underwriting criteria set by the insuring entity

No. Both loans will be serviced by the same entity – either through the lender’s normal process under the MBOH Mortgage Purchase and Servicing Guide, or by MBOH directly.

No. Montana Veterans’ Home Loan Program loans are sold to the Montana Board of Investments, not to the Montana Board of Housing.

No. MBOH Score Advantage DPA loans can only be used in connection with a purchase-money mortgage sold to MBOH under the Regular bond Program.

Yes. The borrower’s contribution can be a gift. There can be no cash back to the borrower on the HUD-1.

Maybe. The property and transaction must meet all criteria established by FHA, VA, RD, or HUD.

No. MBOH only requires title insurance on the first-position loan.

No. Loan originators underwrite the purchase-money mortgage according to the criteria set out by whichever entity is insuring or guaranteeing the loan (FHA, VA, RD, or HUD), while taking into consideration the principal and interest payment of the second loan.

Lenders are allowed to collect up to 1% at closing from the buyer. MBOH will provide an additional 1% compensation by purchasing the first-position loan at 101%. If lenders elect MBOH as servicer for the DPA program, MBOH will also pay 0.75% Service-release premium, for a total possible lender compensation of 2.75%.

A borrower’s mid-credit score is used to determine the rate. In cases involving multiple loan applicants, MBOH will look to the borrower with the HIGHEST mid-credit score to determine the rate. Both loans will have the same rate of interest.

Lenders will submit loan requests for both, first- and second-loan funds via fax, using the Fax Cover Sheet and supporting documents found on the Score Advantage DPA web page. Once loans are committed into Lender Online by MBOH staff, all information will be available to loan originators to proceed with closing.

The Score Advantage DPA loan can be up to 5% of the purchase price, with a maximum assistance of $6,500.

Home buyers must invest a minimum of $1,000 of their own funds in the purchase. The lender’s DPA application fee can be included in this amount.

Lenders can earn up to 2.75% compensation on the first-position loan, and up to $175 on the DPA loan.

No. Lenders who currently service loans under the Regular Bond Program continue to service their portfolio under the criteria set out in the MBOH Mortgage Purchase and Servicing Guide. Only first- and second-loans originated under the MBOH Score Advantage DPA program will be serviced by MBOH.

Yes. MBOH will base the interest rate for the DPA program on the higher mid-credit score.

Lenders are allowed to collect $175 from the borrower. MBOH reimburses lenders for the DPA loan at par.

Borrowers with no credit history (a credit score of zero) may be eligible for the DPA program. The originating lender must confirm the loan application meets underwriting standards set by FHA, VA, RD, or HUD.

All criteria under the Regular Bond Program will apply to the DPA program, including income limits, purchase price limits, prior ownership limits, and business use limits. Please refer to the 2014 Invitation to Participate and the Mortgage Purchase and Servicing Guide .

The minimum DPA loan amount is $1,500.

The program is designed to assist borrowers eligible for the Montana Board of Housing (MBOH) Regular Bond Program, but lack funds for down payment and closing costs. This program will be of greatest assistance to borrowers financing their home purchase with an FHA-insured loan, which requires a 3.5% borrower contribution towards down payment. Home buyers will receive two loans from their local lender. The first-position loan will be a traditional 30-year loan, and the Score Advantage DPA loan will be a 15-year junior lien on the property.

MBOH will reimburse lenders for DPA loan funds when the first-position loan is purchased. Lenders can obtain Purchase Advice documentation via Lender Online.

MBOH is a designated "Instrumentality of Government", and as such, is authorized to provide this assistance statewide. Some other organizations also have this same designation, but only within their governmental jurisdiction. Loan originators work closely with local organizations to provide prospective home buyers with all available financing options.

Rates for loans under this program are determined by the borrower’s credit score. Higher scores benefit by receiving a lower mortgage rate. Both loans bear interest at the same rate to support the program.

No. If MBOH is selected by the lender to service DPA program loans, the servicing will transfer to MBOH at closing and the first mortgage will be purchased at the original loan amount.

No. The interest rate is set at closing, and is fixed for the life of the 15-year loan.

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301 S. PARK AVE, STE 240 | PO BOX 200528 | HELENA, MT 59620-0528 | P: (406) 841-2840 | F: (406) 841-2841 | TDD: (406) 841-2702 | TOLL FREE: (800) 761-6264