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.


Click here to compare MBOH 's DPA programs

 

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!

 

Program Offers

  • 1st mortgage loan insured or guaranteed by FHA, VA, RD or HUD-184
    • 30-year, Fixed Rate based on mid-credit score, fully amortized loan
  • 2nd mortgage up to 5% of purchase price
    • 15-year, uninsured junior lien, fully amortized
    • Min. $1,500 – Max. $6,500 loan amount
    • SAME interest rate as 1st mortgage
  • Serviced locally by lender or the Board of Housing
  • MBOH pays 1% of the origination fee to the lender

Borrower Eligibility

  • Must be first time homebuyer
    • Not owned a principal residence any time in past three years
    • Homeownership requirement not applicable in targeted areas
      • Counties: Blane, Sanders, Deer Lodge, Silver Bow, Flathead, Mineral, Missoula & Hill
      • Census Tracts: Gallatin County 6 & 11.01 and Lincoln County 2
      • City of Great Falls
  • Must be at or below annual household Income limits
    • Includes ALL people 18+ years expected to live in the residence
  • Buy/Sell Agreement cannot exceed Purchase Price Limits
  • Minimum credit score to participate is 620

Program Requirements

  • Purchase loans only (No refinances)
  • Homebuyer Education REQUIRED to participate
  • NO cash back at closing; principal reduction only
  • Owner-occupancy required for life of loan
  • Hazard Insurance deductibles required $1,500 or 1% of dwelling coverage
    • ALL perils included
  • IRS Recapture tax provisions apply
  • Minimum $1,000 borrower contribution
  • $175 application fee for 2nd mortgage loan

Property Requirements

  • Single family, “fee simple” residential property
  • Attached land of residence must maintain basic livability & not provide income source
  • Manufactured homes eligible if Post-1976, de-titled & on a permanent foundation
    • Appearance & functionality of a stick build house
  • Condominiums & Townhomes in multiple dwelling units structure
  • New construction allowed; property & improvements must be completed prior to closing

 

Other Useful Information:

Score Advantage Down Payment Assistance Program Terms and Conditions

Frequently Asked Questions

First Time Homebuyer Education

MBOH Quick Reference Guide

Whole Loan Submission Voucher Details

 

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

MBOH Plus 0% Deferred Down Payment Assistance Program

The purpose of this program is to provide assistance for down payment and closing costs to borrowers eligible for Montana Board of Housing (MBOH) financing under the Regular Bond Program (Bond Program). This program places a second mortgage lien on the property of up to $6,500. These DPA loans are offered in conjunction with Montana Board of Housing first mortgage purchase loans through MBOH participating lenders only.

 

Program Offers

  • 1st mortgage loan insured or guaranteed by FHA, VA, RD or HUD-184
  • 2nd mortgage up to 5% of purchase price
    • Deferred uninsured junior lien
    • Min. $1,500 – Max. $6,500 loan amount
    • 0% Interest and NO monthly payments
    • Due in full upon Sale, transfer of property or refinance of 1st mortgage
  • Serviced locally by lender or the Board of Housing
  • MBOH pays 1% of the origination fee to the lender

Borrower Eligibility

  • Must be first time homebuyer
    • Not owned a principal residence any time in past three years
    • Homeownership requirement not applicable in targeted areas
      • Counties: Blane, Sanders, Deer Lodge, Silver Bow, Flathead, Mineral, Missoula & Hill
      • Census Tracts: Gallatin County 6 & 11.01 and Lincoln County 2
      • City of Great Falls
  • Must be at or below annual household Income limits
    • Includes ALL people 18+ years expected to live in the residence
  • Buy/Sell Agreement amount cannot exceed Purchase Price Limits
  • Minimum credit score is 620 & back-end ratio cannot exceed 43%

Program Requirements

  • Purchase loans only (No refinances)
  • Homebuyer Education REQUIRED to participate
  • NO cash back at closing; principal reduction only
  • Owner-occupancy required for life of loan
  • Hazard Insurance deductibles required $1,500 or 1% of dwelling coverage
    • ALL perils included
  • IRS Recapture tax provisions apply
  • Minimum $1,000 borrower contribution
  • $100 application fee for 2nd mortgage loan  

Property Requirements

  • Single family, “fee simple” residential property
  • Attached land of residence must maintain basic livability & not provide income source
  • Manufactured homes eligible if Post-1976, de-titled & on a permanent foundation
    • Appearance & functionality of a stick build house
  • Condominiums & Townhomes in multiple dwelling units structure
  • New construction allowed; property & improvements must be completed prior to closing  

 

Other Useful Information:

MBOH Plus 0% Deferred Program Terms and Conditions

Frequently Asked Questions 

First Time Homebuyer Education

MBOH Quick Reference Guide

Whole Loan Submission Voucher Details

 

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 2017 Homeownership Program will apply to loans originated under the MBOH Plus 0% Deferred DPA Program.   Additional resources not linked to on this page are available by contacting MBOH at 406-841-2840

 

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MONTANA HOUSING | MONTANA DEPARTMENT OF COMMERCE
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