Happy couple sitting on the front porch of their new home

Setaside Loan Programs

The Setaside Program was created to purchase first mortgages benefiting home buyers who receive down payment assistance from sources approved by our governing Board. Partner organizations generally require borrowers to be at or below 80% of area median income to receive down payment or gap financing. The Setaside Program also allows first mortgage programs offered to target populations to remove barriers to homeownership.

Lenders: reserve Setaside Loans in Lender OnLine under Series 006 and choose one of the programs below.  In addition to uploading the Borrower Stat Sheet and Home Buyer Ed certificate, lenders must also upload the appropriate sponsor letter or award notice to receive a commitment at the lower Setaside Rate.  


Program Offers

  • Loan insured or guaranteed by FHA, VA, RD or HUD-184
  • 30 year, low fixed rate , fully amortized loan
  • Serviced locally by lender or Montana Housing
  • MBOH pays 1% of the origination fee to the lender
  • Current available Setaside Program Loans:
    • NeighborWorks Home Deferred 2nd Mortgage
    • CAP NWMT Kalispell Community Land Trust
    • Missoula Combined HRDC XI HOME Funds
    • Bozeman District IX HOME Funds
    • Home$tart Program, HUD Section 184
    • Dream Makers, City of Billings, & Lot Refinance

 Borrower Eligibility

  • Must be a first time homebuyer
    • Not owned a principal residence any time in past three years
    • Homeownership requirement not applicable in certain *targeted areas:
      • Counties: Blaine, 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 residence
  • Buy/Sell amount cannot exceed Purchase Price Limits

 Program Requirements

  • Purchase loans only (No refinances)
  • First Time 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
    • Except Wind/Hail can be $2,500 or 1%
  • IRS Recapture tax provisions apply

Property Requirements

  • Single family, fee simple residential property
  • Manufactured homes eligible if Post-1976, de-titled & on a permanent foundation
    • Appearance & functionality of a stick build house
  • New construction allowed; property & improvements must be completed prior to closing


Additional Useful Information:

Regular Bond and Setaside Program Terms and Conditions (2017)

Frequently Asked Questions

First Time Homebuyer Education

MBOH Quick Reference Guide


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 . Additional resources not linked to on this page are available by contacting MBOH at 406-841-2840 and asking for a Program Specialist.

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

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