The Montana Housing home loan program that is best for you will depend on several factors such as credit score, debt ratios, income and the purchase price of your home. Contact a Montana Housing approved participating lender. They are your best resource to answer questions and to qualify a buyer for a loan. Be sure to tell them you want a Montana Housing loan.
The funds used to purchase loans are from tax-exempt bonds called Mortgage Revenue Bonds, therefore the Internal Revenue Service (IRS) imposes seven eligibility requirements all borrowers must qualify under:
- Income and Purchase Price Limits
- The residence must be a borrower’s primary residence
- Trade or business use cannot exceed 15% of the residence’s total area
- Be a first-time homebuyer (not owned a principal residence during the previous three-years; some exceptions apply)
- Funds must be used to purchase a home, no refinancing
- Recapture Tax is a possibility
Regular Bond Program is a 30 year, low-interest rate loan and is geared toward first-time homebuyers when their income and purchase price is below the posted limits. This program has income limits based on all members of the household 18 and older. The home can be located anywhere in Montana and includes single family homes, condos and manufactured homes. To be eligible for Montana Housing programs, a homebuyer must first qualify for an FHA, VA, RD or HUD-184 first mortgage loan.
Down Payment Assistance or a "Subordinate Loan" can be combined with any of our loan programs to help homebuyers with funds needed to purchase a home. If cash at closing is your challenge, a Montana Housing Down Payment Assistance Second Mortgage can help. Learn more here.
Special Programs were created for homebuyers who receive down payment assistance or qualify for programs offered by non-profits, local governments or other partner organizations that have been approved by the Montana Board of Housing. Examples include Habitat for Humanity, Community Land Trusts and NeighborWorks. These organizations generally require borrowers to be at or below 80% of area median income. These special programs offer first mortgages at reduced rates to target populations to remove barriers to homeownership.
80% Combined Program provides homebuyers who are eligible for Montana Housing financing with an alternative to an FHA-insured loan, eliminating the need for mortgage insurance. The 80% Combined Program is a 30-year first-position mortgage loan at 80% Loan-To-Value (LTV) that is paired with a second loan at 20% Loan-To-Value (LTV) offered by a partnering non-profit.
Montana Veterans’ Home Loan Program provides first mortgage funds to Montana residents serving or who have served in the military through the federal armed services and the Montana National Guard. Program funds are provided from the principal of the Montanan Coal Tax Trust Fund; income and purchase price limits do not apply. Montana Housing administers the Program, with the Montana Board of Investments (MBOI) purchasing the mortgages. The mortgage interest rate is 1% lower than market and assists eligible Veterans purchase their first home. Please talk with your Participating Lender about other limitations that may apply.
Mortgage Credit Certificate, also known as an MCC, is a dollar-for-dollar tax credit that reduces the amount of federal income tax paid by a first-time homebuyer. The tax credit is equal to 20% of the mortgage interest (not to exceed $2,000) paid during the tax year. Under this program, the homebuyer selects and attaches the federal income tax credit to a mortgage loan; Montana Housing loans are not eligible for MCC. The homebuyer must meet the same IRS eligibility requirements as the Montana Housing loan programs. Lenders can use this tax credit to help qualify the buyer for the loan. It is important to remember that this is a tax credit and not a loan.
Mortgage Credit Certificate (MCC) Re-Issuance: In the event a borrower who receives an MCC refinances their mortgage loan, Montana Housing may, but is under no obligation, elect to re-issue such MCC in accordance with the terms and conditions as set forth in the Mortgage Credit Certificate Guide. However, the MCC will be reissued for the amortized balance of the original loan, even if the loan amount is increased in the refinance.