MONTANA DOWNPAYMENT ASSISTANCE PROGRAMS
The 80% Combined Program is an alternative for purchase loan options for borrowers in areas that do not qualify for Rural Development (RD) loans. Montana Board of Housing (MBOH) offers you loans at 80% or less loan-to-value (LTV), eliminating mortgage insurance. To be an eligible borrower, you have to be a first-time homebuyer; this rule doesn’t apply if you buy in a targeted area.
The 80% Combined Program requires that all properties must meet all FHA appraisal standards. Another requirement is for families which have to contribute 1% of the purchase price from their own funds (cannot be gift funds) with a minimum of $1,000 because no cash back is allowed at closing. You are also required a 640 minimum credit score. You have to attend a homebuyer certified course and earn a certificate. You are also required to consent to early foreclosure prevention counseling.
The 80% Combined Program offers you a 4% interest rate for a 30-year mortgage loan. A special requirement is that no singlewide manufactured homes are allowed. The property has to be owner-occupied and no more than 15% of the total residential area can be used in trade or business. Every application has to be approved in DU.
1. Montana Board of Investments Residential Loan Program (BOI) is a special program opened to all buyers which offers terms of 15, 20 or 30 years. It is special because it hasn’t many restrictions but a lot of advantages. To become an eligible borrower, the property has to be your primary residence and you have to leave in residential neighborhood where can be 1 to 4 family units.
Montana Board of Investments Residential Loan Program requires no income limits, no investment restrictions and you have not to be a first-time homebuyer. Another special thing is that you need no qualification. As for the property, refinances are available and the loan types agreed are: Freddie Mac/Fannie Mae, FHA and VA. Backed loans are as well accepted; however VA loans may not exceed 65% exposure to BOI. Instead, for loans that are not insured by FHA or VA full appraisal is required.
Montana Board of Investments Residential Loan Program allows a 30, 60, 280, 240-day locks, but it charges a 1/2% cancelation fee. Interest rates vary daily; that’s why you are advised to contact a specialized lender who can guide you through the application process.
2. Disabled Accessible Affordable Homeownership Program (DAAHP) is a program designed for disabled people for construction, acquirement or rehabilitation of their home. You have to be a first-time homebuyer and have a permanent disability. Your maximum gross annual income (after specific exclusion for adaptive equipment) cannot exceed $50,000. Your home is supposed to be your primary residence for the life of the loan.
Disabled Accessible Affordable Homeownership Program allows a single Family home, townhouse, condo or manufactured home. Your home is required to incorporate architectural modifications to accommodate mobility impairment of purchaser or disabled family member.
DAAHP strongly recommends that you attend a specialized education course which allows you to understand the program’s requirements and limits. The interest rate varies between 2.75% and 5.0% and it allows no cash back to borrower(s). The property also meets a series of limitations such as: a limit of 15% use for Business, land should limit to 35% of the value of property for new construction on private water or sewer and the parcel size cannot exceed 40 acres, with no subdivision of land possible. For any other information and assistance, you are advised to contact a specialized lender who can guide you through the application process.
3. Habitat for Humanity Loan Program is a first-time homebuyer purchasing program for buying a primary residence. You may qualify for this program if you are a Habitat-partner homebuyer and if you meet the income limits according to Habitat criteria.
Habitat for Humanity Loan Program offers you a fixed first mortgage at 2% and a “wrap around Habitat Second loan” at 0%. If your home is in a targeted area, the first-time homebuyer restriction may be waived. There are no asset limitations. The limit of 15% use of the property may be for business and the purchase price of the land has to be limited to 35% of the appraised value. The maximum size of the property has to be of 40-acre, with no subdivision or sale of land possible. Hazard insurance $1,000 deductible all peril is also required. A homeowner certificate has to be earned through one of the NeighborWorks Montana’s network partners across the state which offers in-depth classes on all aspects of homeownership.
Habitat for Humanity Loan Program allows a fixed rate of interest on the Mortgage Loan which shall be 2.0% per annum and the term of the Mortgage Loans has to be for a maximum of 30 years. The Mortgage Loans will provide for complete amortization by maturity (equal monthly payments of principal).
4. Montana Veterans' Home Loan Program was created as a way to honor all service men and women in the state of Montana. If you are serving or have served, if you’re no longer active duty (honorable or not dishonorable discharged) in eligible military service, may become an eligible borrower. The program is also available for never-remarried surviving spouse of a deceased eligible veteran killed in the line of duty.
Montana Veterans' Home Loan Program offers you a 30-year amortized first mortgage rate, 1% below the current market rate. Qualified borrowers must contribute at least $2,500 of their own funds. You have to be a first-time homebuyer resident of Montana, with a fully filled income tax in Montana for the previous year. You may also commit a minimum of $2,500 of your own cash into the purchase transaction. Instead, there are no income or asset limitations, but you have to maintain home as your primary residence. Otherwise, you will have to pay off the loan within 12 months (refinance or sale of property). Loan must be insured by FHA, VA, or HUD 184.
Montana Veterans' Home Loan Program requires to have earned a certificate of completion with an approved homebuyer education provider.
5. Mortgage Credit Certificate Program (MCC) is a first-time homebuyer non-refundable tax credit loan (unused credit can carry forward up to 3 years). To become an eligible borrower you have to be a first-time homebuyer or to buy in a targeted area or to be an eligible veteran. You will receive a tax credit of up to 20 % of the annual interest paid on your mortgage (up to $2,000). The remaining 80% of mortgage interest remains an eligible itemized deduction.
Mortgage Credit Certificate Program requires no asset limitations, but the home has to be your primary residence, either single Family home, townhouse, or condominium. The program allows manufactured homes, with or without land and a 15% limit for business use. A 35% land-to-value requirement applies to new construction only; this rule doesn’t apply to properties based on public water or sewer. You have to contact a specialized lender to guide you through the application process and offer you the necessary information.
Mortgage Credit Certificate Program requires home buyer education which is absolutely mandatory if the loan file shows certain risk factors. These factors are: your credit score is below 680, the front ratio is above 31% or the back ratio is above 41%.
6. Score Advantage Down Payment Assistance Program (DPA) is a program set to help eligible borrowers who lack funds for down payment and closing costs, by offering assistance as an amortizing second loan up to $6,500. The program is in fact a combination between two loans – one for the home, and a second mortgage for down payment and closing costs. If you are an eligible borrower, you may benefit of an interest rate between 1% and .25% according to your credit score; the higher your credit score, the lower your rate.
Score Advantage Down Payment Assistance Program is guaranteed by the Government through FHA, VA, HUD184 or RD credit types for the first loan, but insured junior lien for the second loan. For the first-position loan, the program allows a 30-year amortization period and for the DPA second loan a 15-year amortization period.
Score Advantage Down Payment Assistance Program requires to have earned a certificate of completion with an approved homebuyer education provider. On the MBOH webpage you will find a listing of MBOH-approved providers. For any other information and assistance, you are advised to contact a specialized lender who can guide you through the application process.