First-Time Homebuyer Programs in Montana

The down payment on a new home is often the biggest hurdle for first-time homebuyers. In Montana, where the average home value is $463,962, you'd need a down payment of $92,792 to avoid buying private mortgage insurance.

First-time homebuyer programs in Montana help make homeownership more accessible. Some mortgages let you make a smaller down payment, but they often have income limits and require mortgage insurance. MoneyGeek breaks down state and government-backed programs to help buyers from different financial backgrounds.

Montana offers grants and loans to assist first-time homebuyers in covering down payment and closing costs. We compiled first-time homebuyer programs provided by the Montana Board of Housing to help you find the best option for your particular needs and situation.

The Regular Bond Loan Program offers low-interest, fixed-rate 30-year mortgages for eligible first-time homebuyers and veterans. The program makes homeownership more affordable by providing financing with reduced interest rates and requiring a minimum borrower contribution. It supports various loan types, including FHA, VA and USDA loans. It can be paired with down payment assistance to reduce upfront costs and is available to single-family homes and certain eligible properties.

The 80% Combined Program offers a 30-year first-position mortgage loan paired with a second mortgage to cover down payment and closing costs. The first loan provides up to 80% of the home’s purchase price, while the second mortgage covers the remaining 20%, eliminating the need for private mortgage insurance. The program lowers upfront and ongoing monthly costs, making homeownership more accessible to first-time buyers or those purchasing in targeted areas.

The Veterans' Home Loan Mortgage Program offers eligible Montana veterans a 30-year fixed-rate mortgage with below-market interest rates for buying a primary home. Participating lenders originate the loan, which the Montana Board of Investments purchases and holds. The Montana Board of Housing services the loan. The maximum loan amount is $485,391.

The Bond Advantage Down Payment Assistance Program helps eligible Montana homebuyers cover down payments and closing costs. It provides up to 5% of the home's price, capped at $15,000, as a 15-year loan with low monthly payments. Paired with a 30-year fixed-rate first mortgage from the Montana Board of Housing, it ensures consistent interest rates. Borrowers must contribute at least $1,000, which can be gifted, offering flexibility.

The MBOH Plus 0% Deferred Down Payment Assistance Program offers a second mortgage for down payment and closing costs. This loan is interest-free and payment-free as long as you stay in the home. You can receive assistance up to 5% of the home's purchase price, with a maximum of $15,000. The loan is deferred until you sell, refinance or no longer use the home as your primary residence.

In addition to Montana's statewide first-time homebuyer programs, some cities offer their own assistance to help residents achieve homeownership. The table below highlights a city in Montana with a program for first-time homebuyers.

In Montana, zero-down-payment loan programs allow you to purchase a home without putting money down. USDA and VA loans are government-backed options with no down payment.

USDA loans assist homebuyers in rural areas, benefiting those who may not qualify for traditional mortgages. The U.S. Department of Agriculture issues USDA loans through its Rural Development Guaranteed Housing Loan program. This initiative provides affordable loan options to boost homeownership in less populated regions.

USDA loans offer several benefits, including no down payment, making homeownership more accessible for those with limited savings. They often have lower interest rates than conventional loans, reducing borrowing costs. These loans are for primary residences and are available to eligible applicants who meet specific criteria.

To qualify for a USDA loan, your property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Income limits vary by location. For example, the income limit for a four-person, low-income household in Madison County, Montana, is $68,700; in Park County, Montana, it's $76,900.

VA loans from the U.S. Department of Veterans Affairs are for veterans, active-duty service members and certain National Guard and Reserve members. They offer home financing with benefits tailored to those who have served.

VA loans come with several advantages, including a no-down payment option. They don't require private mortgage insurance, which can save you money over the life of the loan. VA loans also typically offer lower interest rates than private loans. As of November 2024, the APR for a 15-year fixed-rate VA loan in Montana is 6.07%. For a 30-year fixed-rate VA loan, it's 6.34%.

To qualify for a VA loan, you must meet eligibility requirements, including service length, duty status and character of service. You must also meet location-based income limits and obtain a valid certificate of eligibility (COE).

First-time homebuyers in Montana can access low-down-payment loan programs for financing their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA and conventional loans are often compared as the most common mortgage types. FHA loans require a minimum down payment of 3.5%, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements than FHA loans.

As of November 2024, the APR for a 15-year fixed-rate conforming loan in Montana is 6.11%, whereas the APR for a 15-year fixed-rate FHA loan is 8.08%. FHA loans can have higher APRs due to the additional fees and costs of borrowing money on government-backed loans.

Our FHA vs. conventional loan calculator below can help you compare both mortgage programs and determine the best option.

We answered frequently asked questions about first-time homebuyer programs in Montana to help you find the best option and move closer to owning a home.

Explore additional MoneyGeek resources for first-time homebuyers in Montana to help you with the homebuying process.