You want to buy a house in Big Sky Country, but every time you save up for a down payment for your dream house, you have an emergency and are forced to dip into your savings account.
Maybe you have enough for a down payment on a home, but you don’t quite have enough cash for closing costs and moving expenses.
What if you are just a little short on money, and your dream house just came up for sale? How will you be able to make an offer on the house if you don’t have enough money for closing costs?
The good news is that there may be a program sponsored through the State of Montana or the federal government that will provide just the help you need. Read on to learn about these programs for low or medium-income buyers or first-time home buyers.
Best Montana Loans & Grants for Low-Income Home Buyers
Here are some of the best programs for low-income or at least first-time home buyers in Montana.
Regular Bond Loan Program
This program works with FHA, VA, RD, or HUD-184 loans, which are 30-year, fixed-rate loans. Through this program, Montana Housing pays 1% of the origination fee to the lender.
There are qualifications for this specialty loan. First, you have to purchase a house in targeted areas within the state. There is a limit on the price of the home you can buy, and you must live in the home as your primary residence. There are also income requirements that you must fall under to qualify for the loan.
SetAside Loan Program
This program was started as a way to remove barriers to homeownership. As long as you meet the eligibility requirements, you may qualify for a 30-year, fixed-rate loan. The state will pay 1% of the origination fee to your lender.
You must be a first-time homebuyer who will be living in the residence to qualify for this program. You also need to purchase a home in a targeted area.
Down Payment Assistance
Perhaps you can qualify for a loan on your own, but you need help with your down payment for your new property.
If you need cash for a down payment, you can borrow from $1,500 to $40,000 for such a purpose. You can immediately begin paying off this additional loan, or you can defer the payment until you sell your home in the future.
80% Combined Program
If you qualify for this unique program, you obtain two mortgages for purchasing your home. The first one is for 80% of the purchase price, and it is a 30-year, fixed-rate loan.
The second mortgage is for 20% of the purchase price. A Montana non-profit helps you with this loan, such as Neighborworks 20+ Community Second Program or the Human Resource Development Council.
The benefit of receiving two different loans is that you are not required to purchase mortgage insurance for not having 20% down on the home.
Learn as much as you can about low-income and first-time loan programs that are available in Montana before you begin looking for a home. You may save yourself time by limiting your search for homes in areas that qualify for one of the previous programs.
Best Federal Mortgage Options for Low-Income Buyers
It’s not only the state of Montana that offers programs to make it easier for Americans to purchase homes. The federal government wants to help you buy a house too. Keep reading to learn about available federal programs.
HUD’s Public Housing Program
If you live in a home that qualifies as public housing, you may be able to buy your rental home with HUD’s public housing program.
FHA Home Loan Program
If you have steady employment and you are interested in buying a home as your primary residence, you may be able to qualify for a loan even if your FICO score isn’t superior. The better your FICO score, the less money you need to put down on your home.
If your credit score is above 580, you could qualify for a loan with just 3.5% down.
If your credit score is 500-579, you could qualify for a loan with 10% down.
One of the other benefits of this program is that the closing costs are rolled into the loan, so you don’t need additional cash to pay for the closing when you sign the papers for your house.
If you would like to buy a home in a rural area of Montana, this program would allow you to buy a house without a down payment. Interestingly enough, 97% of the U.S. is in an eligible location for this loan.
Another benefit of this program is that your mortgage insurance premium (which you will need to purchase when you don’t put 20% down on your home), is half a percent cheaper than the premium for USDA mortgages.
This program is meant for low and moderate-income home buyers.
This list is not complete. For more information regarding first-time home buyer grants, visit this article on our website.
Best Private Lender Programs in Montana for Low-Income Home Buyers
If you don’t qualify for the grants or programs listed above, you might want to check out the HomeReady mortgage program offered by Fannie Mae.
This program is designed for low to moderate-income buyers, and there is no income or geographic restrictions. This could be the perfect program for your situation. Read on to discover whether or not you qualify.
The requirements are that you have not owned a home in the past three years. You must also pass a risk assessment, which looks at your credit profile. The mortgage company will look at the property’s appraisal, and finally, they will evaluate your ability to repay the loan.
This loan is a fixed-rate loan and must be a single unit primary residence.
This program requires a down payment of only 3% of the value of the house.
Are you concerned about qualifying for a loan? There are mortgage companies that specialize in loans to first-time home buyers.
Get the Help of a Professional
Buying a home is a complicated process. Don’t try to do it on your own. Talk with a professional in the real estate industry who will help walk you through the process.
Let us help you find one of the best real estate professionals in your area. This Clever Partner Agent knows about home purchasing programs at the state and federal level. Your agent will help you find a lender. He or she will be familiar with grants and programs to help you with your down payment or mortgage insurance. Your agent will assist you in finding the perfect home for you, and once you have found one, your agent will negotiate with the seller for the best price on your behalf.
Reach out to us to learn more about Clever’s Closing Cost Assistance Program. Clever buyers who spend more than $150,000 can get a $1,000 rebate to help cover their closing costs.
If you are searching for a home in Montana, let a Clever Partner Agent help.