Get help with your down payment and closing costs in Billings
For many, the biggest roadblock to buying a home in Billings is the big chunk of money required for the down payment and closing costs.
Luckily, many local and national programs offer help to Billings residents, especially if this is your first home or haven’t owned a home within the past three years.
The following is a partial list of available programs. We go into greater detail of the programs in our book “Move: A Strategic Guide to Buying a Home in Billings.” Contact us for a complimentary copy of the book.
Federal Home Loan Bank
The Federal Home Loan Bank offers three programs that assist eligible homebuyers with down payment and closing cost funds,
The Home$tart program offers up to $7,500 to income-eligible borrowers. To receive aid, you must participate in a Federal Home Loan Bank-approved homebuyer education program and earn up to 80 percent of the Billings’ median income.
An area’s median income (based on family size) may change from year-to-year but you can find the current guidelines on the Department of Housing and Urban Development (HUD) website.
Unlike the aforementioned programs, these funds come in the form of a grant.
- Home$tart Plus
The Home$tart Plus program is for Montana homebuyers who are currently receiving public housing assistance and it provides a maximum of $15,000 in assistance. You will be required to complete a financial literacy program and your annual household income must not exceed 80 percent of Yellowstone County’s median income.
There are also restrictions on the price of the home you want to purchase and how long you must remain in possession of the home.
- Native American Homeownership Initiative
Eligible Native American households may receive up to $15,000 in down payment and closing cost funds assistance.
Teacher Next Door
A grant program for Montana educators, the Teacher Next Door program supplies grants (they don’t have to be repaid) up to $4,170.
Teachers (grades Pre-K through 12) as well as school staff and administrators may qualify for a minimum $1,000.00 grant to be used towards the purchase of a home.
Good Neighbor Next Door
Administered by HUD, the Good Neighbor Next Door program offers a 50 percent discount off the list price of a home for Billings residents in the following professions:
- Law enforcement officers
- Pre-Kindergarten through 12th grade teachers
- Emergency medical technicians
The home must be in one of HUD’s revitalization areas and listed for sale through the Good Neighbor Next Door Sales program.
Housing Grants for Medical Professionals
Housing grants from $1,000 to $6,000 to eligible Billings medical professionals, including medical staff, nurses and doctors.
Montana Board of Housing
MBOH (Montana Board of Housing) offers several down payment assistance program to Billings residents. You’ll need to qualify for a MBOH mortgage loan first.
- Score Advantage Down Payment Assistance Program — A second loan up to $6,500. The loan carries a fixed rate and there is no prepayment penalty. You must obtain your mortgage through a program-approved lender and we’re happy to help you find one.
- Neighborworks Montana — Designed for low-income Montana residents, it is especially ideal for families who receive TANF (Temporary Assistance for Needy Families. The assistance comes in the form of a second mortgage loan in amounts from $1,500 to $10,000. You will need to contribute $1,000 cash up front.
- MBOH Plus 0% Deferred Down Payment Assistance Program — This, too, is a second mortgage program with assistance up to $6,500. Qualifications include being eligible for Montana Board of Housing financing under a program known as the Regular Bond Program.
HomeNow Down Payment Gift Program
The Montana and Idaho Community Development Corporation offers a state-wide down payment assistance that doesn’t have to be repaid.
To be eligible to receive the 3.5 percent to 5 percent of the loan amount “gift,” the borrower must:
- be able to qualify for a 30-year, fixed-rate mortgage, guaranteed by VA, HUD or FHA.
- have a credit score of 640 or higher.
- plan on occupying the property as the primary residence.
HRDC Road to Home Program
While HRDC is located in Bozeman, they offer help with down payments to Billings homebuyers. Like the previously mentioned programs, this help comes in the form of a second loan. The borrower must be a first-time homebuyer, complete a homebuyer education course and contribute at least 1 percent of the first loan amount. There are income eligibility requirements as well.
City of Billings
The City of Billings offers several programs to assist residents with their home purchase.
- First-Time Homebuyer Program — If you plan on purchasing a home within the City of Billings, and you are considered a low-income homebuyer, you may be eligible for a deferred payment loan from the city. There is no fee for obtaining the loan, no interest and no monthly payment is required. The loan must be repaid, however, when you sell or refinance the home or move out. These loans are typically available at the end of July each year and remain available until the funding runs out. In other words, it’s first-come, first-served, so move quickly if you want to take advantage of this program. Income restrictions apply, the borrower must contribute at least $1,000, complete a homebuyer education class and there are restrictions on home price.
- Homestart Savings Program — This is a grant program that will match the homebuyer’s savings 3 to 1, up to $5,000. This grant doesn’t have to be repaid if you live in the home for at least five years.
- Neighborhood Housing Services — A second mortgage program, the city offers up to $5,000 in down payment and closing cost assistance. The interest rate and repayment period is determined on an individual basis.
- American Indian Homeownership — Billings residents of American Indian ancestry and incomes up to 150 percent of the area median income may apply for this program. It’s a second mortgage, up to $5,000, with low interest rates. Applicants must have a stable income and good credit history.
Habitat for Humanity
If your current housing situation is inadequate because of one or more of the following reasons, consider applying for the Habitat for Humanity program:
- It is overcrowded (more than two people sharing one bedroom)
- The kitchen and/or bathroom isn’t functioning
- There are problems with the heating or electricity
- There is structural damage
- The home lacks facilities for those with physical disabilities
Other eligibility considerations include that you have been a Yellowstone County resident for at least one year, you can afford a monthly mortgage payment of about $700, you are a low-income household and you must not have judgments or bankruptcy on your credit record.
Finally, you must complete at least 350 hours of sweat equity labor, helping Habitat for Humanity build homes. No previous construction experience is required and there are non-construction duties you can perform to meet the hour requirements.
Although we aren’t lenders, The Realty Billings Team is happy to share what we know about these programs and to introduce you to qualified lenders for each program.