Every Montana Down Payment Assistance Program, Compared

Montana Housing, the homebuyer arm of the Montana Board of Housing, runs seven programs a Montana buyer can actually use. Most lenders mention one of them, usually whichever one they have closed before. That is a disservice, because the programs price differently, and the gap between the best fit and the default suggestion is real money.

Here is all seven, side by side, with what each one is for and where each one hurts.

What the seven programs are, at a glance

All rates below are Montana Housing posted rates effective 08/07/26 and reset periodically. Treat them as a snapshot, not a quote.

Which two actually matter if you are short on cash

Four of the seven are first mortgages with no assistance attached. They help with the rate, not the cash to close. If your problem is the down payment itself, you are choosing between two products.

Bond Advantage DPA pairs a 5.75% first with a second at 5.75% amortized over 15 years. You get help with the cash, and you pay it back on a schedule, starting with your first payment. The second is a real monthly obligation that counts in your debt-to-income ratio and shrinks the loan amount you qualify for on the first.

MBOH Plus 0% Deferred pairs the same 5.75% first with a second at 0.00%, and defers it. No monthly payment, no interest accruing at a meaningful rate. In exchange, the income limits are the tightest in the lineup: $80,000 for a one- or two-person household, $90,000 for three or more, as of the 08/07/26 program terms.

For most cash-short buyers who fit the income limit, MBOH Plus is the better product. It is not close. A deferred second at zero costs you nothing monthly and does not eat your qualifying ratios the way an amortizing second does. Bond Advantage exists for buyers over the MBOH Plus income limits who still need help with cash.

What a deferred second actually means when you sell or refinance

This is the part people misunderstand, and it is worth being blunt about.

Deferred does not mean forgiven. The MBOH Plus second is a real lien recorded against your house. You make no monthly payment and it does not amortize, but the balance sits there until one of three things happens: you sell the house, you refinance the first mortgage, or you pay off the first mortgage some other way. At that point the second is due in full from the proceeds.

Practically, that means:

• At sale. The second comes off the top of your proceeds at closing, the same way the first does. If you bought with a deferred second and sell three years later into flat prices, you may walk away with less than you expect, because you are repaying assistance out of appreciation that has not happened yet.
• At refinance. Many refinances require the second to be paid off or resubordinated. Resubordination is possible and routine, but it is a request, not a right, and it adds a step and a timeline to a refinance.
• Never. If you stay in the house for thirty years and pay the first off, the second is still due at that point.

None of this makes MBOH Plus a bad deal. Free money for the term of your ownership is a good deal. But go in knowing you are borrowing, not receiving.

The honest part: bond money is not always the cheapest money

Montana Housing bond programs are funded by tax-exempt bonds, and the rate they can offer moves with the bond market, not with the conventional mortgage market. Some months the bond rate is meaningfully below market. Some months it is not.

A buyer with a solid contribution, a 740 score and stable W-2 income can often beat 5.75% on a straight conventional loan, avoid the county limits, avoid the recapture rules and avoid the extra paperwork. If that is you and you do not need the down payment help, run both. The bond program is a tool for a specific problem: cash to close, or income that qualifies you for a below-market rate. It is not a default.

Where the bond programs win decisively: you need the down payment and you fit the income limits. Nothing on the conventional side gives you a zero-percent deferred second.

Where they lose: you have the cash, you have strong credit, and the posted bond rate is at or above what you would get anyway. Then you are accepting limits and rules for no benefit.

The Montana Veterans Home Loan Program is the outlier

At 4.50% effective 07/24/26, this is the lowest posted rate in the lineup by three quarters of a point, with a loan limit of $538,036 and no income, purchase price or asset limits at all. That combination does not exist anywhere else in Montana.

The constraint is the first-time buyer rule: you must never have owned a principal residence. Not "not in three years." Never. That rule disqualifies a large share of veterans, and it is the reason this program is undersubscribed relative to how good it is. The rate also resets roughly every two weeks, so a number you were quoted a month ago is not the number today.

The Mortgage Credit Certificate, which is not a loan at all

Montana Housing also administers a Mortgage Credit Certificate program. An MCC is not assistance with cash; it is a federal income tax credit for a portion of the mortgage interest you pay each year, for as long as you hold the loan and live in the home. It carries its own county-specific income and purchase price limits.

An MCC can be worth more over a long hold than a one-time down payment assist, and it is routinely forgotten. Ask about it specifically.

How the limits work

Every bond program except the Veterans program is governed by county income and purchase price limits, and MBOH Plus layers its own household income cap on top. Those tables change and vary by county and household size, which is why we do not reproduce them here: a stale table is worse than no table. Check the current figures at commerce.mt.gov before you assume you are in or out.

We wrote a separate piece on how household income is counted for these programs, because it is not the same as the qualifying income on your loan application, and that difference disqualifies people who assumed they were fine.

One more thing worth checking before you assume you need a program at all: the minimum down payments by loan type are lower than most buyers expect, and our walk-through of how much you actually need down in Montana runs the arithmetic at the state median. If you are buying inside city limits in Missoula, Billings or Great Falls, the city-level assistance funds stack on top of the state programs and are administered separately.

What to do with this

Three questions, in order:

1. Do you need cash to close, or just a better rate? If just a rate, compare the bond rate to a straight conventional or FHA quote before you accept the program's restrictions.
2. If you need cash, does your household income land under $80,000 (one to two people) or $90,000 (three or more)? If yes, MBOH Plus 0% Deferred is almost certainly your answer.
3. Have you ever owned a principal residence, and did you serve? If never and yes, price the Montana Veterans program against everything else first.

Run the payment both ways before you decide. The difference between an amortizing second and a deferred second shows up in your monthly number immediately, and in your qualifying ceiling right behind it. For what homes are actually selling for in your county, see our Montana market data.

This article is educational and is not a commitment to lend. Program terms, rates and limits change; verify current figures with Montana Housing and with us before making a decision.