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FHA Loans in Montana

By Michael Stradford
Updated October 29, 2019
3 min read
Big Sky, Montana

Living in “Big Sky Country” means big home loan expectations, and more than likely a big home loan question mark. “Which type of home loan is right for me?”

Homes are a big investment, and an FHA loan in Montana is one mortgage option residents find appealing for multiple reasons. With an FHA Loan, buyers can dodge a high down payment and work with a not-so-perfect credit score. Keep reading to find out why an FHA loan in Montana may be right for you.

Why choose an FHA Loan in Montana?

Montana is a great candidate for an FHA loan since the average home cost is above the national average. This can make down payments with conventional loans a bit hefty. Luckily, many Montana residents realized they could save money with an FHA loan. As of April 2019 the total value of FHA loans in Montana was $26 million!

Benefits of using FHA Loans in MT

  • FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
  • FHA mortgage rates are typically lower than conventional mortgage rates.
  • FHA down payment and credit score requirements are typically lower than conventional loans
  • Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
  • FHA loans are assumable

FHA Loan Limits in Montana

Since there are maximum loan amounts for Montana FHA loans, you'll want to have some idea of how much you can borrow before you start shopping. The maximum loan limit in Montana is adjusted every year and, for 2019, starts at a baseline limit of $314,827. This amount is adjusted in areas with a higher cost of real estate, so regardless of your location, you'll be able to afford a house. For example, in Bozeman the maximum loan limit is $412,850. Use the table below to check the loan limit in your area.

Montana FHA Loan Limits by County

County FHA Loan Limit
Flathead $318,550
Gallatin $412,850
Jefferson $316,250
Lewis and Clark $316,250
Madison $325,450
Missoula $334,650
All other areas $314,827

Are You Eligible for an FHA Loan in MT?

You may be eligible for an FHA loan, if you:

  • Have 2 years of steady employment, preferably with the same employer.
  • Have had steady income (or increasing income) in the past two years.
  • Have had less than two 30 day periods of late payments on your credit report.
  • Have declared bankruptcy no less than two years ago and have maintained good credit since.
  • Have not been a party in a foreclosure for at least three years and have maintained good credit since.
  • Anticipate your mortgage payment will be equal to or less than 30% of your gross income.

What Do You Need to Apply for an FHA Loan in MT?

Buyers must be able to provide the following information and documents as requested by lenders:

  • The addresses of all your residences over the past two years.
  • The names of your employers over the past two years.
  • W2's for the past two years and current paycheck stubs.
  • Your current gross monthly salary.
  • Your Social Security Number.
  • Names, addresses, and account numbers with balances on all checking and savings accounts.
  • Addresses and loan information of any other real estate you owned.
  • Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
  • Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.

Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.

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