Opinion

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Letter

New Down Payment Assistance Program Aims to Shrink Affordability Gap

The MBOH Plus program is offered in the form of a second mortgage loan that has no monthly payment

Often in Montana, potential homebuyers can afford a monthly mortgage payment but can struggle to save enough money for a down payment and closing costs. Many of these borrowers face an “affordability gap,” the difference between what they can afford to purchase and the actual cost of the home. This barrier is often the main reason someone decides buying a home is just out of reach.

The Montana Board of Housing’s (MBOH) mission is to help reduce housing barriers for all Montanans. That’s why the new MBOH Plus 0% Deferred Down Payment Assistance Program or MBOH Plus, is an exciting new tool that will help more Montanans become homeowners. Our new program is offered to all potential homebuyers and provides up to $6,500 of deferred funding to help fill that so-called affordability gap.

The MBOH Plus program is offered in the form of a second mortgage loan that has no monthly payment, and is due upon the sale of the home when the homeowner pays their first mortgage loan. To be eligible for the MBOH Plus program, the borrower must qualify for a 30-year fixed-rate mortgage through the Montana Board of Housing, have income within established limits, occupy the property as a primary residence and have a minimum 620 credit score. All the loans purchased by the Montana Board of Housing are serviced in state by our staff or the lending partner originating the loan.

While lenders may offer down payment assistance programs, not all of them are always beneficial to the borrower. If a lender’s down payment assistance program sounds too good to be true, it probably is. Always make sure to compare interest rates and the amount of costs and fees being rolled into your loan amount. Chances are, those fees are much higher than the MBOH Plus program.

Interested homebuyers should contact a participating mortgage lender to find out if they qualify for our program. For a current list of participating lenders, visit the Montana Board of Housing website at housing.mt.gov.

Bruce Brensdal, executive director
Montana Board of Housing

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