City of Billings Community Development Department
Affordable Housing Development Programs
Home funds are available to encourage development of vacant lots city wide. Incentives offered include funding for land acquisition and site improvements in support of new affordable housing activities.
Community Housing Development Organization (CHDO)
Program HOME funding is available to encourage the development of affordable housing for low and moderate-income households. The funding is available to both for-profit and nonprofit organizations and is intended to provide gap financing to help develop such projects. Similar funding is available for nonprofit Community Housing Development Organizations (CHDO's).
Consolidated Plan
The Consolidated Plan is prepared by the Community Development Division and is intended to be a strategic planning document that identifies the community's affordable housing needs and provides a five-year strategy for utilizing resources to meet those needs. Individuals interested in having input into this document, which serves as the basis for investment of federal housing resources to the community, should contact the Community Development Division.
First-Time Homebuyers
Program Funding is available through the HOME Program to provide assistance to help low-income families (incomes less than 60% MFI) to purchase a home. This assistance includes help with down payments, closing costs, and funding to address repairs designed to assure the home remains affordable to the family. Low-interest (6.0%) acquisition loans provided through the Montana Board of Housing are also available through this program.
City of Billings Affordable Housing
 
homeWORD is a nonprofit organization based in Missoula and Billings, Montana dedicated to:
- developing affordable housing that is designed to be energy-efficient, environmentally and economically sound, respectful of residents and the community at large, eminently replicable, and most importantly, empowering for low-income families
- offering homeownership and financial fitness classes, down-payment assistance, and pre-purchase and foreclosure prevention counseling
- working closely with city and state government entities advocating for housing, lending, and development best practice policies that affect those we serve as well as performing outreach to educate the community on such issues
- creating community-building opportunities for residents, neighborhoods, and stakeholders to ensure healthy and community-valued affordable housing
First Time Homebuyer Class Information
What is an RC&D?
Established in 1969, the Beartooth RC&D serves as a regional entity for the cooperative efforts of 5 counties in South Central Montana in rural and economic development. The leadership of this non-profit corporation is comprised of elected officials and community leaders from the counties, incorporated towns and cities, conservation districts and tribal reservations. The RC&D began as an unique partnership with the USDA Natural Resource Conservation Service and Beartooth began with Stillwater and Carbon Counties. During the years Beartooth RC&D has expanded to include Yellowstone, Sweet Grass and Big Horn Counties. In February of 1996 the Economic Development Administration of the US Department of Commerce designated Beartooth RC&D as the Economic Development District for the region.
Explore our site and learn more about how the grass roots effort of the Beartooth RC&D touches communities and in turn improve the lives of people within those communities.
We are - citizens building stronger communities!
Mission
The RC&D is sponsored and directed by local people as a regional vehicle to improve the economic and social conditions through the conservation, utilization and development of the natural and human resources of the area.
Beartooth Resource Conservation & Development Area, Inc. provides a means to focus the resources of people with various backgrounds, expertise and points of view. People working together can develop and implement a plan which will address problems or issues that affect their quality of life.
The RC&D is essentially "Citizens Building Stronger Communities".
Federal Housing Programs
USDA Rural Development loans and grants are available to assist rural Montana with Single Family Housing, Multi-Family Housing, and essential Community Facilities needs. Rural Development partners with local lenders, community groups and local, state and federal funding sources.
RURAL DEVELOPMENT SINGLE FAMILY HOUSING PROGRAM
The Single Family Housing program provides homeownership opportunities to very low, low and moderate-income rural residents through several loan, grant and guarantee programs. The program also provides loans and grants to individuals to finance the vital improvements necessary to make their homes decent, safe, and sanitary.
RURAL DEVELOPMENT MULTIFAMILY HOUSING PROGRAMS
Section 515 Rural Rental Housing Loans
Increased home prices have resulted in a higher percentage of renters throughout the nation. More facilities are needed to meet the demand. The multi-family housing Section 515 program provides financing to build, purchase or repair apartment style housing for low to moderate income residents in rural communities with a population of up to 20,000 people. Financing is also available for rental assistance subsidies.
The housing must be modest in size, design, and cost, but adequate to meet the tenants needs. Rent charges must be within limits that eligible occupants can afford to pay.
Eligible applicants include individuals, trust, associations, general partnerships, limited partnerships, State or local public agencies, profit, and nonprofit corporations. Nonprofit corporations may be organized on a regional or multi-county basis. Loans to non profits may be up to 100 percent of the appraised value or development cost, whichever is less.
GUARANTEED LOAN PROGRAMS
A number of guaranteed loan programs at or below market rates are available for qualified home buyers. Financial institutions in partnership with Montana Board of Housing make guaranteed loans available to Native Americans and those living in rural settings. The Veterans Administration offers guaranteed loans to eligible service members, veterans, and unmarried surviving spouses.
HUD Section 184 Indian Housing Program The Indian Home Loan Guarantee Program is a new and innovative housing program to enable Native American families and Indian Housing Authorities to gain access to sources of private financing. An Indian who will occupy the property as a principal home and has met certain credit and underwriting standards is an eligible borrower. An Indian Housing Authority is an eligible applicant as well. IHAs may borrow funds for the development of single family homes that may be subsequently sold to eligible borrowers. To apply, visit any approved lender (financial institution) and apply for a mortgage loan.
The Montana Board of Housing set aside $1,000,000 in recycled mortgage funds to provide the permanent financing for qualifying lower income individuals for single family homes located on trust land on an Indian Reservation that are guaranteed by HUD through section 184 for Native Americans. The Board worked with local banks, Tribal representatives, Bond Counsel, State and Regional HUD officials to get special consideration and guarantees from the Secretary of HUD in Washington D.C. to enable the Board to participate in this program.
Contact:
Montana Board of Housing
(406) 841-2840
VA GUARENTEED HOME LOANS FOR VETERANS
The U.S. Department of Veteran Affairs (VA) guarantees loans made by mortgage lenders to eligible military veterans, active duty military service members, certain members of the National Guard and Selective Reserves, and certain un-remarried surviving spouses of deceased veterans. The purpose of a VA Guaranteed loan can be to purchase, build, or improve personal residences, or to refinance an outstanding mortgage on a home. Properties securing VA loans must meet acceptable Minimum Property Standards. The VA does not require a down-payment and the maximum loan amount is determined by the lesser of the appraised value or the cost of the home. "Cash out refinance loans" are limited to 90% of the appraised value of the home. Applicants must be determined to be a satisfactory credit risk and have sufficient income to repay the loan and certify they intend to occupy the property as their permanent place of residence.
To apply for a Certificate of Eligibility for VA Loan Guaranty Benefits, a veteran should complete a Request for Determination of Eligibility, VA Form 26-1880, and submit it with proof of military service to the nearest VA Regional Office. Further information about VA loans:
VA Regional Loan Center
Box 25126
Denver CO 80225
1-888-349-7541
HUD/FHA MORTGAGE INSURANCE AND CONVERSION PROGRAMS
The Federal Housing Administration helps homebuyers become homeowners through its mortgage insurance programs. A FHA insured loan is available to anyone with a satisfactory credit record, an income sufficient to afford the mortgage payments and adequate savings to cover a low down payment and closing costs. Homebuyers wishing to obtain an FHA insured mortgage should contact any FHA approved lending institution such as a Bank, Mortgage Company, Savings and Loan or Credit Union.
Section 203B Insured Loans This program is limited to owner occupant buyers for the purchase of a new or existing one-to-four unit dwelling. The down payment requirement is 3% of the first $25,000 of the purchase price, 5% of the difference up to $125,000 and 10% of the difference over that amount.
The maximum mortgage FHA can insure depends on local housing prices. For example, the maximum mortgage can range from a low of $86,317 to more than $202,500 depending on the number of units in the dwelling and the County in which it is located. Contact a lender for information on maximum mortgage limits in your area and to apply for a FHA insured mortgage.
Contact:
MONTANA DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PROGRAMS
MONTANA FINANCE INFORMATION CENTER
Montana Board of Housing
The Montana Board of Housing was created by the Montana Housing Act of 1975. The Board is an agency of the State and operates within the Department of Commerce for administrative purposes.
Under the Housing Act the Board does not receive appropriations from the State's general fund and is completely self-supporting. Substantially all of the funds for the Board's operations and programs are provided by the private sector through the sale of tax-exempt bonds.
The powers of the Board are vested in a seven member Board, appointed by the Governor, subject to the confirmation of the State Senate. The Board provides policy direction to the agency staff, authorizes bond issues, approves development financing and evaluates Board Housing Programs. These programs include the Single Family Program, Recycled Single Family Program, Multifamily Loan Programs, Low Income Housing Tax Credit Program and the Reverse Annuity Mortgage (RAM) Program.
MONTANA BOARD OF HOUSING
Frequently Asked Questions from Billings First Time Homebuyer Applicants
The following is a list of the most common questions we receive. Purchasing a home is a major decision and responsibility and if you have any questions please call this office and or talk to the professionals involved in helping you buy a home.
Is this where I come to buy a home if I have bad credit?
The City does not look into your credit history. Our assistance is provided to eligible applicants that are able to receive a loan from a lender for the mortgage financing. The lender has certain criteria for underwriting their loans. If your credit is less than desirable the lender will let you know and you are entitled to receive a credit report and explanations on why you were denied at this time. Ask your lender what you can do to change the situation and how long it might take to do so. In the brochure is a list of Housing Counselors, these agencies can help you get on the right track.
I applied for the program and received a preliminary approval letter from you. Does this mean I qualify to buy a home?
The City basically looks at 2 things. First, we verify that you haven't owned a home in the last 3 years and that your income is within the guidelines for receiving assistance. This means we only look to see that your income is not above our maximum guidelines. Your income may be such that you cannot qualify to buy a home or may not be high enough to buy the home you want. Lenders will look at your income and they figure that 29% is what you can use to make your house payments. They will also look at your current debts (regular monthly installment debt credit cards, car payments etc.). This figure should be no more than 41% of your income including house payment. These factors determine the price range to look for when purchasing a home. The other factors to determine purchasing a home are outlined in the first question. The lender therefore is the one that determines if you qualify to buy a home.
What price home do I qualify for?
Again the lender determines what price range you qualify for looking at your debt to income ratios, the current interest rate and the amount of assistance you receive.
I had a job that had me over the income limits but now I am on unemployment, do I qualify for your program?
The City looks at your current income situation but, we have to make sure that our program does not provide opportunities for abuse. Therefore we look at your income for the last 3 years before determining if you qualify. If your situation has changed from a previous year we won't automatically disqualify you but, we will fully analyze your situation before giving approval. Things we look at are unemployment situation, temporary leaves of absence, workman's compensation etc.
I work more than one job which puts me over the limit. What if I or a member of my family quits one of these jobs?
Our program assists those most in need. We must assure that our program is not abused in any way. Although having more than one job to make ends meet is not always desirable, we cannot get into a situation where a person does something to qualify and then possibly gets the job back after receiving our assistance.
What if my income changes at a later date?
If your income changes after receiving preliminary approval we need to have the information immediately. From the time that you apply for our program until the closing on a purchase your income will be scrutinized by the lender, their underwriters, as well as the Board of Housing. If any of these parties discovers something that wasn't disclosed or a change it can ruin the transaction which can be very disheartening. If you are getting a raise, a second job or anything that changes your income, you need to disclose it. If your income should change after you have purchased a home you are not effected by this.
Why is there a $3,500 asset limit?
Technically if you have $3,500 or more in cash assets, you have enough money to purchase a home. It may not be enough to purchase a particular home but, it does give you the resources to buy a home. Remember, our program is designed to assist those most in need. Sometimes our applicants have this money in a savings account and they have outstanding credit cards or student loans. You may want to get these items addressed and if you are then below the $3,500 asset limit you would qualify. A housing counselor or your lender can help you with this.
Why do you need income on people over the age of 18 when the house will be in just my name?
Once again we have to assure that our program is not abused. A person purchasing a home may have a spouse that has bad credit and together couldn't qualify for a home with this credit situation or 2 adults may be living together. These situations are allowed but we do look at the fact that if someone over 18 is living in your home any income they receive can help with living expenses and needs to be looked at for qualification.
Who should be getting you the information regarding our application?
Responsibility for receiving the application, tax returns, good faith and buy-sell falls on the applicant. Many lenders and Realtors will do this for the applicant, but the applicant should be the one that makes sure we receive all the pertinent information. This lets you maintain control and lessens the possibility for error and keeps you informed.
I am a displaced homemaker and have owned a home in the last 3 years. Do I qualify?
We look at each applicant's situation individually. A displaced homemaker can qualify but we need to assess the home that was owned jointly. Did you receive any funds from terminating your portion of ownership? If so what was the amount, do you still have these funds, how were the funds spent?
I own a mobile home. Do I qualify?
This depends on a number of situations. The age of the home, do you own the land, the condition of the home. You will be required to sell the home. If you sell the home, will you receive enough proceeds to purchase a home without City assistance?
Can I buy a "Manufactured Home"?
This program can only assist homes that are stick built (built on the site) therefore manufactured or mobile homes do not qualify. The only exception to this is with a true "Modular Home". A modular home is on a permanent foundation and has been certified to meet all the criteria for a stick built house. These homes can be placed in a residential neighborhood without getting special zoning. Manufactured homes can only be placed in areas that allow manufactured housing. Caution: Some areas may have manufactured homes in a residential area. These homes were built before zoning may have been in place and are considered grandfathered in. We cannot assist with these so you must research such homes thoroughly before making an offer to purchase.
Does the City have homes for sale?
No the City doesn't sell homes. We only provide financial assistance in purchasing a home.
How do I buy a HUD Home?
FIM homes are homes that HUD has received through foreclosure. Your Real Estate Agent is authorized to show these homes and assist people with making offers.
Can I buy a home in Lockwood?
No. The City's program can only assist with purchases that are in the City limits. Lockwood is not in the City limits. There are also pockets of land around the City that are not considered in the City. We cannot assist with these and if in doubt ask your Realtor to research this for you.
I applied for the program last year. Do I need to apply for the program again?
We can only keep an application active for 6 months. After that time you will need to fill out a new application with any tax returns we may not have.
Do I have to use a Real Estate Agent to buy a home?
You do not need to use a Realtor to buy a home but buying a home can be a complicated and emotional experience. I think it is wise to use a Realtor to assist in buying a home. They have a strong knowledge of the process and can make the purchase proceed smoothly. If you don't use a Realtor I would caution that you obtain some type of legal advice and not let the seller control the sale. Although they may be honest in working with you the bottom line is that they are going to do what's in their best interest. I also would recommend that while searching for a home, use a Realtor that is not the listing agent. The listing Realtor will be honest and work with you but their responsibility is to get what's best for their seller and using a separate agent, they will work for you and you will have representation.
Do I have to attend the City's Homebuyer Workshop? Can I wait until I find a home so that I don't waste my time if I can't find a home?
Attending the workshop will probably be the most important thing you do regarding buying a home. The workshop covers the whole process and will answer many questions you may have or never thought to ask. The workshop will be attended by other applicants with their own set of questions and you should come away with the feeling that will make you feel comfortable with the journey you are about to embark on. Don't wait to attend. These workshops are only given once a month and you don't want to get into a situation where this requirement holds up or destroys your purchase. Even if you can't purchase a home at this time you will at least have the knowledge you need when you do finally go through the process. It is better to get all the information beforehand rather than after to avoid needless mistakes.
How long do I have to find a home? Once I'm approved don't you hold the funds for me?
Funds are available until they run out for the year. As the program has gained popularity the funds have diminished quicker. We receive our funding in July and last year we ran out of funding in November. Funds are not committed until we receive from an applicant that has received preliminary approval, a copy of the buy-sell and a good faith estimate. At that time we inspect the property and issue an authorization for the lender to proceed. This commits the funds. If funds go as fast as they did last year, I would recommend that you talk to your lender or call our office regarding the status of funding before making an offer to purchase. Good communication can avoid major disappointment.
Do I have to pay the loan back to the City?
Yes. The City's funds are given as a deferred loan. Upon issuance you will sign a Trust Indenture and Deed Restriction outlining the terms and conditions. These terms are for the length of the mortgage (30 years). If you move out of the home, sell it or change it's use, you 'II trigger paying back the loan. If you pay back the loan you only pay the amount that was loaned. There is no interest charged.
I heard that if we use the City program, we cannot take out a loan on the property. Is this true?
Yes, the terms of the loan allow certain conditions in which we would forgive paying back the loan. Because of these conditions the City puts itself at greater risk if we allow the homeowner to remove the equity from the home through a home equity loan. The City remains in what is known as a second position behind the mortgage. This means that should you default or sell the home, the mortgage gets paid first then the City receives it's funds with any remaining funds going to the homeowner. Often lenders will ask us to take a third position behind the home equity loan which we will not do for the reason just stated. Many of our applicants have taken out home equity loans as they have gained equity and used a portion of the funds to repay us the funds assisted. This will release the restrictions on the property. The City then reinvests the funds into our program allowing us the opportunity to assist another applicant.
The City program inspected my home, does this mean that it is safe and up to code? Do I need to have a home inspection?
Although the City's Inspection is fairly thorough. We are not certified inspectors that guarantee the condition of the home. When the City inspects your home we look at a number of things: Is the size of the home suitable to the size of the family, Do the bedrooms meet code? Are the mechanics of the home proper? Does the home meet minimum criteria for livability? We try to determine if this home is in safe condition or can be made so under the scope of our program. The results of the inspection are what we perceive the house to be. The appraiser's inspection is to determine the value of the home and not to guarantee the condition. It is a good idea for you to get a licensed inspector if you are not sure of the condition of the home.
The City inspected my home and it was determined that repairs are needed. Who is responsible for these repairs?
Repairs the City requires generally are items that the seller should have repaired before selling the home and we encourage you and your lender to get the seller to make these repairs. We realize that in some cases the seller can't or simply refuses to make the repairs and if this is the case you have the option of using some of the City's funds for these repairs. This needs to be approached with caution though because there can be hidden problems leaving you no recourse. The appraiser may also require repairs and these should definitely be completed by the seller. The appraiser is basically giving a value to the property on the condition that these repairs are made. This should not be an added expense for the home buyer.
If we choose to have the work done through the City Program, how do we proceed? What if we have trouble with the contractors?
The City will not assist with the repairs until you have purchased the home. Before you purchase the home you will need to get bids from licensed contractors skillful in doing this work. YOU pick the contractors, they will give you a bid which you will give me a copy. The City will make sure the contractor is not barred from doing federally assisted work and that is the extent of our involvement. It is your responsibility to choose the contractor, review the proposal, and accept the bid. The contractor should work through you (not the City, the Realtor, the seller nor the lender). If the work is not satisfactory, it is your responsibility to remedy this with your contractor. If the seller is responsible for the repairs then make sure these items are satisfactorily completed before you take possession of the property. Your Realtor should be assisting with this.
Can you inspect the home before we make an offer to purchase it?
Our staff and resources are small and we can not afford the time involved to make an inspection for property that does not yet have an offer accepted. Your Realtor should have the knowledge and resources to determine if a home is going to meet the requirements without major additional expense. Once you turn in a copy of the buy-sell to our office we will as soon as feasibly possible do an inspection. This should ideally be done when you can be there to go through the home with me as I do the inspection. This way we can discuss any concerns that may come up.
If I buy the home and discover a problem with the house, who is responsible for the repairs?
This has happened on occasion and that is why I stress the importance of you the home buyer being comfortable with your purchase by having qualified people assist you. Older homes are not always perfect and repairs are going to arise. If you aren't sure about the furnace, water heater, sewer, roof or any item in the home have these items checked by the proper people. Have the seller fill out and sign a disclosure statement on the condition of the home. If any problems occur after you have taken possession, resolving these issues is between you and the seller and may have to be addressed in civil court. Ask your Realtor what they will do to assist you if this should occur. Extreme caution should be practiced regarding this because you are liable for providing the burden of proof that the seller knew of an existing problem. | 
