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A Mortgage One Point Below Market, Paid For by the Coal Trust — and No Income Limit

The Montana Board of Housing runs a first-time-buyer mortgage programme for eligible veterans out of $50 million or more of the Montana housing trust. The interest rate must be one percent below the Fannie Mae delivery rate or one percent below the board’s own lowest rate on other home loan programmes, whichever is less. There is no income limit, and the borrower puts in at least $2,500.

Verified August 23, 2026

What this benefit is

The Montana Board of Housing runs a first-time-buyer mortgage programme for eligible veterans out of $50 million or more of the Montana housing trust. The interest rate must be one percent below the Fannie Mae delivery rate or one percent below the board’s own lowest rate on other home loan programmes, whichever is less. There is no income limit, and the borrower puts in at least $2,500.

What it's worth: One percentage point off the mortgage rate, on up to 95% of the statewide allowable purchase price

  • This is CREDIT, not a grant. What it is worth is the interest saved against the alternative rate, not the size of the loan, and it is repaid in full.
  • The one-point discount is a statutory floor on generosity in one direction only: the rate is 1% below the Fannie Mae delivery rate or 1% below the board’s own lowest rate on its other programmes, WHICHEVER IS LESS.
  • The weight is a rough annual interest saving on a typical Montana first purchase, not a promise about any particular loan.

Who is entitled to it

  • The programme runs to the eligible veteran, and the definition includes Guard and reserve service.
  • An unremarried spouse of an eligible veteran killed in the line of duty is inside the definition.
  • The programme is for a home you will own and occupy.
  • You are in this state.

Not sure whether that describes you?

Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.

How to claim it

  1. 1Check the definition before assuming you are outside it. An eligible veteran is a Montana resident who is or has been a member of the Montana National Guard, is or has been in the federal reserve forces under Title 10, or is serving or has served on federal active duty under Title 10 — Guard and Reserve service counts on its own.
  2. 2The discharge test is stated in the definitions and is wider than most: "under honorable conditions" expressly includes honorable and general discharges, and excludes dishonorable and other-than-honorable ones.
  3. 3You must be a first-time home buyer. That is on the face of §90-6-603 and is the main thing that rules people out.
  4. 4Complete a board-approved first-time home buyer education programme. §90-6-604 makes it a condition, not a recommendation.
  5. 5Budget at least $2,500 of your own money toward the loan. The board may waive that minimum, so ask rather than assume.
  6. 6There is NO income limit. That is unusual for a subsidised mortgage programme and is stated expressly in §90-6-604.
  7. 7The loan cannot exceed 95% of the value of the statewide allowable purchase price the board determines, and must be secured either by a government guaranty or by conventional mortgage insurance.
  8. 8Apply through a participating financial institution. The board buys the mortgage from the lender; it does not lend to you directly, and individual institutions have participation caps.
Form
Mortgage application through a participating financial institution
File with
Montana Board of Housing, through a participating lender
Documents you will need
dd214
No renewal
Once granted it does not need renewing.
CorrectionThis is a loan, not a benefit payment, and lists that put it beside grants and exemptions mislead. Nothing is forgiven: the principal returns to the Montana housing trust, and the interest the board collects pays origination, servicing and administration before any surplus goes back to the trust.
CorrectionThe rate rule is a "whichever is less" test and is easy to read backwards. It is not simply one point off the market rate — it is the LOWER of one point below the Fannie Mae delivery rate and one point below the board’s own cheapest other programme.
Worth knowingGuard and Reserve membership qualifies on its own terms here, with no requirement of federal activation or wartime service. That makes this one of the few state housing programmes a currently serving Guard member can use.
Known gapThe current statewide allowable purchase price, the live interest rate, and whether the trust allocation is presently open were not verified — none are in the Code, and Montana Housing’s own programme page was not read this session.

Sources

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.