Feeling excited to buy your first home in Belgrade but not sure where to start with financing? You are not alone. Many first-time buyers feel overwhelmed by loan options, paperwork, and timelines. In this guide, you will get a clear breakdown of the main loan types, how down payment help works in Montana, and exactly what to collect for pre-approval so you can tour homes with confidence. Let’s dive in.
The main loan options in Belgrade
Conventional loans: flexible and popular
Conventional loans are offered by many lenders and can be a great fit if you have steady income and decent credit. First-time buyer options often start at 3 percent down, with other common down payments at 5, 10, or 20 percent. If you put less than 20 percent down, you will pay private mortgage insurance, which you can request to cancel once you reach enough equity.
Lenders often look for credit scores around 620 or higher for conventional loans. Debt-to-income limits vary by lender, but many programs target the high 40 percent range. In Gallatin County, local banks and credit unions may offer portfolio products or combine loans with assistance. It is worth calling around to see what is available.
FHA loans: easier credit, low down payment
FHA loans help when you want a lower down payment or have limited credit history. The minimum down payment is 3.5 percent with credit scores of 580 or higher. If your score is between 500 and 579, the minimum down payment is typically 10 percent. FHA loans include an upfront mortgage insurance premium and an annual premium that is paid monthly.
Property must meet FHA standards, which can affect some older or rural homes. Before you shop, confirm local limits on the official FHA site. You can verify current figures on the FHA mortgage limits page for Gallatin County.
VA loans: strong option for eligible veterans
If you are a veteran, active-duty service member, or qualifying surviving spouse, a VA loan may offer zero down payment and no monthly mortgage insurance. There is a one-time VA funding fee, which is sometimes waived for eligible disabled veterans and can often be financed into the loan. You will need a Certificate of Eligibility, which your lender can usually pull for you.
VA loans have property standards and appraisal rules. Many Montana lenders handle VA loans regularly, so ask about their experience with VA appraisals in Gallatin County. Learn more about benefits and eligibility on the VA home loan program page.
USDA loans: zero down in eligible areas
USDA’s Single-Family Housing Guaranteed Loan Program offers 100 percent financing for eligible buyers and properties in designated rural areas. Your household income must be under program limits, and the home must be in an eligible location. The program includes a guarantee fee at closing and a small annual fee that functions like mortgage insurance.
Not all of Belgrade is eligible, and nearby ineligible areas can be very close to eligible ones. A parcel on one side of a road might qualify while the other side does not. Check property and income eligibility on the USDA eligibility site early in your search.
Down payment help in Montana and Gallatin County
State programs through Montana Housing
Montana Housing is the go-to resource for state-backed first-time buyer programs, down payment assistance, and sometimes Mortgage Credit Certificates. These programs often set income and purchase price limits, require a homebuyer education course, and follow a specific first-time buyer definition. Review options and current rules at Montana Housing’s first-time buyer programs.
Local resources in Gallatin County and Belgrade
Some local support may be available through county or city channels depending on current funding. Program windows can open and close during the year. Check the Gallatin County official site for community development or housing updates, and the City of Belgrade website for local notices or referrals to partner programs.
Local nonprofits and community partners sometimes help with buyer education or referrals. If you plan to use assistance, take the education class early and ask lenders which programs they can package with your primary loan.
Gifts and lender credits
Most loan types allow eligible gift funds for down payment and closing costs with a signed gift letter and documentation of the transfer. Some lenders also offer credits that can cover a portion of your closing costs in exchange for a slightly higher rate. These are not the same as down payment assistance, but they can reduce cash needed to close.
What to know about assistance
Assistance can come as a grant or a second mortgage. A forgivable second may not need to be repaid if you live in the home for a set number of years. A deferred second often comes due when you sell or refinance. Programs may also require you to contribute a portion of your own funds. Make sure you understand repayment terms and how assistance affects underwriting before you lock a loan.
Get pre-approved before touring in Belgrade
Documents your lender will ask for
Gather your paperwork early so you can move fast when a good home hits the market. Start with:
- Government ID and Social Security number or ITIN
- Recent pay stubs for at least 30 days
- W-2s for the last 2 years and 1099s if applicable
- Federal tax returns for the last 2 years, including schedules if self-employed
- Bank statements for the last 2 to 3 months for all accounts
- Retirement and other asset statements
- Documentation for other income you plan to use, such as support or rental income
- Proof of gift funds and a signed gift letter if applicable
- VA buyers: Certificate of Eligibility or the documents your lender needs to retrieve it
- USDA buyers: household income documentation to check eligibility
Keep statements complete with all pages, even if some are blank. Your lender will need the full record for verification.
Smart steps before you start touring
- Get a written pre-approval, not just a quick prequalification. A full review of income, assets, and credit gives you a stronger offer.
- Decide on your comfortable monthly payment and total cash for down payment and closing costs. For an overview of closing costs, see the CFPB guide to mortgages and closing.
- Complete required homebuyer education if you plan to use assistance.
- Confirm property eligibility for USDA and any condo or project approvals needed for FHA or VA.
- If you plan to use FHA or USDA, talk with your agent about property condition standards and repair timelines.
Touring checklist for Belgrade homes
- Bring a current pre-approval letter and know how you will provide earnest money.
- Ask your lender how seller credits can be used for closing costs or a rate buydown with your loan type.
- Verify the loan’s rules for property type. Manufactured homes, condos, and small multi-unit properties follow different guidelines.
- For rural or edge-of-town properties, note wells, septic systems, outbuildings, and acreage. These can affect appraisal and underwriting.
How to match a loan to your Belgrade goals
Choosing the right loan starts with your budget, timeline, and the types of homes you plan to tour.
- You have strong credit and want the lowest long-term mortgage insurance cost. A conventional loan with at least 5 to 10 percent down can keep MI costs in check and lets you remove PMI later.
- You are building your credit or have limited savings. FHA can be more flexible on credit history with a 3.5 percent down minimum for many buyers, but plan for both upfront and monthly mortgage insurance.
- You are eligible for VA benefits. VA financing is a top choice for many service members and veterans because it often requires zero down and no monthly mortgage insurance.
- You plan to buy in an eligible rural area and meet income limits. USDA can offer zero down payment. Confirm eligibility early to avoid surprises.
If you are considering a condo, check whether the project is approved for your loan type. VA and FHA maintain approval standards for some projects, which can influence your options.
Appraisals, repairs, and local timing
Appraisals in Gallatin County can take longer during busy seasons, especially for rural properties. Build a buffer into your timeline if you are shopping outside the core of town or on acreage. FHA and VA appraisals review minimum property standards. If repairs are required, plan for added time and possible re-inspections.
Condo projects and rural parcels can also involve extra documentation. Ask early about wells, septic permits, or HOA documents so your lender and appraiser have what they need.
Your next steps
- Compare the four main loans and decide which two fit you best.
- Check current limits and eligibility using official sources like Montana Housing, the FHA mortgage limits page, the USDA eligibility site, and the VA home loan program page.
- If you plan to use assistance, look at local updates on the Gallatin County site and the City of Belgrade website, and schedule a class with a HUD-approved housing counselor.
- Gather your documents and secure a written pre-approval before touring.
When you are ready to start seeing homes in and around Belgrade, get a local guide by your side. Reach out to Montana Life Real Estate - John Stiles for neighborhood insight, property guidance that fits your loan type, and a smooth path from pre-approval to closing.
FAQs
What credit score do I need for a first home in Belgrade?
- Many conventional loans look for scores around 620, while FHA can consider lower scores with larger down payments; ask a lender to review your full profile.
How much cash should I plan for closing costs?
- Closing costs often range around a few percent of the purchase price and can sometimes be offset with seller credits or lender credits depending on your loan.
Is all of Belgrade eligible for USDA zero-down loans?
- No, eligibility depends on exact location and income limits; use the USDA map to check each address and review household income.
Can I buy a condo with FHA or VA financing?
- Possibly, but some condo projects require approval for FHA or VA; verify project status early so you do not lose time during escrow.
Can I use gift funds for my down payment in Montana?
- Yes, most loan types allow gift funds with a proper gift letter and documentation; your lender will explain acceptable sources.
What documents do I need for pre-approval in Gallatin County?
- Bring ID, recent pay stubs, 2 years of W-2s or 1099s, tax returns if needed, full bank statements, asset statements, and any documentation for additional income or gift funds.
