FHA Loan Requirements, Limits and Approval Tips
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2022 FHA Loan Limits in Montana

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If you dream of buying a home in “Big Sky Country” — a common nickname for the state of Montana — you’ll have more borrowing power than ever in 2022. The Federal Housing Administration (FHA) backs loan amounts as high as $420,680 for single-family homes in most Montana counties. Plus, there’s also good news if you’re buying in more expensive Montana counties like Gallatin (home to the city of Bozeman), where the limit is $603,750 for a one-unit home.

Montana FHA loan limits by county

County nameOne unitTwo unitsThree unitsFour unitsMedian sales price
BEAVERHEAD$420,680$538,650$651,050$809,150$266,000
BIG HORN$420,680$538,650$651,050$809,150$168,000
BLAINE$420,680$538,650$651,050$809,150$126,000
BROADWATER$420,680$538,650$651,050$809,150$325,000
CARBON$420,680$538,650$651,050$809,150$316,000
CARTER$420,680$538,650$651,050$809,150$148,000
CASCADE$420,680$538,650$651,050$809,150$231,000
CHOUTEAU$420,680$538,650$651,050$809,150$217,000
CUSTER$420,680$538,650$651,050$809,150$227,000
DANIELS$420,680$538,650$651,050$809,150$169,000
DAWSON$420,680$538,650$651,050$809,150$156,000
DEER LODGE$420,680$538,650$651,050$809,150$159,000
FALLON$420,680$538,650$651,050$809,150$226,000
FERGUS$420,680$538,650$651,050$809,150$187,000
FLATHEAD$441,600$565,300$683,350$849,250$384,000
GALLATIN$603,750$772,900$934,250$1,161,050$525,000
GARFIELD$420,680$538,650$651,050$809,150$182,000
GLACIER$420,680$538,650$651,050$809,150$148,000
GOLDEN VALLEY$420,680$538,650$651,050$809,150$142,000
GRANITE$420,680$538,650$651,050$809,150$245,000
HILL$420,680$538,650$651,050$809,150$236,000
JEFFERSON$420,680$538,650$651,050$809,150$338,000
JUDITH BASIN$420,680$538,650$651,050$809,150$130,000
LAKE$420,680$538,650$651,050$809,150$300,000
LEWIS AND CLARK$420,680$538,650$651,050$809,150$338,000
LIBERTY$420,680$538,650$651,050$809,150$194,000
LINCOLN$420,680$538,650$651,050$809,150$250,000
MADISON$420,680$538,650$651,050$809,150$327,000
MCCONE$420,680$538,650$651,050$809,150$96,000
MEAGHER$420,680$538,650$651,050$809,150$173,000
MINERAL$420,680$538,650$651,050$809,150$236,000
MISSOULA$471,500$603,600$729,600$906,750$410,000
MUSSELSHELL$420,680$538,650$651,050$809,150$230,000
PARK$460,000$588,850$711,800$884,600$400,000
PETROLEUM$420,680$538,650$651,050$809,150$34,000
PHILLIPS$420,680$538,650$651,050$809,150$172,000
PONDERA$420,680$538,650$651,050$809,150$145,000
POWDER RIVER$420,680$538,650$651,050$809,150$150,000
POWELL$420,680$538,650$651,050$809,150$137,000
PRAIRIE$420,680$538,650$651,050$809,150$166,000
RAVALLI$422,050$540,300$653,100$811,650$367,000
RICHLAND$420,680$538,650$651,050$809,150$306,000
ROOSEVELT$420,680$538,650$651,050$809,150$150,000
ROSEBUD$420,680$538,650$651,050$809,150$130,000
SANDERS$420,680$538,650$651,050$809,150$192,000
SHERIDAN$420,680$538,650$651,050$809,150$170,000
SILVER BOW$420,680$538,650$651,050$809,150$209,000
STILLWATER$420,680$538,650$651,050$809,150$316,000
SWEET GRASS$420,680$538,650$651,050$809,150$305,000
TETON$420,680$538,650$651,050$809,150$230,000
TOOLE$420,680$538,650$651,050$809,150$144,000
TREASURE$420,680$538,650$651,050$809,150$158,000
VALLEY$420,680$538,650$651,050$809,150$199,000
WHEATLAND$420,680$538,650$651,050$809,150$127,000
WIBAUX$420,680$538,650$651,050$809,150$167,000
YELLOWSTONE$420,680$538,650$651,050$809,150$316,000

How are FHA loan limits determined?

FHA loan limits change every year, and they’re based on a percentage of the conforming loan limits the Federal Housing Finance Agency (FHFA) publishes for conventional loans. Different limits are set for low-cost and high-cost areas of the county and typically follow the upward or downward path of average U.S. home prices over the previous four quarters.

Here’s how the calculations work:

The low-cost limit or “floor” is $420,680 for a single-family home, which is equal to 65% of the 2022 national conforming loan limit of $647,200. If you’re buying a multifamily home in Montana, the low-cost limits increase with each unit:

  • $538,650 for a two-unit home
  • $651,050 for a three-unit home
  • $809,150 for a four-unit home

The high-cost limit is set at 150% of the conforming loan limit, which means you could borrow up to $970,800 for a single-family home in one of the most expensive parts of the country. However, the high-cost one-unit home limits for the priciest counties in Montana are much lower than the countrywide maximums:

  • $603,750 in Gallatin
  • $471,500 in Missoula
  • $460,000 in Park
  • $441,600 in Flathead

How to qualify for an FHA loan in Montana

FHA loans are a good alternative if you’re not able to get a conventional mortgage because of lower credit scores or too much debt compared to your income.

Here’s a breakdown of the most current requirements to qualify for an FHA loan in Montana:

  • Down payment and credit score. With a 580 credit score, the minimum down payment for FHA loans is 3.5%. If you can come up with a 10% down payment, some FHA lenders will approve your loan application with a score as low as 500.
  • Debt-to-income ratio. To make sure you can afford your monthly payment, FHA lenders calculate your debt-to-income (DTI) ratio by dividing your total debt by your before-tax income. The FHA prefers a DTI ratio of 43%, but exceptions are possible.
  • Mortgage insurance. Mortgage insurance protects lenders if you default, and it’s especially expensive on FHA loans. You’ll pay two types of FHA mortgage insurance. The first is an upfront mortgage insurance premium (UFMIP) worth 1.75% of your loan amount, which is usually added to your mortgage. The other is an annual mortgage insurance premium (MIP), which costs 0.45% to 1.05% of the loan amount and is divided by 12 and added to your monthly payment. You’ll pay it regardless of your down payment amount.
  • Occupancy. The FHA requires you to live in any home you buy with an FHA loan for at least a year. You’ll need to choose conventional financing for second homes or investment properties.
  • FHA home appraisals. An FHA appraisal is required on any purchase loan. FHA appraisal guidelines are usually more stringent than conventional loans.

Buying a multifamily home with an FHA loan

An advantage of FHA loans is the ability to buy a multifamily home with just a 3.5% down payment (as well as a 580 credit score) and qualify with rents on the other units; conventional guidelines will typically require a 15% down payment. An added bonus: FHA loan limits are higher for two- to four-unit homes. The only catch is that you’ll have to live in one of the units for at least a year.

FHA lenders in Montana

Lender nameLT ratingMinimum FHA credit score
Wells Fargo8/10Undisclosed
Better Mortgage9.5/10620
Rocket Mortgage9.5/10580
Fairway Independent Mortgage8/10600
AmeriSave Mortgage8/10600

 

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