Reverse Mortgages and Home Loans in Montana

Montana homeowners tend to be practical. They want to know what a reverse mortgage costs, what it does, and what could go wrong, and they'd rather hear it straight. Good. That's how I like to talk about it.

A lot of homes here sit on acreage, run on a well and septic, or started life as a manufactured home and grew from there. Those details matter more for a reverse mortgage than the view out the window, so we'll cover them below.

The short version

• We help Montana homeowners and buyers with reverse mortgages, purchases, refinances, and VA loans.
• Reverse mortgage options include the HECM, the HECM for Purchase, and proprietary (jumbo) programs where available.
• Rural homes can qualify, but wells, septic systems, acreage, and manufactured homes each have their own rules.
• Montana's property tax help includes a reduced tax rate for homeowners with limited incomes and a separate income tax credit for homeowners and renters 62 and older.
• A reverse mortgage only works on your primary residence. Snowbirds, read the residency section.

Reverse mortgages in Montana

There are no required monthly mortgage payments with a reverse mortgage. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.

Montanans use reverse mortgages to:

• Pay off an existing mortgage and free up monthly cash.
• Set up a line of credit for emergencies, care at home, or a hard winter on the budget.
• Add monthly income.
• Buy a home that fits the next stage of life with a HECM for Purchase, like moving into town and closer to doctors and family. We can generally close in 30 days or less, but we always follow the contract.

HECM

The FHA-insured HECM is the reverse mortgage most Montana homeowners get. You must be 62 or older, live in the home as your primary residence, and have enough equity. It comes in fixed-rate and adjustable versions. How much you can access depends on the youngest borrower's age (or an eligible non-borrowing spouse's), current rates, and your home's value up to the national HECM limit. See How a Reverse Mortgage Works and Lending Limits.

On an adjustable HECM, the unused line of credit grows over time and can't be frozen by the lender as long as you meet the loan terms. See the standby line of credit strategy.

We don't charge a monthly servicing fee on our HECMs. Some proprietary programs do, and I'll point it out if one applies.

Jumbo (proprietary) reverse mortgages

In resort and mountain areas where values run high, a jumbo program may open up more money than a HECM. As a broker, we compare programs from several lenders, including Mutual of Omaha Secure Equity, Finance of America HomeSafe, Longbridge Platinum, Smartfi Choice, Nationwide Equities EquityPower, and MCM Holdings MCM Edge. Finance of America's HomeSafe Standard is approved in Montana. Availability for the others varies and changes over time. See Proprietary (Jumbo) Reverse Mortgages.

Rural homes, wells, and manufactured homes

Wells and septic

Plenty of Montana homes run on a private well and septic system. That's fine for a HECM, but FHA has standards for private wells and septic systems. The appraiser will note what's there, and a water test may be required. If you know of any issues, tell us early.

Homes on acreage

A home on acreage can qualify, as long as it appraises as a residence, not a farm, ranch, or business. Outbuildings are fine. Income from the land, like grazing leases, can raise questions, so mention it up front. See I own two parcels of land. Will I run into issues?

Manufactured homes

A manufactured home can qualify for a HECM if it was built after June 15, 1976, sits on a permanent foundation, and is classified as real property. See Can I do a reverse mortgage on a manufactured home that has a stick built addition?

Snowbirds and primary residence

A reverse mortgage is only for your primary residence, which for a HECM generally means the home you live in for the majority of the year. If you winter in Arizona and summer in Montana, the reverse mortgage goes on whichever home you live in most. You'll confirm it every year with an occupancy certification. See Why did I get an occupancy certification?

Montana's own homestead tax classification asks you to live in the home at least seven months a year, so check both rules if you split your time.

Montana property tax help for seniors

With a reverse mortgage, you keep paying property taxes. Montana has programs that can make that easier:

• Property Tax Assistance Program (PTAP). A reduced tax rate on part of your home's market value for homeowners on fixed or limited incomes.
• Elderly Homeowner/Renter Credit. A refundable income tax credit for homeowners and renters 62 and older with household income under a set limit. It may be available even if you don't otherwise file a Montana income tax return.
• Montana Disabled Veterans program. Property tax relief for qualifying veterans with a 100 percent service-connected disability, or their unmarried surviving spouses. Income and residency rules apply.

How they work with a reverse mortgage: these programs look at income and occupancy, not mortgages. Reverse mortgage money is a loan, not income, but ask the Department of Revenue how they treat it on your application. See the Montana Department of Revenue's property tax help page.

Insurance in Montana

With a HECM, you must keep homeowners insurance on the home.

• Wildfire. In forested areas, wildfire risk can make coverage harder to find or more expensive. Get quotes early.
• Flood. If the home is in a FEMA Special Flood Hazard Area, flood insurance is required. Spring runoff can reach homes outside mapped zones too, so ask your agent.

The HECM financial assessment looks at whether you can keep up with taxes and insurance. If it looks tight, part of the loan can be set aside to pay them for you.

Home loans in Montana

Reverse mortgages aren't all we do. We also help Montanans with:

• Buying a home, with conventional, FHA, VA, USDA, and jumbo loans. See Buy a Home, USDA Loans, and Jumbo Loans.
• Refinancing to change your rate or term, or take cash out. See Refinance.
• VA loans for eligible veterans, service members, and surviving spouses. See VA Loans.

We don't currently offer home equity loans or HELOCs in Montana. If you want to tap your equity, a cash-out refinance or, at 62 or older, a reverse mortgage may work instead.

For a personalized quote, see Get a Rate Quote.

Where people get tripped up

• Waiting to mention the well, the septic, or the extra parcel. These are easy to handle when we know early.
• Putting the reverse mortgage on the wrong home if you split the year.
• Waiting on insurance in wildfire country.

A checklist for Montana homeowners

1. Your property tax statement, and whether you get PTAP or the elderly credit.
2. Your homeowners insurance declarations page, with coverage and the renewal date.
3. What the home runs on: well, septic, propane, wood heat.
4. Your land: how many acres, how many parcels, and any income from the land.
5. Your mortgage statement, if you still have a mortgage.
6. Who lives in the home, and both spouses' ages. If your spouse is under 62, read the Non-Borrowing Spouse guide.
7. Where you live, month by month, if you split the year.

Please don't send documents through the website. Your loan officer will tell you what's needed and the safe way to share it.

Common questions

Can I get a reverse mortgage on a home with a well and septic?

Generally yes, as long as the systems meet FHA's standards. A water test may be required.

Can I get a reverse mortgage on a manufactured home in Montana?

A HECM can work if the home was built after June 15, 1976, sits on a permanent foundation, and is classified as real property.

Are jumbo reverse mortgages available in Montana?

Yes. Finance of America's HomeSafe Standard is approved in Montana, and we compare several other programs too.

Will a reverse mortgage affect my Montana property tax help?

The programs are based on income and occupancy. Reverse mortgage money is a loan, not income, but check with the Department of Revenue for your situation.

Can I use a reverse mortgage to buy a home in Montana?

Yes, with a HECM for Purchase. You make a down payment, and there are no required monthly mortgage payments afterward. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. See HECM for Purchase.

Next step

Get your estimate, start your reverse mortgage review, or find a loan officer for Montana. You can also call us at 530-888-6000. For the full picture, start with Reverse Mortgages.

Sources

• Montana Department of Revenue, Property Tax Help: revenue.mt.gov
• HUD, FHA Reverse Mortgage for Seniors (HECM): hud.gov