These FAQs are intended to assist community members hoping to purchase homes created under the City’s Affordable Housing Ordinance.
Buyers of Affordable Homes through the City of Bozeman’s Affordable Housing Program are required to meet certain requirements for the purchase of a home. Being eligible for the waitlist does not automatically make an individual eligible for all or any homes sold through the affordable housing program. The target demographic for this program is households unable to affordably purchase market rate homes.
1. Income verification – Must meet income requirements for the purchase price.
a. Verification must occur within one year prior to the closing of the purchase.
2. Asset verification – Liquid assets cannot exceed $25,000 as defined in the AHO..
3. The buyer must meet one of the following definitions of “First-Time Home Buyer”
a. An individual who has had no ownership interest in a principal residence during the 3-year period ending with the date of purchase; or
b. A single parent whose only prior home was owned with a former spouse while married; or
c. An individual who is a displaced homemaker and has only owned with a spouse; or
d. An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations; or
e. An individual who has only owned a property that was not in compliance with state, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure
4. Buyer Contribution – Must have at least $1,000 to contribute to the purchase.
5. The buyer must utilize conventional or government-insurance fixed-rate first-mortgage financing with a term of 15 to 30 years.
6. The household must occupy the home as its primary residence. Buyers may not use the home for short or long term rental purposes.
80% Area Median income limits apply for Lower-Priced homes
Gallatin County 2019 Income Limits, Effective April 24, 2019
1 Person Household - $50,568
2 Person Household - $57,792
3 Person Household - $65,016
4 Person Household - $72,240
As part of your HUD homebuyer’s education and counseling, you will learn more about financing options for your home, including an exploration of your monthly budget, credit, and how that impacts your ability to finance a home. All homes purchased through the program must utilize a conventional or government-insured fixed-rate first-mortgage with a term of 15 to 30 years.
Many households will be eligible for both the federal HOME down payment assistance programs through HRDC as well as the City of Bozeman down payment assistance. Both programs serve households earning less than 80% of the Area Median income, but qualification may vary due to calculation methods. DPA lowers the amount of the loan resulting in a lower monthly payment. DPA is provided in the form of a “silent second” mortgage, meaning that no payments are made on the second mortgage until resale or the home is no longer your primary residence. Please contact HRDC for more information.
Eligibility is assessed at the time of purchase, there are no restrictions to future income.
There is no requirement to work with a realtor to purchase a home through the AHO. If you are already working with a realtor and wish to involve them in the process or wish to be represented by a realtor, you are allowed to do so. The city of Bozeman and HRDC will not pay realtor fees.
This home comes with a primary residence requirement. You must live in this home year around and file your tax returns with this address. As a primary residence this home cannot be fully rented to other residents. Primary residence status will be verified on an annual basis by HRDC.
The resale of homes purchased through the AHO includes repayment of the non-cash subsidy. The non-cash subsidy amount is determined at the date of the original purchase. It is 98% of the difference between the appraised value and the purchase price.
For Example: if a home appraises for $275,000 and it is purchased for $225,000 the difference is $50,000. The non-cash subsidy is $50,000 x 98% or $49,000. The amount repaid to the City’s Workforce Housing fund upon sale of the home would be $49,000, assuming appreciation. If the home sells for a lower rate and the full non-cash subsidy is not available to be paid back to the Workforce Housing fund the City of Bozeman may accept the lesser amount.
Sellers must repay all liens on the home including any Down Payment Assistance and cash subsidy liens. Regular costs to sell the home such as realtor, loan and title company fees will still apply.
There are no required timelines or penalties for resale but the City of Bozeman expects you to make this home your primary residence for two or more years. The seller must repay all liens and subsidies but is free to sell at any time. As with any home purchase, this is a long term decision for the homebuyer.
HRDC manages the wait list and qualifies buyers. The AHO is a program of the City of Bozeman. Once a qualified buyer is identified, the buyer and seller complete the purchase in accordance with the terms of the AHO. HRDC does not own properties sold through the AHO unless otherwise noted.
Affordable Housing Program
The definition of Affordable is not spending more than 1/3 of your monthly income on housing. For many, this is not possible. As Bozeman continues to grow, the City is working to develop a long-term plan to meet the housing needs of all of its residents. This plan will spur the creation and development of an Affordable Housing Work Plan. The newly created Affordable Housing Program is a division of the Community Development Department.
City of Bozeman Strategic Plan
The City Commission has identified Affordable Housing as one of it's strategic goals.
4.5 Housing and Transportation Choices - Vigorously encourage, through a wide variety of actions, the development of sustainable and lasting housing options for under-served individuals and families and improve mobility options that accommodate all travel modes.
a) Enhance Non-motorized Transportation.
b) Develop a Comprehensive Affordable Housing Action Plan that includes, but is not limited to:
1. Mandates the creation of affordable housing across all dwelling unit types.
2. Provides prescribed flexibility in the manner in which the mandate can be accomplished.
3. Provides a substantial, broad-based and reliable source of funding for the construction of affordable housing and for affordable housing loans.
4. Actively encourages Bozeman’s major employers to develop workforce housing programs for their employees.
Want to get involved? The Community Affordable Housing Advisory Board (CAHAB) meets the 2nd Wednesday of every month and works to help advance the City of Bozeman's Affordable Housing Plan. For more information on other advisory boards, head over to the Citizens Advisory Board's page.
Have questions or creative ideas around Affordable Housing? Contact Loren Olsen, Affordable Housing Program Manager, email@example.com or (406) 582-2953