Short Answer: No, you absolutely do not!

While the 20% down payment is a common myth, it is not a requirement for most home loans. In reality, a wide range of loan programs are available that allow you to purchase a home with significantly less money down, making homeownership much more accessible.

The main reason the 20% figure is so well-known is that if you put down less than 20% on a Conventional Loan, you will typically be required to pay for Private Mortgage Insurance (PMI). PMI is an extra monthly fee that protects the lender in case you default on the loan. It is not a permanent fee and can be removed once your loan balance is paid down to 80% of the home's original value.

Here are some of the most common low-down-payment options available:

Conventional Loans: Many lenders offer conventional loans with as little as 3% to 5% down. These are great options for buyers with strong credit scores.

FHA Loans: Backed by the Federal Housing Administration, these loans are very popular with first-time homebuyers and allow for a down payment as low as 3.5%. They are designed for buyers who may have less-than-perfect credit.

VA Loans: If you are a veteran, active-duty service member, or an eligible surviving spouse, a VA loan is an incredible benefit. These loans require 0% down and do not have mortgage insurance.

USDA Loans: These loans are designed to encourage development in rural areas. If the property you are buying is in a designated rural area, you may be eligible for a USDA loan with 0% down.

Bozeman's has experienced a significant shift in the last few years. After a wild, COVID-fueled boom, our local real estate market has now shifted into a more balanced, and, in many ways, buyer-friendly market. 

Here's what we are seeing now: 

More Homes on the Market: The number of homes on the market in our area has risen to its highest level in years. With the increased inventory, not only do buyers have more to choose from, they are also less likely to face the competitive, multiple-offer bidding wars that were so common just a few years ago. 

A Slower, More Deliberate Pace: Homes are staying on the market longer, with the median days on market now ranging between 50 to 70 days. This gives you, as a buyer, the breathing room to conduct thorough due diligence, compare properties, and make a strategic decision without feeling rushed.

Prices are Stabilizing and Softening: After years of rapid appreciation, median home prices in our area have softened. Since 2022, we've seen the median price of a home in Bozeman stay steady, no wild increases here. 

Negotiation is Back: With more competition, we've seen many sellers adjusting their expectations. We've seen an increase in homes selling for under the asking price, and sellers are more open to negotiating on terms and offering concessions, such as contributions to closing costs or interest rate buydowns.

What this means for you as a buyer: 

This is the most favorable market for buyers that we've seen in years. While interest rates remain a consideration, the combination of more inventory, softer prices, and increased negotiating leverage has created a window of opportunity for buyers to find the right home without the intense pressure of the past.

The Gallatin Valley offers a wide variety of communities, each with its own distinct character. Finding the right fit depends on your priorities, whether that’s walkability, great schools, or space with a view.

For Those Who Want to Be in the Heart of It All: Bozeman

• Vibrant & Walkable (Higher Budget): If you want to be steps from restaurants, boutiques, and the farmers market, the downtown historic districts and Southside neighborhoods are ideal. These areas feature charming historic homes on tree-lined streets and easy access to downtown and the Main Street to the Mountains Trail system.

• Neighborhood Feel with Amenities (Mid-to-High Budget): On the west and northwest sides of town, master-planned communities like Valley West, Baxter Meadows, Legends at Bridger Creek, and Harvest Creek are built around connection, with parks, ponds, trails, and close proximity to excellent schools.

• Luxury & Views (High-End Budget): For buyers looking for space, privacy, and mountain views, neighborhoods like Triple Tree Ranch, Home 40, and the Black Bull golf community are standouts. These areas feature custom homes, large lots, and high-end amenities.

For Those Seeking More Space & Value: Surrounding Towns

• The Neighbor (Entry-to-Mid Budget): Belgrade has become a go-to choice for those wanting more home for their money without losing convenience. With a growing downtown, strong community feel, and prices well below Bozeman, it offers great value just a short drive away.

• Small Town Charm (Entry-to-Mid Budget): For a quieter pace and small-town feel, Manhattan and Three Forks are both great options. Both have strong schools and close-knit communities. In Three Forks, home prices are often well below Bozeman and Belgrade, while Manhattan homes tend to sit on larger parcels of land.

• For Outdoor Enthusiasts: If your priority is easy access to trails, fishing, and skiing, consider Gallatin Gateway, Bridger Canyon, or Trail Creek. Gallatin Gateway offers a quiet, rural feel at the mouth of the canyon on the way to Big Sky. Bridger Canyon provides quick access to Bridger Bowl and endless outdoor recreation. Trail Creek offers a peaceful, mountain setting with proximity to the Yellowstone River and nearby trailheads.<?xml version="1.0" encoding="UTF-8"?>

The best way to narrow it down is to talk with an agent who knows Bozeman inside and out. Our team can help you match your lifestyle, goals, and budget to the right neighborhood or surrounding area. Click here to get in touch with us. We’d love to help you find the place that feels like home.

That depends on how far you’re willing to go! For those wanting to stay in Bozeman, there are certain neighborhoods that can offer more bang for your buck.

Many people relocating to Bozeman are open to a slightly longer commute, which can really expand your options.

If you’re open to the surrounding communities:

Belgrade – Just a 15–20 minute drive from Bozeman, Belgrade offers lower home prices, convenient access to the airport, and beautiful mountain views. It’s a popular choice for those who want better value without being too far from town.

Livingston – About 30 minutes away, Livingston has an entirely different pace of life and typically lower home prices. The mountain pass between Bozeman and Livingston can get tricky in the winter, but the scenery (and community) are worth it for many.

Three Forks – Roughly 30 minutes west of Bozeman, Three Forks offers a true small-town feel and significantly lower cost of living. The drive is straightforward, though, like anywhere in Montana, winter roads can make travel challenging at times.

Manhattan – Just past Three Forks, Manhattan is a favorite for those seeking quiet living, open space, and a strong sense of community while staying within easy reach of Bozeman. 

To explore all of these areas, check out our Area Information page. 

If you’re considering investing in a short-term rental (STR) property in the Bozeman area, it’s important to know that there are two sets of rules to navigate — those within Bozeman city limits and those in unincorporated Gallatin County.

Short-Term Rentals Within Bozeman City Limits

In 2023, Bozeman put some of the most restrictive STR regulations in Montana into effect. On October 18, the City Commission voted to ban all new non-owner-occupied short-term rentals (called “Type-3” rentals) and grandfather in only those that already had valid permits. In other words, you can’t buy a home in Bozeman and turn it into a full-time Airbnb unless it qualifies as an owner-occupied rental or was one of the relatively few licensed before the change.

Right now, the only feasible short-term rental investments within city limits are those where you or someone else lives on-site.

• Single-family homes can only operate as STRs on a part-time basis — for example, renting out spare rooms or listing the property while you’re out of town.

• Multi-family or dual-unit properties (such as duplexes or homes with ADUs) create more opportunity. You could live in one unit or rent it long-term, while legally short-term renting the other.

If you plan to go this route, make sure the property’s zoning supports the type of rental you have in mind, and be prepared to go through the city’s permit process. It’s also worth double-checking HOA or neighborhood covenants, as many restrict short-term rentals entirely. And keep in mind that standard homeowner insurance policies often don’t cover STR use — so due diligence matters beyond just city laws.

Short-Term Rentals in Gallatin County (Outside City Limits)

Once you step outside Bozeman city limits, things become a bit more flexible — but also more nuanced. Gallatin County doesn’t have a single, countywide STR policy. Instead, regulations depend on the zoning district where the property is located.

• Unzoned Areas: Much of Gallatin County is made up of unzoned rural areas. If a property falls into one of these, there are no county zoning restrictions on operating a short-term rental.

• Zoned Areas: In zoned districts, the rules vary. Most older zoning designations didn’t originally account for short-term rentals, which under Montana law means they’re not permitted by default. Check what your specific zoning district calls STRs — the term might appear as “vacation rental,” “overnight accommodation,” or “recreational housing.” If it’s not listed as a permitted or conditional use, it’s technically not allowed until the county amends or interprets the zoning code to include it.

The Bottom Line

Even with the new restrictions, opportunities for short-term rental investments in the Bozeman area still exist. Within the city, short-term rental success looks more like renting out part of your primary home or pairing an ADU with your main residence. In the county, options open up, especially in unzoned or tourism-oriented areas, as long as zoning and licensing requirements are met.

Navigating these rules can be complex, but with the right guidance and a clear understanding of what’s allowed, buyers can still find ways to make short-term rental ownership work here in the Gallatin Valley.

If you’re exploring investment opportunities or want help understanding the latest regulations, we’re happy to walk you through it.

Beyond the standard considerations of any real estate purchase, there are some considerations to keep in mind as you consider purchasing a home in Montana. 

Environmental and Climate-Related Challenges

Intense Wear and Tear: Heavy snowfall, ice dams, and freeze-thaw cycles put immense stress on roofs, foundations, and siding.

High Heating Costs: In older or poorly insulated homes, heating bills can be substantial for a significant portion of the year.

Snow and Ice Management: For many properties, snow removal is a serious and ongoing chore. This can involve significant time and, for larger properties, the expense of plows or snow blowers.

Wildfire Risk and Mitigation

The risk of wildfire is a reality for many Montana homeowners.

Defensible Space: Homeowners are responsible for creating and maintaining "defensible space" by clearing flammable vegetation around their homes.

Increased Insurance Costs: Properties in high-risk areas face significantly higher homeowners' insurance premiums, and in some cases, difficulty securing coverage at all.

Air Quality: Even if a home isn't directly threatened, summer wildfire smoke can lead to prolonged periods of poor air quality.

Living with Wildlife 

While a major draw for many, coexisting with Montana's wildlife has its challenges.

Property Damage: Deer, elk, and other animals can cause significant damage to landscaping.

Safety Concerns: The presence of larger predators like bears and mountain lions requires homeowners to be vigilant about securing trash and being aware of their surroundings, especially with pets and children.

Property-Specific and Infrastructural Challenges

Well and Septic Systems

Many properties, particularly outside of city limits, rely on individual wells for water and septic systems for waste.

Maintenance Responsibility: Unlike city services, the homeowner is solely responsible for the maintenance, repair, and potential replacement of these systems, which can be a significant expense.

Due Diligence for Buyers: Buyers must conduct thorough inspections of these systems, including water quality and flow rate tests for wells and inspections of septic tanks and drain fields.

Water Rights

This is a complex and uniquely Western issue that can be a surprise to out-of-state buyers.

Water is a Property Right: In Montana, the right to use water is a distinct property right that may or may not transfer with the land. Buyers need to verify that the property has the legal rights for its intended water use, whether for domestic purposes, irrigation, or livestock.

Access and Remoteness

The dream of a remote Montana property comes with practical challenges.

Year-Round Access: Not all roads are county-maintained. Buyers need to verify who is responsible for road maintenance and snow removal, as a lack of year-round access can affect financing, insurance, and emergency services.

Distance to Amenities: The vastness of the state means that even a seemingly short distance on a map can translate to a long drive to grocery stores, schools, and medical facilities, especially in winter conditions.

Legal and Regulatory Challenges

Navigating Covenants and HOAs 

Homeowners' Associations and property covenants are common in many subdivisions.

Understanding Restrictions: These can dictate everything from the size and style of a home to whether you can have a fence, park a recreational vehicle, or have certain types of pets. Buyers must carefully review these documents before purchasing.

Light-Touch State Regulation: Montana has a relatively hands-off approach to HOA regulation, meaning disputes are often handled internally or through civil litigation.

Zoning and Land Use: In more rural areas, zoning can be less defined, which can be both a freedom and a risk. Understanding local zoning regulations is crucial, especially for buyers who plan to build, subdivide, or operate a home business.

Working with a qualified agent will ensure that all of these concerns are addressed before you purchase your property or home.