different property types
Larson grew up in Big Sandy, a small town north of Great Falls. He joined the mortgage industry in 1990 and transitioned to reverse mortgage conduits in 2002. Everyone has their own issues when it comes to getting a mortgage, and Montana is no exception.
“Montana, unlike more densely populated areas like Phoenix and Los Angeles, has never had productive housing,” Larson explained. “These places had been subdivided back in the 1930s and 1940s, and the manufacturing plant had 500 lots of 7,500 square feet each and two models. Montana never had enough population, market Or labor. Here, everything is a custom or manufactured home, or an individually built cabin.
This creates some challenges in the reverse mortgage world because many of the properties a borrower may be seeking a loan on are very different.
“You could have a single-family home on 25 acres, which is highly unusual in other markets,” he said. “Comparing or appraising these properties can be a challenge. Here, appraisers are good at extracting similar values, but that can be difficult. There are log homes, manufactured homes, and custom log homes, all with varying values.
Ongoing challenges
DeWolfe, a fifth-generation Montanan, said he found getting a reverse mortgage in the state more challenging than in other parts of the country.
“In California, you’re basically dealing with large tracts of housing, so it’s easy to find comparable homes and you don’t have a lot of unique situations,” he said. “Montana is the complete opposite. Historically, most homes in Montana were custom built.
DeWolfe explained that population centers like Bozeman and Billings may have more residential areas, but this is a relatively new development. One emerging challenge relates to manufactured housing.
“Many people buy mobile homes, put a foundation on them and never take ownership of them,” he said. “Once they are permanently secured, the state of Montana automatically declares them real property, but the government requires documentation to remove ownership. This can become complicated when ownership changes, especially after the previous owner dies. situation.
Home value and vast area
Home values can also vary widely. Montana is a popular vacation destination, so various amounts of money can be found.
“The median home price in the area where I live is $2.4 million, and it’s a resort area with a lot of expensive properties,” Larson said. “It’s very broad, in a small town of 700 people you might get a reverse mortgage call and they have to go 100 miles around to get their compensation. The main challenge is the diversity of property types and values.
Square footage is also a common issue for DeWolf, especially where state regulations may conflict with state regulations. federal housing administration (Federal Housing Administration) Rules.
“FHA has a 50-acre land limit, but Montana’s ‘mini-ranch’ rules apply to larger properties and require mortgages rather than deeds of trust, and FHA doesn’t recognize that,” he said. “You’ll also see a lot of spec homes on dirt roads with private road easements and no recorded road agreements, which can create problems.”
Like Larson, DeWolfe faced challenges finding comparables in rural parts of the state. Other properties may have wells with high mineral content, which would require water testing.
“Montana’s popularity has increased, in part because of shows like Yellowstone, which has led to more custom and off-grid homes,” he explains. “These properties present unique challenges, but my long experience in the industry helps address them.”
product type
Larson said that while homes can be worth millions of dollars, he found the core Home Equity Conversion Mortgage (HECM) product to be adequate, especially under the 2024 HECM limits.
“Montana has a population of about one million people and rural community values have not grown significantly,” he said. “However, popular areas such as Bozeman, Missoula and Whitefish with their recreational areas, ski resorts, lakes and rivers attract many people.”
While Larson is exploring sales leads for proprietary products, most of his business is focused on HECM products, he said. But both Larson and DeWolf see huge potential in HECM Procurement (H4P), they explain.
“I definitely agree that this is a product that should have more advantages,” DeWolfe said. “I just haven’t figured out how to create momentum. I know how to get people excited, but I don’t know how to get people thinking about it.
“As older agents retire, the real estate world is now seeing more and more younger agents. Young agents are great—they’re motivated and hardworking—but I’m not sure they can compete with older agents. Build relationships with long-term customers.
