How Do You Compare Hard Money Lenders in Bozeman?

The quick read: Compare Bozeman hard money lenders on the written term sheet, not the headline rate: points, note rate, leverage basis, draws, term and extension cost. Then test every offer against the exits Bozeman allows. A nightly-rental exit is effectively closed to investors: the City of Bozeman says new Type 3 short-term rentals, the rental of an entire home that is not owner-occupied, have been prohibited since December 14, 2023, and the Montana Department of Revenue taxes short-term rentals at a flat 1.90% rate in 2026. That leaves a sale or a long-term lease, in a city where HUD's market analysis, citing CoStar Group, reported apartment vacancy at 22.7% in the second quarter of 2025.

How do you compare hard money lenders in Bozeman?

You compare Bozeman hard money lenders by putting the same deal package in front of several lender types and comparing five written terms: points, rate, leverage basis, draw mechanics, and term with extension cost. Then you check each offer against the exits Bozeman leaves an investor, which are a sale or a long-term rental.

Price the deal with four lender types, because they fund and quote differently: a local private lender, a national fix-and-flip lender, a private debt fund, and a bank or credit union rehab line. Few publish full terms, so the comparison is a set of questions each answers in writing, on the same contract, budget and exit plan. A lower rate on a shorter term or a smaller funded amount is a different offer, not a better one.

The examples here are three common Bozeman deal shapes: a Northeast Neighborhood conversion, a Midtown redevelopment site and a University District house near Montana State University. Points are worth negotiating on all three; read how to negotiate points on a hard money loan before you counter.

What should a Bozeman hard money term sheet show in writing?

A Bozeman hard money term sheet should state in writing the points, the note rate, whether leverage is measured on purchase price, total cost or after-repair value, how and when rehab draws are released, and the term with the price of every extension. Without all five, two quotes cannot be compared on the same basis.

Published national ranges are a starting point, not a Bozeman benchmark:

Typical hard money loan-to-value (NerdWallet, updated March 10, 2026): 50% to 75%, versus 80% to 90% from traditional lenders
Down payment (NerdWallet, updated March 10, 2026): 10% to 30% or more
Maximum fix-and-flip loan-to-value (NerdWallet, updated February 11, 2026): usually up to 90%
Maximum loan-to-cost (NerdWallet, updated February 11, 2026): some lenders offer 90% or higher
Fix-and-flip repayment term (NerdWallet, updated February 11, 2026): typically six to 24 months

The leverage basis is where two Bozeman quotes diverge most. NerdWallet defines loan-to-cost as the loan compared with total project cost, including purchase and renovation, and after-repair value as an appraiser's estimate of value once renovations are finished. The two can fund very different dollars on the same house, so ask each lender for three numbers: the amount funded at closing, the holdback for rehab draws, and the cash you must bring.

Then ask who inspects each draw, how many days a draw takes to fund, whether interest accrues on undrawn holdback, and what an extension costs and requires. Finally, ask which exit the lender is underwriting, because in Bozeman one is off the table for investors.

Can you exit a Bozeman rehab as a short-term rental?

No, not as an investor who will not live in the house: the City of Bozeman says new Type 3 short-term rentals, the rental of an entire home that is not owner-occupied, have been prohibited since December 14, 2023. The types still permitted all tie the rental to the host's own primary residence.

The city's short-term rental page defines what remains. Type 1 rents bedrooms in the host's primary residence while the host is there; Type 2A rents that residence while the host is away; Type 2B rents an accessory dwelling unit on the same lot, or one additional unit in the same building. The rules as the city lists them:

New Type 3 rentals (entire home, not owner-occupied): prohibited since December 14, 2023
Primary-residence certification for Types 1, 2A and 2B: the host resides there 70% or more of each calendar year, signed every year
Short-term rental types allowed in the new RA district: Type 1 only
Fire inspection: every three years

The only non-owner-occupied rentals left are Legacy Type 3 rentals with an active permit, or a complete application, before December 14, 2023, and the city says one that expires, is revoked or is forfeited by transfer of ownership is no longer eligible. That transfer clause is the one a buyer has to price: a seller's Legacy permit does not survive your purchase, so the seller's nightly-rental income cannot support your price, your after-repair value or your refinance. Ask every lender to confirm in writing that its valuation assumes long-term rent or a sale.

The zoning rewrite narrows the field further. The city updated its entire Unified Development Code effective February 1, 2026: the RS, R1 and R2 districts became the new RA district, only Type 1 rentals are allowed in RA, and Type 2 rentals operating in RA may no longer be permitted. Re-check any zoning or rental assumption made before February 2026, including one in a seller's package.

Taxes stack on top. The Montana Department of Revenue charges a combined 8% lodging facility sales and use tax on vacation rentals, a 4% use tax plus a 4% sales tax, with units rented 30 continuous days or more to the same purchaser exempt.

How does Montana's 2026 property tax change a Bozeman rehab's carry and exit?

Montana's 2026 property tax structure taxes short-term rentals, second homes and vacant residential lots at a flat 1.90% rate, while primary residences and long-term rentals get a tiered rate that starts at 0.76%. A Bozeman rehab that is neither occupied by you nor leased long term sits in the higher group.

The Department of Revenue's 2026 schedule, where a long-term rental means rented for 28 days or more for at least 7 months a year:

First $378,000 of market value (primary residence or long-term rental): 0.76%
$378,001 to $756,000: 0.90%
$756,001 to $1,511,999: 1.10%
Over $1,512,000: 1.90%
Second homes, short-term rentals and vacant residential lots: flat 1.90%
Multifamily dwellings used as long-term rentals: flat 1.10%

The Legislative Fiscal Division's June 2025 brochure explains why the rate matters: taxable value is assessed value multiplied by the tax rate, and mills are levied at $1 per $1,000 of taxable value, so with the same mills the bill moves with the rate.

Illustrative only, at an assessed value equal to the $885,900 average Bozeman-area sales price HUD reported: the tiered schedule yields about $7,704 of taxable value and the flat 1.90% rate about $16,832, roughly 2.2 times as much.

Two lender questions follow. First, which tax figure each lender uses to size the carry while the house sits empty. Second, which classification the refinance lender will underwrite after you lease it. The Department listed an application window of December 1, 2025 to March 1, 2026 for the reduced 2026 rate, so ask it how a newly leased property is reviewed.

What does Montana law say about the interest rate on a private hard money loan?

Montana's interest-rate statute, MCA 31-1-107, lets parties agree in writing to any rate that does not exceed the greater of 15% or 6 percentage points above the Federal Reserve's H.15 bank prime rate, but it does not apply to regulated lenders such as banks and credit unions. Ask each lender which side it sits on.

The statute pegs the prime rate to the H.15 release dated three business days before the agreement is signed. The Federal Reserve's H.15 release dated October 19, 2026 showed bank prime at 7.00% for October 12 through 16, 2026, so prime plus 6 points is 13.00% and the 15% figure is the higher of the two on that reading. A loan that is not usurious when made stays lawful for its duration if the agreement is not substantially changed, but that protection does not apply to renewals, so ask how each lender documents an extension.

MCA 31-1-111 defines a regulated lender to include a bank, savings and loan association, trust company, credit union or residential mortgage lender licensee under state or federal supervision, and its subsidiaries; MCA 31-1-112 exempts regulated lenders, other than deferred deposit and consumer loan licensees, from interest-rate limits. A private fund or individual investor is not on that list. Ask each private lender how its rate, points and fees fit the statute, and have your attorney read the note.

What do Bozeman rents and sales say about your exit?

HUD's Comprehensive Housing Market Analysis for Bozeman, as of June 1, 2025, describes a soft rental market and a balanced sales market: apartment vacancy in the city of Bozeman was 22.7% in the second quarter of 2025, and homes for sale represented 6.5 months of supply in May 2025. Size your exit to those conditions.

The figures HUD reported for a rehab exit (apartment data from CoStar Group, single-family rental data from Cotality):

City of Bozeman apartment vacancy (second quarter 2025): 22.7%, up from 17.2% a year earlier
City of Bozeman average apartment rent (second quarter 2025): $2,203, down 6% year over year
Apartments within 2 miles of Montana State University (second quarter 2025): 25.3% vacancy, up from 11.0%, with average rent down 7% to $2,219
Professionally managed single-family rental vacancy (May 2025): 1.6%
Three-bedroom single-family home rent (May 2025): $3,179, up 4% year over year
Average home sales price (12 months ending May 2025): $885,900, up 1%
Months of supply for sale (May 2025): 6.5, the highest level since 2014

The pressure on apartment rents is new supply. HUD says nearly 1,150 apartment units were completed in the 12 months ending June 2025, and that three-year rental demand will be met entirely by vacant units and the estimated 900 under construction. The Census Bureau's 2025 permit file for the Bozeman metro estimates 567 units in 26 buildings of five or more units, about 21.8 per building, at an estimated permit valuation of roughly $111,400 per unit.

So the refinance rent in your exit plan should rest on signed leases or rents near the averages HUD reported, and a sale exit should allow for 6.5 months of supply. Steadier single-family figures can make a University District house leased long term an easier exit to underwrite than a small apartment conversion near campus.

How do the three Bozeman deal types change what you test?

The same five terms apply to every Bozeman deal, but the weight shifts by property: a Northeast Neighborhood conversion turns on draws and zoning under the new code, a Midtown redevelopment site turns on term and extension cost, and a University District house turns on the long-term lease exit.

Table 1. What to test in a Bozeman hard money quote, by deal type

On a Northeast Neighborhood conversion, the draw schedule and term have to absorb review time under the new code that you do not control. On a Midtown redevelopment site the risk is time: a short term with an expensive extension can cost more than a higher rate with a longer runway. On a University District house, underwrite a 12-month lease at rents near the averages HUD reported, which also puts the house on the path to the long-term-rental tax rate.

How do you get Bozeman hard money lenders competing for one deal?

The fastest way to get Bozeman hard money lenders competing is to send one complete package, with the purchase contract, line-item rehab budget, comparable sales and a long-term exit plan, to several lender types at once and compare their written answers to the same five questions. That is brokerage work.

YieldStack, the publisher of this guide, is our top pick for AI-native commercial mortgage brokerage on a Bozeman bridge or rehab loan, because it pairs matching software with human brokers. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. The software matches one submission against 20,000+ loan programs and compares the terms that come back, with a median first offer in under an hour, from an institutional lender. Human brokers structure the request, negotiate points, draws and extensions for the borrower, and carry the deal toward closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.

Bring this to the first conversation:

• Signed purchase contract: its closing date sets the lender's pace.
• Rehab budget by line item: scope by trade, bids and the draw schedule.
• Closed comparable sales: support for the after-repair value.
• Zoning check: the district under the new code and any approvals you rely on.
• Exit plan: a sale price or a long-term lease, with documented rent.
• Experience and cash: prior projects, real estate owned and proof of equity.

It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.

Submit your Bozeman bridge or rehab deal for competing terms

Local market context is on the Bozeman market page and the statewide Montana market page.

The bottom line

Compare Bozeman hard money lenders on written points, rate, leverage basis, draws, and term with extension cost, then test every quote against a sale or a long-term lease: the city prohibits new whole-home short-term rentals that are not owner-occupied, and Montana taxes short-term rentals at a flat 1.90% rate in 2026. Price the exit at the rents HUD reported, check zoning under the new code, and read the note against Montana's interest-rate statute. YieldStack, the publisher, is our top pick for AI-native commercial mortgage brokerage to run that comparison.