Agency Reports Record Breaking Loan Production

BISMARCK, ND – First-time buyers pushed North Dakota Housing Finance Agency’s (NDHFA) homeownership program to a record breaking level this spring.

“NDHFA’s FirstHome™ loan reservations total in May was 185 percent higher than last year,” said Jolene Kline, NDHFA executive director. The state agency’s program provides first-time home buyers with low-cost financing and, if desired, down payment and closing cost assistance.

The agency received 262 loan reservations in May for $44 million in financing, the highest non-special event month on record. During the same time period in 2017, NDHFA recorded 141 reservations. The agency’s staff attributes some of the demand to the interest rates it is currently offering.

“With conventional financing at 4.25 percent and NDHFA at 3.75 percent, the payment on a $200,000 loan is about $60 less per month,” said Dave Flohr, NDHFA homeownership division director.

The greatest uptick in program activity is in Grand Forks County, almost double last year’s. In Williams County, where a limited number of entry-level homes are reportedly available, NDHFA’s loan production is down 25 percent. The greatest overall program use, as is the norm, is in Cass and Burleigh/Morton counties.

Private-sector lenders originate loans on NDHFA’s behalf and sell them to the agency when the loans are closed. Year-to-day, the average loan purchased by the agency is just under $167,000. The limit for single-family homes purchased is $271,164 to $303,882, depending on household size and the county in which the property is located.

NDHFA’s program is available to state residents earning up to $98,900 who have not owned a home in the last three years. In 2017, the average borrower’s household income was $56,000.

Sixty percent of NDHFA’s borrowers use the down payment and closing cost assistance offered. “The purchase assistance allows these buyers to enter the market sooner and to keep their funds for household expenses like a lawn mower, furniture and paint for their new house,” said Flohr.

“Homeownership rates in North Dakota declined during the energy boom with many incoming households choosing to rent,” said Kline. “If our purchase activity is indicative of more households becoming homeowners, that is a good thing for North Dakota because homeowners are more invested in their community.”  In 2010, the U.S. Department of Census reported that 65.4 percent of North Dakotans owned a home. It is now estimated at 63.5 percent.

A 1997 federal disaster declaration allowed NDHFA to provide purchased assistance to households impacted by flooding including those who had previously owned a home and those whose income exceeded normal program limits. That special event resulted in 280 loans in March 1998 and 268 in Sept. 1997.

About NDHFA
NDHFA is a self-supporting state agency dedicated to making housing affordable for all North Dakotans.  The Industrial Commission of North Dakota, consisting of Governor Doug Burgum as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees the agency. More information about NDHFA’s homeownership programs is available online at www.ndhfa.org.

Media Contact
Sarah Mudder
(701) 328-8056
smudder@nd.gov