Agency Reports Record Breaking Loan Production

NDHFA-LogoBISMARCK, 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-date, 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 lawnmower, 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 purchase 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.

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.

From the Director, June 2018

 

Jolene Kline, NDHFA executive director

This spring, NDHFA staff have been busy breaking records, breaking ground and ranking at the top of the nation!

In May, the agency received a Tier 1 ranking for the FY 2018 Q1 from HUD’s National Servicing Center for servicing Federal Housing Administration guaranteed single-family loans. The tier ranking system measures a mortgagee’s compliance with delinquent servicing guidelines and requirements in the areas of early delinquency intervention, loss mitigation engagement quantity and quality, and reporting. HUD established the tier ranking system to protect FHA borrowers from servicer non-compliance and to monitor potential servicer-specific or industry-wide delinquent servicing issues. A higher work-out ratio shows a servicer’s effectiveness in working with delinquent borrowers to keep them out of foreclosure. We are proud for scoring 97.18 percent!

Since the beginning of 2018, we’ve tracked the uptick in our FirstHome™ loan reservations. In May, they were 185 percent higher than last year, officially breaking the agency record. We received 262 loan reservations that month for $44 million in financing, which is our highest non-special event month ever. During the same time period in 2017, NDHFA recorded 141 reservations. The agency’s staff attributes private-sector lenders originating loans on our behalf and the current interest rate. NDHFA recently closed on the sale of $125 million in private activity bonds leveraging private capital to allow the agency to purchase these mortgages from the originating lenders.

Breaking ground happened at the YWCA Cass Clay Grace Gardens which will provide housing for up to 30 women and their children at-risk of homelessness, many of whom are transitioning from domestic violence situations. It was a privilege to stand with the YWCA, Lutheran Church of the Cross who is leasing the land for the project, Gate City Bank who is donating $1.5 million over 12 years for start-up costs and supportive services, ND Department of Commerce for committing $250,000 in CDBG funding for land acquisition, Housing Authority of Cass County for committing $2 million in Housing Choice Vouchers, and Beyond Shelter for developing the residence. This project is a true example of a public-private partnership that creates safe and affordable housing with supportive services unique to each family’s needs and goals to improve their economic stability and break the cycles of abuse and poverty for the next generation. The development assistance provided to the project by NDHFA is just shy of $7 million.

I hope the second half of the year keeps on track with all of the successes we’ve been able to celebrate this year.

Long-Serving State Employee Set to Retire

Delores Hummel

BISMARCK, ND – More than 55 years after she began working for the State of North Dakota, Delores Hummel is ready for retirement. Not only is she one of the state’s longest-serving employees, she’s also had a front-row seat for the roll-out of several significant government programs.

In 1963, one day after graduating from Bismarck High School, Hummel began working at the Public Welfare Board, the state agency now known as the Department of Human Services (DHS), for the Old Age Assistance Program where she processed reimbursement claims submitted by the counties.

“When I started at DHS, everything was merit-based,” said Hummel. “I took a test a couple weeks before I graduated from high school, received a notice in the mail that I’d passed and, when I called, I was offered a position as a clerk.”

A couple years later, after Title XIX of the Social Security Act established Medicaid, Hummel was transferred to a newly created division, Medical Services. She was one of the three employees who worked to establish the medical assistance program in North Dakota. DHS’s Medical Services Division now employs 49 people.

“Later, I was assigned as a committee clerk for the peer review committees that established guidelines for physicians, pharmacists, dentists, hospitals and nursing homes in implementing Medicaid provisions in their respective practices,” said Hummel. “It was probably my favorite position, something I really enjoyed.”

Hummel’s career turned toward housing in 1973, when she moved within DHS to work on an Experimental Housing Allowance Project. North Dakota was one of a handful of states to pilot the U.S. Department of Housing and Urban Development program. What began in only four counties – Burleigh, Cass, Stark and Stutsman – went statewide as the Section 8 Housing Assistance Program (HAP).

In 1980, an initiated measure established a housing finance program within the North Dakota Industrial Commission to provide affordable financing for first-time homebuyers. The commission directed the Bank of North Dakota to act as the North Dakota Housing Finance Agency (NDHFA) and later directed the bank to administer the HAP program as well. Two years later, NDHFA broke away from the bank and Hummel stayed on to manage the newly formed agency’s administrative needs. For the final 36 years of her career, she has remained in that capacity, acting as NDHFA’s business manager.

During Hummel’s 55 years with the state, there were eight different governors – William Guy, Arthur Link, Allen Olson, George Sinner, Ed Schafer, John Hoeven, Jack Dalrymple and Doug Burgum. She didn’t anticipate this run. Nonetheless, she has this to say about the experience, “Each of the positions I held were challenging and interesting. It truly provided me with a very rewarding career.”

NDHFA will host an open house to honor Hummel on July 3, 2018, from 2:00-4:00 p.m. The event will take place at the agency’s Bismarck office, 2624 Vermont Avenue.

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.

YWCA Grace Garden groundbreaking promises critical answer to women and families starting new lives.

 

More photographs from the event are available on NDHFA’s Facebook page.

WEST FARGO, ND – YWCA Cass Clay broke ground today on a new residence, Grace Garden, in West Fargo, ND, that, when it opens in 2019, will reflect a new ideal of how to end homelessness by providing ‘Housing First’.

“Stability is the key to success,” says YWCA CEO Erin Prochnow. “Grace Garden will be a place of safety and sure footing for 30 women and their children seeking a better life. At the residence, families will be able to improve their economic stability and health, breaking the cycles of abuse and poverty for the next generation by being assured of an affordable home and support that’s unique to each family’s goals.”

The new $4.3 million property follows the current mindset in America, one that YWCA Cass Clay has championed for decades.

The Housing First homeless prevention model seeks to get those who are homeless out of crisis and rapidly into safe and affordable housing. From this sure ground, women and children get continuous support and guidance from a YWCA advocate as they work on personal goals for jobs, health, education, parenting and more.

The Grace Garden idea first arose when Pastor Joel Baranko of Lutheran Church of the Cross reached out to the YWCA. Interested developers had offered to purchase the large grassy lot adjacent to the church’s property at 1402 16th St. E. in West Fargo, however the church declined offers that were not consistent with its mission and might have resulted in a less neighborhood-friendly project.

“I began to wonder how God might be calling us to put to good use the property with which we had been entrusted. How can we live and love like Jesus with this land?” recalls Baranko.

The congregation voted to lease the site to YWCA in May of 2018, providing an ideal situation for families served by YWCA because of the close proximity to schools, bus routes, employment and worship opportunities.

Gate City Bank demonstrated their commitment to providing a better way of life by pledging $1.5 million to fund project start-up costs and support services over the first 10 years.

“It’s particularly exciting to fund the staff or human side; the real game-changer to empowering women after they’re safely housed. They get practical life guidance, encouragement and someone to walk alongside them as they courageously work towards life goals they determine. The impact will be great for generations to come,” said Kim Meyer, Gate City Bank Executive Vice President of Retail Banking and Human Resources.

In November 2017, North Dakota Housing Finance Agency (NDHFA) awarded development support to the residence through the federal Low Income Housing Tax Credit, $672,500, and National Housing Trust Fund, $325,549, and the state’s Housing Incentive Fund, $500,000.

“Grace Garden is a partnership of caring concern from the nonprofit, business and community sectors,” said Jolene Kline, NDHFA executive director. “We are pleased to be able to provide the public sector support needed to complete this extraordinary project, ensuring women and children transitioning from domestic violence have a safe and affordable place to call home.”

The North Dakota Department of Commerce is supporting the land acquisition for Grace Garden through the Governor’s Community Development Block Grant Discretionary Funds.

“Our goal at Commerce is directly related to family stability and community revitalization,” Adele Sigl with the North Dakota Department of Commerce said. “Everyone deserves a place to call home and this new YWCA Supportive Housing project is a community solution to help eliminate homelessness by providing hope, dignity, and support in the form of permanent supportive housing.”

The residence will also receive rental assistance from the Housing Authority of Cass County. A $2.2 million, 15-year contract provides 30 Housing Choice Vouchers to ensure every apartment will be affordable to the families that will call them home.

Thanks to the financing secured, the YWCA will not need to conduct a capital campaign to build Grace Garden. The YWCA will fundraise and facilitate donation drives for furniture, equipment and supplies to help families and operate the building.

The YWCA first ventured into providing supportive housing in 1989 when donors gifted a Fargo four-plex to the organization. Today, it operates 32 supportive housing units. The addition of Grace Garden will allow the YWCA to far exceed expansion plans that were put in place by the organization’s local governing board in 2015, a five-year goal of 40 supportive apartment spaces by 2020.

In 2017, 314 women and children were eligible for the YWCA’s supportive housing units, but only 60 were able to gain homes through the organization. “Unfortunately, women escaping domestic violence typically do not score high enough on assessments to be rapidly housed,” said Prochnow.

Prospective participants for supportive housing in the Fargo metro area are screened through an assessment tool used universally by shelters in the region. Shelter providers meet weekly to review the risk scores of homeless individuals in the system. Openings in housing programs are outlined and applicant’s risk scores are used to match them with a housing program that fits.

Grace Garden’s residents will come primarily from the YWCA emergency shelter and other referring agencies in the community.

Construction on the two-story building begins this summer and is expected to finish in spring 2019. The property will include one- to four-bedroom apartments and community spaces for classes and gatherings. Main floor offices will be home base for YWCA advocates, nursing and other professional resources coming onsite.

About YWCA Cass Clay
YWCA emergency shelter is where victims of domestic violence come day and night, 365 days a year, to escape crisis lives and mend emotionally, physically and spiritually. They receive crucial basics like food and clothing, and resources for education and employment as they navigate toward independence. A caring YWCA team connects women and children to community resources that will further empower them. Besides operating the largest emergency shelter for women and children in North Dakota and northwestern Minnesota, YWCA Cass Clay operates safe and affordable, short- and long-term supportive housing for low-income women. YWCA offers a food pantry, racial justice advocacy, and a nationally accredited public childcare center, A Child’s World. For more information, visit www.ywcacassclay.org.

Agency Receives Tier 1 Ranking

North Dakota Housing Finance Agency (NDHFA) received a Tier 1 ranking for the FY 2018 Q1 from the U.S. Department of Housing and Urban Development’s (HUD) National Servicing Center for servicing Federal Housing Administration (FHA) guaranteed single-family loans.

“NDHFA scored 97.18 percent ranking the agency in the top 17 percent of all FHA servicers nationwide,” said Dave Flohr, the agency’s homeownership division director. That quarter, 971 FHA servicers were scored.

The tier ranking system measures a mortgagee’s compliance with delinquent servicing guidelines and requirements in the areas of early delinquency intervention, loss mitigation engagement quantity and quality, and reporting.

HUD established the tier ranking system to protect FHA borrowers from servicer non-compliance and to monitor potential servicer-specific or industry-wide delinquent servicing issues. A higher work-out ratio shows a servicer’s effectiveness in working with delinquent borrowers to keep them out of foreclosure.

“The ratios used for the calculations can be unpredictable and a score can be impacted by one loan’s performance,” said Flohr. “For that reason, our score doesn’t matter as much to HUD as consistent compliance with policy and regulations.”

Of the 8,200 loans NDHFA currently services, 3,900 are FHA guaranteed. The last time the agency was ranked Tier 1 was for FY 2017 Q1.

NDHFA is a self-supporting state agency dedicated to making housing affordable for all North Dakotans. More information on the agency and the affordable housing programs it administers is available online at www.ndhfa.org.

From the Director, May 2018

The 2018 Statewide Housing Conference brought together more than 340 housing providers, lenders, real estate agents, tribal members, state and federal employees, and invested citizens of our state. Problem solving happens around a cup of coffee and in the hallways, and that was evident as individuals from numerous industries were able to share what they are experiencing from each corner of the state in relation to the current housing market.

Lieutenant Governor Brent Sanford reiterated how critical housing is and how much it impacts the state’s economy—if people can’t afford to live in a community, business can’t find a reliable workforce. It was insightful to hear how Watford City rallied the public and private sector to find solutions to challenging issues and how our agency was able to bring to the table financing programs such as the Housing Incentive Fund, Low Income Housing Tax Credit and Law Enforcement Pilot Program.

We also learned that although North Dakota has an affordable housing shortage, so does every other state in the country. What makes us unique is that builders are building even if the homes are larger and at a higher price point. Our featured speaker, economist Elliot Eisenberg, Ph.D., stated that the United States economy is strong and will continue to be so for another 18 months. Even though time and stability are on our side, we have to be prepared to reinvent ourselves in the event of a recession.

This month, state agencies will meet with the Office of Management and Budget and Governor Burgum’s staff to discuss how we can reinvent the way we do business to be more efficient, enhance the customer experience and trim our budgets by at least 10 percent. The fluctuating state budget is already impacting agencies eight months prior to the 66th Legislative Session.

So how does NDHFA begin to reinvent itself while also looking at ways of doing more with less? We are having those conversations around the table over a cup of coffee and in the hallways, seeking everyone’s input because right now, no idea is a bad idea.

We remain committed to our homeownership programs. Homeownership provides stability and shelter, and to help more people achieve this milestone, our income and acquisition limits were just increased. The maximum income limits for NDHFA’s FirstHome™ and HomeAccess programs were set at $83,900 to $98,900, and North Dakota Roots was set at $117,460 to $138,460. The limits vary depending on household size and the county in which a financed home is located.

The FirstHome and HomeAccess acquisition cost limits were set at $271,164 to $303,882 for a new or existing single-family home. Higher limits were approved for existing two- to four-unit properties. These limits also vary based on the county in which a property is located. North Dakota Roots program users must comply with limits set by their loan insurer or guarantor.

Two of our most successful affordable multifamily housing development programs, Low Income Housing Tax Credit and National Housing Trust Fund, are currently open for applications for their 2019 and 2018 funding rounds, respectively. The assistance can be used to support the construction, preservation or rehabilitation of rental units for the most vulnerable members of our communities, ensuring these individuals and families have a safe, decent and affordable place to call home.

While the next few weeks will be spent analyzing budgets, staffing and programs, we will also be rolling out a new Landlord Risk Mitigation Fund. This fund is feasible through a partnership with NDHFA and the North Dakota Department of Human Services to mitigate the potential financial risk to landlords who rent to individuals with a criminal background, bad credit or previous eviction history. NDHFA will be implementing the fund in a manner similar to the program offered by the Fargo-Moorhead Homeless Coalition. Additional information will be provided soon.

The Landlord Risk Mitigation Fund was a goal outlined in North Dakota’s 10-Year Plan to End Long-Term Homelessness that was drafted by the ND Interagency Council on Homelessness in 2008. NDHFA is also working on drafting the final report and evaluating how the state has done overall to end long-term, chronic homelessness. This project involves many program managers in numerous state agencies in addition to the mayors of Bismarck, Fargo and Grand Forks. Social and housing issues are never resolved without collaboration and pooling of resources, and the future is faced with more obstacles due to the magnitude of the behavioral health epidemic and the upswing in Bakken oil production. We know that we did not reach our final goal from a decade ago, but that doesn’t mean we haven’t produced successes.

We have a lot of work to do, we always do. And, the staff at NDHFA are proud to work with all of you to make North Dakota a place that more than 700,000 individuals can call home.

Homeownership Program Eligibility Limits Increased

NDHFA-LogoBISMARCK, ND – The North Dakota Industrial Commission has approved an increase in the eligibility limits for state programs that assist with home purchases. Administered by North Dakota Housing Finance Agency (NDHFA), the programs help North Dakotans, typically first-time buyers, buy a home by providing low-cost financing, and down payment and closing cost assistance.

“With these increases we hope that more North Dakotans will be able to purchase a home,” said commission members in a joint statement. “The North Dakota Housing Finance Agency has already helped 42,000 individuals and families become homeowners by providing more than $3 billion in financing since 1982.” The Industrial Commission, consisting of Gov. Doug Burgum as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees NDHFA.

The maximum income limits for NDHFA’s FirstHome™ and HomeAccess programs were set at $83,900 to $98,900, and North Dakota Roots was set at $117,460 to $138,460. The limits vary depending on household size and the county in which a financed home is located.

The FirstHome and HomeAccess acquisition cost limits were set at $271,164 to $303,882 for a single-family home. Higher limits were approved for existing two- to four-unit properties. These limits also vary based on the county in which a property is located. North Dakota Roots program users must comply with limits set by their loan insurer or guarantor.

“During the first quarter of 2018 North Dakota Housing Finance Agency’s FirstHome program saw a 47 percent increase in program activity over the same period in 2017,” said Jolene Kline, NDHFA executive director. “If the trend continues, 2018 will be busy for our Homeownership Division.”

In 2017, NDHFA assisted 1,076 first-time homebuyers through its FirstHome program. The average borrower’s household income was $57,573 and the average loan amount was $162,643.

The income and acquisition cost limits for NDHFA’s programs are regulated by the U.S. Department of Housing and Urban Development and the Internal Revenue Service respectively. The updated limits are effective for loan reservations dated on or after May 1, 2018.

Through HomeAccess, special needs households who may have previously owned a home may receive the same purchase assistance as first-time buyers. NDHFA’s North Dakota Roots program provides purchase assistance to moderate-income buyers who may have previously owned a home and first-time buyers whose income exceeds the FirstHome program limits.

Private-sector lenders originate the mortgage loans on NDHFA’s behalf and sell them to the agency when the loans are closed. Parties interested in learning more about the programs will find information online at http://www.ndhfa.org.

NDHFA is a self-supporting state agency dedicated to making housing affordable for all North Dakotans.