Housing Agency a Top FHA Loan Servicer

BISMARCK, ND – The U.S. Department of Housing and Urban Development’s (HUD) National Servicing Center has ranked the North Dakota Housing Finance Agency (NDHFA) as a Tier 1 Federal Housing Administration (FHA) loan servicer for FY 2018.

A state agency, NDHFA provides first-time buyers with purchase assistance including loan guarantees that allow low- to moderate-income borrowers with low down payments to achieve homeownership.

“NDHFA’s homeownership programs are not only affordable, all of our loans are serviced locally so that our borrowers are able to speak to a real person if they have a question about their loan,” said Dave Flohr, the agency’s homeownership division director.

The tier ranking system measures FHA servicer compliance with guidelines and intervention requirements, loss mitigation engagement, and reporting. The intention is to protect borrowers and alert HUD to potential problems. A high work-out ratio shows a servicer’s effectiveness in working with delinquent borrowers to keep them out of foreclosure.

“HUD is very focused on timely reporting of delinquency issues with the intention of getting borrowers back on track as soon as possible,” said Flohr.

The loan servicers receive quarterly scores that were averaged to produce the final fiscal year-end score. NDHFA scored 95.77 percent for the year.

Of the 9,000 loans NDHFA currently services, approximately 45 percent are FHA guaranteed.

A self-supporting state agency, NDHFA is 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 is available online at www.ndhfa.org.

Counseling Grants Improve Housing Situations

BISMARCK, ND – North Dakota Housing Finance Agency (NDHFA) has been awarded a $102,345 U.S. Department of Housing and Urban Development (HUD) housing counseling grant for fiscal year 2018.

“Housing counseling grants support programs that educate first-time home buyers, help individuals and families secure affordable rental housing, and offer financial literacy training,” said Jolene Kline, NDHFA executive director.

NDHFA will split the grant dollars between two affiliate organizations – Community Action Opportunities of Minot and South Eastern North Dakota Community Action Agency of Fargo.

NDHFA was one of 17 state housing finance agencies (HFAs) to receive a counseling grant from HUD this year. HFAs typically act as an intermediary for their state, partnering with local organizations to provide assistance to low- to moderate-income households. The HFAs also help improve the quality of the counseling services and enhance coordination among the providers.

HUD’s housing counseling grants are awarded annually through a competitive process. The organizations that apply must be preapproved by the federal agency and are subject to biennial performance reviews to maintain the approved status.

A self-supporting state agency, NDHFA is 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 is available online at http://www.ndhfa.org.

Housing Agency Wraps Up Record-Breaking Year

BISMARCK, ND – North Dakota Housing Finance Agency (NDHFA) is wrapping up a record-breaking year. The state agency, known primarily for the affordable financing it offers through its FirstHome™ program, set a production record in 2018 by purchasing 1,798 loans with a total value of more than $300 million.

“If the increased activity is indicative of more young families, both those new to North Dakota and life-long residents, pursuing homeownership, that’s good for all of North Dakota because homeowners are typically more invested in their community than renters,” said Jolene Kline, NDHFA executive director.

NDHFA’s loan production was 134 percent higher in 2018 than the previous year. Activity peaked in May when NDHFA received 246 reservations for $41.5 million in financing. The agency’s staff attributes some of the increased demand to the interest rates it was able to offer this past year.

“A favorable market for the mortgage-revenue bonds that fund our FirstHome program allowed NDHFA to offer financing for most of the year at a rate that was lower than what was available in the conventional marketplace,” said Dave Flohr, NDHFA homeownership division director.

“The one-half of one percent or more rate difference results in significant savings on monthly payments.”This past year, two-thirds of FirstHome program users also utilized the down payment and closing cost assistance NDHFA offers. “The assistance allows first-time buyers to enter the market sooner or to retain their savings for household expenses they didn’t have as renters like purchasing a lawn mower or snow blower,” said Flohr.

The purchase price of single-family homes financed through NDHFA’s FirstHome program cannot exceed $271,164 to $303,882, depending on household size and the county in which the property is located. The average FirstHome loan purchased in 2018 was just under $166,000. The program is available to state residents earning up to $98,900 who have not owned a home in the last three years. The average FirstHome borrower’s household income in 2018 was $58,600.

In addition to the FirstHome loans NDHFA purchased, the agency’s production total for the year includes its HomeAccess loans, a program for special needs households who may have previously owned a home, and North Dakota Roots, a program that assists moderate-income buyers who may have previously owned a home and first-time buyers whose income exceeds the FirstHome program limits.

In an average year, NDHFA purchases 1,200 loans. Private-sector lenders originate loans on the agency’s behalf in communities statewide and sell them to NDHFA when the loans close. Currently, 47 financial institutions across the state are partnered with the agency to offer its financing. The greatest overall program use is in Cass and Burleigh/Morton counties.

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.

Redevelopment of Jr. High Brings Affordable Housing to Heart of Mandan

Kline

“NDHFA is pleased to be able to provide the support needed to transform the property, restoring a community landmark and bringing affordable housing to the heart of Mandan,” said Jolene Kline, NDHFA executive director.

MANDAN, ND – A community landmark, once commonly known as Mandan’s Jr. High School, was celebrated today as Historic Apartments on 4th, an affordable home for individuals and families.

“With the first tenants moving in this week, the Grand Opening celebration offered community members the opportunity to roam the halls of the school one last time,” said Erin Anderson, The Commonwealth Companies vice president of development.

Mandan Public School District sold the property in 2012 to Yegen Development who, after failing in its attempt to redevelop the school, donated it to Spirit of Life Catholic Church. In 2016, the church transferred ownership to Commonwealth with the understanding that it would become affordable rental housing.

The renovation Commonwealth spearheaded preserved the property’s historic features including terrazzo flooring, woodwork and school lockers, while providing the new tenants with 39 one- to three- bedroom apartments with modern amenities including energy-efficient appliances, central air conditioning and secured entrances.

“NDHFA is pleased to be able to provide the support needed to transform the property, restoring a community landmark and bringing affordable housing to the heart of Mandan,” said Jolene Kline, NDHFA executive director. “The development resources the agency provided creates homes and being able to afford a ‘home’ is crucial to every North Dakotans’ wellbeing.”

NDHFA awarded $698,822 in tax credit authority to the project through the federal Low Income Housing Tax Credit program. The credits were syndicated by Redstone providing $6.2 million in project equity. NDHFA also awarded the project more than $1 million from the National Housing Trust Fund.

Historic Apartments on 4th received $1.3 million in Historic Tax Credits from the US Department of the Interior, and the City of Mandan approved a Payment in Lieu of Taxes which reduced the development’s property tax burden. Construction financing was provided by Sterling Bank. The total cost of the redevelopment was more than $8.8 million.
Located at 406 4th Street NW in Mandan, ND, the original building on the site was completed in 1917, it and three adjoining buildings, constructed in 1924, 1954 and 1977, were redeveloped to create the apartments, a community room, fitness center, and a small daycare center with a private playground.

All of the housing units at Historic Apartments on 4th are reserved for income-qualified households and rent for $499 to $775 depending on unit size and household income. In addition to running the on-site daycare, the Mother Teresa Outreach, an affiliate of Spirit of Life Church, will offer supportive services to tenants who have experienced housing instability.
Individuals interested in learning more about the apartments should contact Kaycee Boehm, the property’s on-site manager, (701) 751-1542 or customerservice@metroplains.com.

From the Director, November 2018

Jolene Kline, NDHFA executive director

Over the past seven years, NDHFA has leveraged the state’s Housing Incentive Fund, working with developers and non-profits across North Dakota to create affordable housing and permanent supportive housing units for low- to moderate-income households, persons with disabilities, the frail elderly, and individuals and families experiencing homelessness.

What we have learned along the way, as many of you already know, is that the need is greater than the available resources. During the last funding round, eight applicants requested more than $4.7 million, however, only $1.6 million from HIF re-balancing dollars was available. The applicants also requested Low Income Housing Tax Credits and Housing Trust Fund dollars because projects that serve extremely low-income households need to have minimal to zero debt after construction to be able to cover operational and maintenance costs.

With our HIF resources now depleted, NDHFA’s staff waits to see if the program will receive new funding during the 2019 North Dakota Legislative Session.

During a recent meeting with the state’s Office of Management and Budget and the Governor’s staff, NDHFA requested $50 million be included in Governor Burgum’s budget for HIF. We know this is a substantial request, but we also know that the demand is present across the state as housing affects every community, urban and rural. Numerous organizations have reached out to NDHFA offering support for HIF, and it is reassuring to know that we are not the only entity that believes in the program.

Fortunately, housing is a bi-partisan issue, and we look forward to working with all of our state legislators, either newly elected or those returning to the capitol in January, to come to an agreement on the program’s future funding level.

At the federal level, NDHFA also continues to express the importance of development programs to rural states, working to ensure our message is not muted by states with larger populations. This year, North Dakota was one of the first states in the country to successfully construct and lease up a project utilizing the Housing Trust Fund, which was created and implemented in 2016. Our close relationships with local communities and public and private entities expedited the planning and construction process, which is sometimes envied by other states.

Recently, after evaluating more ways to get people into homes without using state or federal funding, NDHFA modified our North Dakota Roots program, increasing the income limits to assist in communities where the housing market still presents challenges. Roots is a resource for local lenders to be able to offer affordable financing and down payment and closing cost assistance to households who may have previously owned a home or who are first-time buyers whose incomes exceed the limits of our FirstHome™ program.

And, while the market greatly impacts the ability of people to find housing, sometimes the challenges are created by the individual. Through our newly implemented and operational Opening Doors Program, landlords now have access to a risk mitigation fund that eases concerns about housing individuals and families who have had bad experiences in the past either as a renter or in the justice system. Funding for Opening Doors was made possible through a partnership with the ND Dept. of Human Services.

NDHFA continues to evaluate our existing programs and make modifications, responding to market and community needs. With the changes made recently, we anticipate increased business and we hope that 2019 will be another record-breaking year for the agency as we strive to ensure that everyone has a safe and affordable place to call home.

Supportive Senior Housing Projects Awarded Development Assistance

BISMARCK, N.D. – North Dakota Housing Finance Agency (NDHFA) has awarded development assistance to four affordable housing projects that will offer supportive services to help their senior tenants age in place.

NDHFA awarded a total of $3.39 million in federal tax credit authority to the projects through the Low Income Housing Tax Credit (LIHTC) program which will generate more than $30 million in equity. The Agency also awarded $2.8 million from the National Housing Trust Fund (HTF) and $1.6 million from the state’s Housing Incentive Fund (HIF).

“North Dakota’s seniors are one of the most housing insecure and cost-burdened sectors of our population,” said Jolene Kline, NDHFA’s executive director. “Focusing our development resources on supportive housing for these households allows seniors of limited means to live safely and comfortably, and reduces the burden placed on the state if the other alternative is a costly long-term care facility.”

About the Projects

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Century Cottages, a CommunityWorks North Dakota project, will be located on Century Ave. in Bismarck, ND.

Century Cottages, a CommunityWorks North Dakota project that will be located on Century Ave. in Bismarck, ND received $788,000 in LIHTCs. NDHFA also made a commitment of $300,000 from the HTF and $408,047 through HIF. The project will create 35 new one- and two-bedroom apartments. Twenty percent of the units will be reserved for households that require assistance to live independently. The cost of construction is estimated to be $8.5 million.

The Schuett Companies was awarded $899,000 in LIHTCs to support acquisition and renovation of Patterson Place Apartments in downtown Bismarck, ND. The project will also receive $2.5 million from the HTF. The 117-unit property will continue to be operated as housing for seniors and individuals with disabilities. In addition to supportive services, 24/7 staffing will be added. The total project cost is more than $17.2 million.

The Housing Authority of Cass County was awarded $850,000 in LIHTCs to develop The Monterey, the first phase of a planned replacement of its ND1-1 and ND1-2 properties, commonly known as the West Fargo low-rise. The project was also awarded $600,000 through HIF. The Monterey will consist of 42 one-bedroom and three two-bedroom apartments. Twenty percent of the units will be reserved for households that require assistance to live independently. Separate financing will support the development of office space in the property for the housing authority. The total cost of construction is estimated to be $11 million.

Phase two of the Housing Authority of Cass County’s planned replacement of the ND1-1 and ND1-2 properties, known as The Bridges, was also awarded $850,000 in LIHTCs and $600,000 through HIF. The Bridges will consist of 36 one-bedroom and three two-bedroom units. Twenty percent of its units will also be reserved for households that require assistance to live independently. The estimated cost of construction is $9.6 million.

About the Programs
LIHTC provides an indirect federal subsidy used to finance the construction or rehabilitation of rental housing for lower-income households. The purpose of the HTF is to increase and preserve the supply of housing for extremely low-income households including homeless families. HIF strengthens communities by supporting the development or preservation of rental housing for low- to moderate-income households.

“North Dakota Housing Finance Agency received 25 total applications for development assistance from 12 different projects during our fall 2018 funding rounds,” said Kline. “All of our programs received requests for more than twice the funding available. The greatest demand was for Housing Trust Fund assistance, more than four times what was available.”

The development programs administered by NDHFA have allocation plans that are reviewed annually to ensure that the projects that receive financial awards address the state’s greatest housing needs. The application process for each program is competitive with the top scoring projects receiving the awards. Each applicant must provide evidence that there is a need for the type of housing proposed, that the community supports the development, and that construction costs are reasonable. The period of affordability for the projects receiving federal funds is 30 years, HIF’s period of affordability is 15 years.

Increase in Homeownership Program Income Limits Approved

BISMARCK, ND – The North Dakota Industrial Commission has approved an increase of the income limits for North Dakota Roots, a program that provides affordable financing, and down payment and closing cost assistance to households who may have previously owned a home and first-time buyers whose income exceeds the limits of North Dakota Housing Finance Agency’s (NDHFA) FirstHome™ program.

Roots small“Almost 43,000 households have successfully achieved homeownership with North Dakota Housing Finance Agency’s assistance,” said members of the Industrial Commission in a joint statement. “By increasing the North Dakota Roots program’s income limits, we hope more households will be able to attain that goal and establish themselves and their families in North Dakota.”

The commission, consisting of Gov. Doug Burgum as chairman, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring, oversees NDHFA.

With the Commission’s approval, the Roots program’s maximum income limits were set at 200 percent of area median income, $167,800 to $193,200. The limits vary depending on the county in which the financed home is located.

“During discussions with community leaders and our lending partners, they cited the difficulty of finding a secondary market for loans that don’t qualify for conventional financing,” said Jolene Kline, NDHFA’s executive director. “By offering this financing option, NDHFA can partner more effectively with our lenders. Without a market for these loans, community growth is hindered particularly in rural areas.”

NDHFA’s homeownership program funding is provided by secondary-market capital. A network of private-sector lenders originate loans on behalf of the agency and sell the loans to NDHFA when they are closed. All of the servicing is retained in state.

Through Roots, NDHFA provides financing to approximately 230 households annually. So far this year, the average program user’s household income is $84,170 and the average loan is $212,300.

Known primarily for the financing it offers first-time homebuyers, NDHFA expanded its capacity to new and returning North Dakotans in 2002 dubbing the program “North Dakota Roots.” In 2014, citing the struggle of households whose income exceeds FirstHome’s program limits to afford the down payment requirements associated with conventional financing, the agency expanded Roots to any qualifying household earning up to 140 percent of the area median income. The maximum Roots loan amount must comply with the current Fannie Mae/Freddie Mac conforming loan amount or the limits of the applicable loan insurer/guarantor. All of NDHFA’s borrowers are expected to meet normal credit underwriting standards and occupy the property as their principal residence.

NDHFA is a self-supporting state agency dedicated to making housing affordable for all North Dakotans. More information on the agency’s homeownership programs is available online at http://www.ndhfa.org.