BISMARCK, ND – Rural communities struggling to meet the demand for affordable single-family housing are expected to benefit from an update to North Dakota Housing Finance Agency’s Construction Loan Guarantee program regulations.
NDHFA’s Construction Loan Guarantee program can now provide up to $500,000 per community or per contractor. Prior to the change, the program limited the number of loans guaranteed to no more than three per contractor and five per community.
“The change allows the lender to work with the builder to determine the balance between construction costs and local demand, taking advantage, when possible, of the economies of scale that comes with building multiple homes in one location at one time,” said Jolene Kline, NDHFA’s executive director. “This approach may reduce the overall cost of construction and, in turn, the sale price of the homes.”
NDHFA provides guarantees to lenders for contractors who build or rehab affordable single-family housing on a speculative basis in communities with populations of less than 35,000. Evidence of local support and need for the housing is required to receive a guarantee. The anticipated sale price of the homes must not exceed the Federal Home Administration’s current mortgage limits.
“Our goal is to create more affordable purchase opportunities in our growing communities,” said Kline.
More information about NDHFA’s Construction Loan Guarantee program, the program guide and application are available online at www.ndhfa.org or calling (800) 292-8621.
The application deadline for the updated guarantee amount is Aug. 31. Awardees will be chosen based on their ability to efficiently leverage the program. After Sept. 1, awards will be made on a first-come first-served basis until all of the funds have been committed. Currently $1 million is available and while the maximum award is $500,000, there is no minimum award limit.