From the Director, June 2017

Jolene Kline, NDHFA executive director

Summer is always a busy time of year in North Dakota and for the housing industry this year isn’t any different.

While new home construction remains well off the record pace we saw just a few years ago, we are seeing more activity under NDHFA’s homeownership programs. Year-to-date through May, our flagship FirstHome™ program is up by 55 loans over 2016. That may not sound like a lot, but it amounts to about $10.4 million more in loans that we’ve purchased this year than last. That signals to me that as price increases have moderated, more people are taking advantage of the opportunity to become homeowners.

This was part of the economic playbook all along. As supply and demand reached equilibrium, those who had been shut out would again be able to enter the market. For many, though, the down payment assistance offered through NDHFA makes all the difference. In 2016, more than 80 percent of the borrowers using our programs also utilized this important resource. I expect that we will continue to see that trend this year and into the future.

Our partners know better than anyone that the past decade has been chock full of ups and downs, challenges and opportunities. In the case of a lot of first-time homebuyers, for everything in their favor, it seemed like there was something against them – interest rates were low, but prices were higher; new construction meant there were more homes on the market, but the competition was fierce. While things may have slowed down from the white hot housing market a few years ago, the people NDHFA loans are targeted at have benefited. The more people we can get into reasonable and affordable homeownership, the better off and more sustainable our communities and state will be.

Our main goal at NDHFA is to provide access to housing resources for the people who need it most. We can’t do that without our private sector partners and I want to express my deepest appreciation to you for making June Homeownership Month – and every month – a great time to buy a home.

Homeownership Purchase Price Limits Updated

BISMARCK, ND – The Industrial Commission approved updated purchase price limits for North Dakota Housing Finance Agency’s (NDHFA) FirstHome and HomeAccess programs. The agency assists state residents in becoming successful homeowners by providing low-cost financing, down payment and closing cost assistance, and by offering homebuyer education.

“The Housing Finance Agency’s programs have provided North Dakota families with a consistent and reliable source of affordable mortgages for more than 30 years,” said members of the Industrial Commission in a joint statement. The commission, consisting of Governor Jack Dalrymple, as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees NDHFA.

The purchase price limits for Burleigh, Morton, Stark and Williams Counties were set at $276,506 for a new or existing single-family home. For other areas of the state, the limits were set at $255,574. Higher limits are available for existing two- to four-unit properties. The change is effective June 1, 2016.

NDHFA’s purchase assistance is used primarily by low- to moderate-income first-time homebuyers.

“We are anticipating that 2016 will be a good year for first-time buyers,” said Jolene Kline, NDHFA executive director. “Our FirstHome program activity is currently up 25 percent over the previous year with an average loan amount of $155,650, approximately $5,000 higher than in 2015.”

Special needs households, including those headed by a single parent or an honorably discharged veteran, or with a disabled or elderly household member, are able to receive the same assistance as first-time homebuyers through NDHFA’s HomeAccess program.

Based on Federal Housing Administration loan limits, purchase price limits are dictated by the Internal Revenue Service. The limits are adjusted to take into account the differences between average and median home prices and do not differentiate between new and existing properties.

More than 40 financial institutions statewide partner with NDHFA to offer the agency’s homeownership programs. The lenders verify borrower eligibility and originate the loans. Once a loan closes, it is purchased by the agency. Because real estate agents are generally the first contact that households make during their home buying journey, NDHFA offers real estate agents specialized training on its programs. There are more than 500 FirstHome Certified Agents active statewide.

More information on NDHFA’s homeownership programs, and contact information for participating lenders and FirstHome Certified Agents is available online at www.ndhfa.org.

State Updates Homeownership Program Income Limits

BISMARCK, ND – The North Dakota Industrial Commission has approved updated income limits for the state’s homeownership programs.

“Over the past 34 years, North Dakota Housing Finance Agency (NDHFA) has helped 40,000 individuals and families afford a home purchase, making our state stronger by adding households that are invested in their community, paying property taxes that support schools, parks and roads, police departments and public libraries,” said members of the commission in a joint statement. The Industrial Commission, consisting of Governor Jack Dalrymple, as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees the agency.

NDHFA assists state residents, typically first-time buyers, in becoming successful homeowners by providing affordable mortgage loans, and down payment and closing cost assistance, and offering homebuyer education.

“Program activity across the state is strong,” said Jolene Kline, NDHFA executive director. “Reduced pressure on the housing market in Western North Dakota is providing first-time buyers with greater opportunities, while rising prices in Eastern North Dakota are necessitating increased use of our down payment and closing cost assistance programs to be able to afford a purchase.”

The new maximum income limits for the FirstHome™ and HomeAccess programs were set at $75,800 to $101,545, depending on household size and the county where a financed home is located. Through the HomeAccess program, disabled, elderly, veteran and single-parent households are able to receive the same purchase assistance as first-time buyers.

The new maximum income limits for North Dakota Roots, an NDHFA program for moderate-income buyers who may have previously owned a home, were set at $106,120 to $123,620.

The income limits for NDHFA’s homeownership programs are based on median income numbers published annually by the U. S. Department of Housing and Urban Development. Mortgage revenue bond regulations allow the agency to use the greater of county or state median income. The update is effective for loan reservations dated on or after May 1, 2016.

Borrowers are expected to meet normal credit underwriting standards and must intend to occupy the property as their principal residence. A minimum of a $500 out-of-pocket cash investment is required. The purchase price of the property must also be within established program limits.

More than 60 percent of program users received down payment and/or closing cost assistance last year. The average FirstHome borrower’s household income was $57,600, and the average loan was $166,000.

More information on NDHFA’s homeownership programs is available online at www.ndhfa.org.

State Housing Agency Purchases 40,000th FirstHome Loan

BISMARCK, ND – Forty thousand homes have been purchased statewide through North Dakota Housing Finance Agency’s FirstHome™ program – a milestone more than 30 years in the making.

“Many modest income households struggle to afford the down payment and closing costs when they purchase their first home,” said Jolene Kline, NDHFA executive director. “It’s the reason that North Dakota Housing Finance Agency was established, to make homeownership possible.”

The state agency assists North Dakotans, primarily first-time buyers, in becoming homeowners by providing affordable mortgage loans, and down payment and closing cost assistance.

NDHFA Homeownership Division Director Dave Flohr

“North Dakota Housing Finance Agency works hand in hand with lending and real estate partners to deliver our programs to those who need them,” said Dave Flohr, the agency’s homeownership division director.

Over 40 financial institutions statewide actively partner with NDHFA to offer mortgages at an interest rate that currently begins at 3 percent. The lenders determine borrower eligibility and originate the loans. Once a loan closes, it is purchased by the agency.

Because real estate agents are generally the first contact that households make during their home buying journey, NDHFA offers real estate agents specialized training on its program. There are more than 500 FirstHome Certified Agents active statewide.

The maximum household income limit to qualify for an NDHFA loan depends on household size and the county where a financed home is located. The purchase price of the property must also be within program limits.

“As our North Dakota communities continue to grow and become even more vibrant, affordable housing options will be as important as ever,” said Kline. “It has been our great pleasure to serve the people of North Dakota and we look forward to helping another 40,000 families realize their dreams of homeownership.”

In addition to the FirstHome™ program, NDHFA also offers programs for special needs households, moderate income buyers who may have previously owned a home, and assistance for purchasing homes in need of major renovations. More information on the agency’s homeownership programs, and contact information for participating lenders and FirstHome Certified Agents is available online at www.ndhfa.org.

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 Jack Dalrymple as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees the agency.

Homeownership Program Income Limits Increase Statewide

BISMARCK, ND – The Industrial Commission today increased income limits for the state’s homeownership programs, making more North Dakotans eligible for mortgage purchase assistance.  North Dakota Housing Finance Agency (NDHFA) provides down payment and closing cost assistance, and reduced interest rate mortgage loans to income-qualified households.

“More than 39,000 North Dakota families purchased their first home with help from NDHFA,” said Commission members in a joint statement. “Through the agency hundreds of new and returning residents have been assisted in establishing themselves in our communities.”

The Commission consisting of Governor Jack Dalrymple, as chairman, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring oversees NDHFA.

The new maximum income limit for FirstHome™, a program targeted to first-time homebuyers, was set at $74,300 to $97,290, depending on household size and the county where a financed home is located.

“Our FirstHome program activity so far this year has been strong,” said Jolene Kline, NDHFA executive director. “We also anticipate that our new North Dakota Roots program will continue to be popular with moderate-income households that need down payment assistance to move from renting to homeownership.”

The Commission approved revising the eligibility rules of the North Dakota Roots (Roots) program late last summer. The change precipitated a 15-fold increase in program use. Previously Roots borrowers were required to have lived out of the state at least one year before establishing residency; work at least 20 hours per week; and purchase a home within the first year of employment in the state. Those requirements were eased, but household income continued to be within the limits set by the Commission.

“When individuals and families leave other parts of the U.S. that have poor economic conditions, they have often exhausted their savings and have little left to establish themselves,” the Commission members said. “In addition to the changes we made last year, we are hopeful that the updated income limits will enhance this program, assisting more individuals and families wanting to make North Dakota their home.”   The Roots program’s new maximum income limits were set at $104,020 to $118,440.

The Commission also adjusted income limits for NDHFA’s Start and HomeAccess programs. Start is a down payment and closing cost assistance program for first-time buyers. HomeAccess is a purchase assistance program targeted to disabled, elderly, veteran and single-parent households.

A self-supporting state agency, NDHFA helps low- to moderate-income North Dakota households achieve homeownership by offering homebuyer education, down payment and closing cost assistance, and affordable mortgage loans programs. For more information on the agency’s programs, contact an NDHFA participating lender. Information is also available online at www.ndhfa.org.

Rebate Helps Renter Become Owner

Tiffany Hanson’s plans to personalize her new home are on hold until after her wedding. One thing that couldn’t wait was the dog she promised her son, Alex.

When Tiffany Hanson first moved into Bluestem Townhomes, she never knew her monthly rent check would wind up being so valuable.

The property manager of the Fargo affordable housing development told her about the Rent Rebate for Homeownership program, but at the time that the single mom signed the lease addendum, Hanson was more concerned about having an affordable place for herself and her son, Alex, to live. The possibility of receiving a portion of her rent back later to apply towards a home purchase was a nice idea, but it wasn’t in her immediate plans.

Bluestem Townhomes developer, Beyond Shelter Inc. (BSI), began offering rent rebates with the construction of its first Low Income Housing Tax Credit (LIHTC) property in 2001. The organization chose to do so because the program aligned with its mission, “Improving lives and creating communities by developing housing for those most in need.”

Rent rebate programs offered at LIHTC properties require a developer to make a commitment to set-aside a portion of tenant rent to be paid to the lender on behalf of any household that moves from the property directly into homeownership.

North Dakota Housing Finance Agency, administrator of the state’s LIHTC program, encourages developers to offer the rebates by scoring these program applicants higher.

Rebated rent is applied to down payment and closing costs. At BSI properties, tenants must have a minimum of two years of continuous tenancy to be eligible. Hanson is one of only seven BSI tenants, all in the Fargo area, to use the program. Lisa Rotvold, a BSI developer, hopes that more people in communities across North Dakota will take advantage of the program.

“By the end of the year, BSI will have more than 400 units eligible for the program including our newest properties in Minot and Dickinson,” said Rotvold.

For the lower income households that live in the nonprofit’s units, saving for a down payment and qualifying for financing can be challenging.

“Because we are a mission driven nonprofit organization, our average tenant’s income is even lower than those households served at for-profit tax credit properties,” said Rotvold. “Ninety percent of our tenants earn 50 percent of Area Media Income or less ($28,850 for a two-person household).”

Saving for a down payment on a new home can be very challenging for these lower income households. Expenses like car loans, medical bills and daycare all put a strain on their monthly budgets, inhibiting the household’s ability to save. They may have issues qualifying for financing because of lower credit scores. And, families that qualify for a mortgage loan may find that the loan is not large enough to afford what the market is offering.

“For households who have been in one of our developments for a few years, maybe gotten a raise at work or a better job and had time to save some money, then homeownership starts to be more attainable,” said Rotvold. “That is exactly what should be happening. Most families start at one place in life and work hard to move upward.

After living at Bluestem Townhomes for eight years, Tiffany Hanson was able to make the move to homeowner with some help from the Low Income Housing Tax Credit development’s rent rebate program.

“We are happy to be able to help these families realize their dream of homeownership, building equity, and owning an asset that will appreciate,” Rotvold added. “When they move on, that affordable rental unit opens up to another family that needs it.”

When they became engaged, Hanson and her fiancé Scott English decided they wanted a home of their own. Hanson worked two jobs, saved money with English, and used equity from her vehicle to make their homeownership dream come true. The rent rebate turned out to be an added bonus.

“After living at Bluestem for eight years, I had forgotten about it,” admitted Hanson. “The property manager reminded me when I called to put in my notice.”

Hanson and English purchased a home in Osgood, just south of Fargo. It has a poured foundation, one of their major criteria, and is in the right location.  “We jumped and got lucky,” said Hanson. “I didn’t want to regret later not trying to buy it.”

They were fortunate to find the house after only searching for two to three months. After their wedding, the couple has plans to personalize the house, landscape the yard and put up a fence. One thing couldn’t wait though – Hanson agreed to let Alex get a dog, something he couldn’t have in their rental unit.

Start and DCA Programs Seeing Double

North Dakota Housing Finance Agency’s (NDHFA) Start and Down Payment and Closing Cost Assistance (DCA) programs can now be used when purchasing two-unit properties.

“Allowing the Start and DCA programs to be used when purchasing two-unit properties gives first-time homebuyers more ownership options,” said Dave Flohr, the agency’s homeownership division director.

NDHFA’s Start and DCA programs provide first-time buyers with assistance with out-of-pocket cash requirements. Start assistance, equal to three percent of the first mortgage, is provided in the form of a credit to the borrower at loan closing. DCA is a zero-interest, deferred payment loan available to lower income borrowers.

Borrowers using the Start program will now be able to purchase a two-unit property up to $339,456. The limit on one-unit properties purchased with Start assistance is $265,158. The DCA acquisition limits are $249,000 and $195,000 respectively. The change was effective June 30.

Questions should be directed to NDHFA’s loan origination staff, (800) 292-8621 or info@ndhfa.org.

Agency Discounts Homebuyer Education Course

North Dakota Housing Finance Agency’s (NDHFA) online homebuyer education course is getting a little more affordable to help give homebuyers the skills needed for successful homeownership. Through eHome America, participants learn the steps in the home buying process at their convenience.

The fee for the eHome America course recently increased to $99. However, with NDHFA’s discount code, NDHFA49, the fee will be lowered to $50.

“To ensure that all our borrowers can continue to reap the benefits of the program, NDHFA chose to heavily discount the course fee,” said Dave Flohr, NDHFA homeownership division director.

By way of video tutorials, written materials and quizzes, course participants learn how to determine what they can afford; how to secure a mortgage loan; and how to maintain the home purchased. All the materials are online.

“The course is an excellent tool in helping potential buyers better understand the responsibilities and costs associated with homeownership, “said Flohr.

For more information on the eHome America course, contact NDHFA at (800) 292-8621 or info@ndhfa.org.

Housing Agency Increases Loan Purchase Price Limit

BISMARCK – The Industrial Commission has increased the purchase price limit of North Dakota Housing Finance Agency (NDHFA) homeownership programs from $250,000 to $265,158 in accordance with Internal Revenue Service guidelines.

“The affordable mortgage financing offered by North Dakota Housing Finance Agency provides the extra boost many young families need to be able to get into their first home,” said members of the commission in a joint statement. The Industrial Commission, consisting of Governor Jack Dalrymple as chairman, Agriculture Commissioner Doug Goehring and Attorney General Wayne Stenehjem, oversees the agency.

NDHFA offers first-time buyers below-market interest rate mortgage loans through its FirstHome™ program. Households headed by a single parent or that include a disabled or elderly member or a veteran honorably discharged from active duty may qualify for similar cost savings through the agency’s HomeAccess program. NDHFA also provides down payment and closing cost assistance and supports homebuyer education.

“NDHFA’s loans are offered through a network of lending and real estate partners,” said Jolene Kline, NDHFA executive director. “Together, we have helped more than 38,000 households statewide responsibly and affordably achieve homeownership.”

NDHFA purchased 892 loans, averaging $136,800, in 2013. Sixty-four percent of these borrowers received some form of down payment and/or closing cost assistance.  The agency has provided more than $2.79 billion in mortgage loans since 1982.

For more information on NDHFA homeownership programs, visit the agency’s website at www.ndhfa.org.

Compliance Income Calculations Updated

The North Dakota Housing Finance Agency (NDHFA) has revised the income calculations for its homeownership program compliance.

“These changes will allow many of the households that are just over our income limits to qualify for affordable home financing,” said Dave Flohr, homeownership division director.

Deductions from borrower income are now permitted including allowances for dependents, elderly and disabled household members, child care, disability assistance, medical expenses and unreimbursed business expenses. The agency will no longer require a profit and loss statement for self-employed and business income.

Participating lenders and FirstHome Certified Real Estate Agents should refer to Update No. 14-07 for more details. Questions regarding income calculations can be directed to NDHFA’s loan origination staff.