Mortgage
How Does LendingTree Get Paid?

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

2022 North Dakota First-Time Homebuyer Programs

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

North Dakota has programs for first-time homebuyers statewide. In this article, we’ll go over these programs and how you can qualify for help in buying your first home. Keep in mind, you may need to remain in your home for a certain number of years to enjoy the full benefits of North Dakota’s first-time homebuyer programs.

North Dakota statewide and local first-time homebuyer programs

To qualify for North Dakota’s first-time homebuyer down payment assistance, you’ll need to take out a first mortgage through the North Dakota Housing Finance Agency. The NDHFA offers several programs with low interest rates for families who meet income and purchase price limits.

Program nameAssistance amountAssistance typeWhere it’s available
FirstHomeUp to a purchase price limit of $311,979 for single-family homesFirst mortgageStatewide
HomeAccessUp to a purchase price limit of $311,979 for single-family homesFirst mortgageStatewide
DCA3% of mortgage amount, up to $24,000Forgivable loanStatewide
Start3% of mortgage amount, up to $24,000Forgivable loanStatewide

What to know about different types of down payment assistance

Down payment assistance for first-time homebuyers can come in several different forms. Both of North Dakota’s programs are structured as forgivable loans. This means that, after a period of time, the loan is wiped away and doesn’t need to be paid back. If you sell the home before that period, you may be responsible for paying back the loan. The North Dakota Housing Finance Agency does not disclose the number of years it takes to get full loan forgiveness. You’ll need to contact a NDHFA lender to find out.

Other types of down payment assistance include:

  • Grants. Grants don’t need to be paid back. Some assistance programs offer grants as a percentage of the purchase price.
  • Second mortgage. Assistance could be in the form of a second loan, on top of your primary mortgage. Some second mortgages for down payment assistance must be paid back in monthly payments starting immediately. Others, often known as “soft seconds,” do not require monthly payments and are only paid back when you sell the home. Some are completely forgivable.

How North Dakota first-time homebuyer programs work

The process of qualifying for a North Dakota first-time homebuyer program is not unlike how you’d get any other mortgage. Keep in mind, you will likely need to remain in the home for a certain number of years to take advantage of the full benefit of the programs.

Step 1: Find a participating lender and pre-qualify

Only lenders approved by the North Dakota Housing Finance Agency are able to issue mortgages that qualify you for down payment assistance. You’ll need to get your first mortgage through a NDHFA program in order to qualify for the forgivable loan. Your loan officer will be able to tell you which programs you qualify for, let you know all of the terms and conditions, and guide you through the process of applying for the loan.

You can find a list of NDHFA lenders on the agency’s website. It may be worthwhile to contact multiple lenders from this list to get pre-qualified for a loan. This way, you can evaluate the loan offers you receive and find the best deal based on interest rates and fees. Even a small difference in interest rate can equate to thousands of dollars in savings over the life of a 30-year loan.

Step 2: Take a homebuyer education course

To qualify for down payment assistance, you’ll need to complete a homebuyer education course approved by the North Dakota Housing Finance Agency. Courses are available online or in-person. Some of the courses charge a fee, while others are free.

Step 3: Consider hiring a real estate agent

Your prequalification will let you know the price range you can afford. A real estate agent can help you find homes in this range and guide you through the process of making an offer and going under contract on your future new home. The North Dakota Housing Finance Agency has a database of “FirstHome Certified” agents, meaning they have been trained in the state’s first-time homebuyer programs and are up to speed on the latest updates in these programs.

Step 4: Finalize your loan application and close on the loan

With a purchase contract in hand, you can finish up your mortgage application with your NDHFA lender. Your loan officer will guide you through all of the documentation you must provide. Even with down payment assistance, you will need to contribute at least $500 of your own cash toward the purchase of your home.

After you close on the loan, your lender will sell the loan to the NDHFA. You’ll make your monthly mortgage payments either to your lender or directly to the NDHFA.

North Dakota first-time homebuyer program requirements

The North Dakota Housing Finance Agency does not provide many details about its assistance programs online. You’ll need to contact your lender to find out the current terms and conditions regarding credit score and other requirements.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
FirstHomeNot disclosedNot disclosedVaries by county and family size; ranges from $103,615 to $117,530 for a family of threeNot disclosed
HomeAccessNot disclosedNot disclosedVaries by county and family size; ranges from $103,615 to $117,530 for a family of three
DCANot disclosed, set by lendersNot disclosedVaries by county and family size; ranges from $68,650 to $79,900 for a family of fourNot disclosed
StartNot disclosed, set by lendersNot disclosedVaries by county and family size; ranges from $103,615 to $117,530 for a family of three or moreNot disclosed

THINGS YOU SHOULD KNOW

Many first-time homebuyer programs have income limits, particularly in order to qualify for down payment and closing cost assistance. These limits are often based on the area median income for the county in which you buy a home and are often set at 80% of the area median income. You can look up your area’s median income with the U.S. Department of Housing and Urban Development’s lookup tool.

National first-time homebuyer programs

To qualify for a first-time homebuyer program, you often have to qualify for a traditional loan program as well. These loan programs aren’t exclusive to first-time buyers, but often serve as the foundation of the first mortgage you’ll need for down payment and closing cost assistance. In North Dakota, the first mortgage you’ll take out must be one of the below.

Conventional loans. A conventional loan is not part of any government program. Conventional loans often require a down payment of as little as 3% before assistance, and you often need a credit score of at least 620 to qualify. If you make below a 20% down payment, you generally need to pay for private mortgage insurance (PMI).

FHA loans. FHA loans are insured by the Federal Housing Administration and offer more lenient qualifying criteria than conventional loans, making them a popular choice for first-time buyers. You can qualify for an FHA loan with a credit score as low as 500, if you can make a 10% down payment. With a credit score of 580 or higher, you can make a down payment as low as 3.5% before assistance.

VA loans. These loans are a benefit for military servicemembers and veterans, and allow you to buy a home with no down payment. There’s also no set minimum credit score for a VA loan; instead, lenders will evaluate your entire financial situation to determine whether you can afford to pay back the loan.

USDA loans. USDA loans also do not require a down payment, and are available to low- and moderate-income families buying homes in rural areas. Income limits apply.

FAQs about North Dakota’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in North Dakota?

A first-time homebuyer is defined by the U.S. Department of Housing and Urban Development as someone who has not owned an interest in their primary home in the previous three years before closing on their new home. People who only owned a home with a former spouse may still qualify, as do people who owned a mobile home.

Can I qualify for down payment assistance in North Dakota?

In general, you’ll need to do the following to qualify for down payment assistance in North Dakota:

  • Meet income limits, which can vary by family size and county.
  • Purchase a single-family home or two-unit property.
  • Live in the home as your primary residence.
  • Take a homebuyer education course.

How much of a down payment do I need to buy a house in North Dakota?

Down payment assistance in North Dakota can provide 3% of the purchase price of your new home, which is enough to qualify for many conventional loans. You will need to contribute at least $500 of your own money toward the purchase.

Home price trends in North Dakota’s major areas

Median home prices in every county in North Dakota are under $350,000, and are below $150,000 in many parts of the state, according to data from the National Association of Realtors. Prices in North Dakota are rising much more slowly than in other parts of the county, at under 3% appreciation in the past year, according to the NAR data.

In Cass County, home to North Dakota’s largest city of Fargo, the median home price is $261,407 — up about 5% over the past year. This translates to a monthly mortgage payment of about $992 on a 30-year loan, up from $971 year over year.

 

Today's Mortgage Rates

  • 5.34%
  • 4.55%
  • 3.31%
Calculate Payment
Advertising Disclosures Terms & Conditions apply. NMLS#1136

Featured Articles