Down Payment Assistance Programs for First-Time Homebuyers in North Dakota

North Dakota provides a unique blend of natural beauty, outdoor adventures, and cultural heritage. Known as “The Peace Garden State”, tourists are treated to its stunning landscapes such as the Theodore Roosevelt National Park, rugged Badlands, and the serene shores of Lake Sakakawea.

Getting a residency in North Dakota may seem a riveting aspect but be reminded that the housing sector is hit by crisis with the sector getting marred by high mortgage rates, limited inventory, and rising prices. These factors have made homeownership difficult especially for first-timers. The median home sale saw a 5.1%  year-over-year increase, taking the house prices to around $270,000 in September 2023.

Many individuals are facing problems in savings to pay for down payments but state-sponsored assistance programs have been the game-changers that cover costs that alleviate financial burdens and make homeownership more accessible for those struggling to afford the rising costs in the state.

Looking for Assistance in a Specific Part of North Dakota?

The average down payment for a home purchase in North Dakota is around $23,000 according to the the state’s median home price of $389,000. This substantial upfront cost can take a toll on first-time and low-income homebuyers’ finances in the state.

North Dakota Housing Finance Agency (NDHFA) along with other entities are providing relief to homebuyers with their assistance programs which can be accessed throughout the region. This shall take a deep dive into the down payment assistance initiatives, their types, sponsors, limits, and the criteria for eligibility.

Down Payment Assistance in North Dakota

Down payment assistance programs (DPA) are designed to help homebuyers, particularly first-time buyers and low-to-moderate-income individuals in North Dakota. They cover the upfront costs associated with purchasing a home which turns the dream of being a homeowner a reality. Here’s a detailed overview of these initiatives.

Downpayment and Closing Cost Assistance Program

Downpayment and Closing Cost Assistance Program provides financial assistance that helps low-income homebuyers manage the upfront and out-of-pocket cash requirements such as down payments, closing costs, and prepaid items.

Fundamentals

• Assistance Type: Credit
• Sponsor: North Dakota Housing Finance Agency
• Assistance Amount: 3% of their first mortgage loan

Eligibility Requirements

• The Applicant must be a first-Time Homebuyer i.e. they have not owned a home as their principal residence in the last three years.
• The Applicant should have their first mortgage secured from NDHFA
• The Applicant should contribute at least $500 from their own pocket.
• Borrowers must meet normal credit underwriting standards.
• Purchased property should only be a one or two-unit with at least one unit being occupied by the applicant.
• The Applicant should complete a homebuyer education course

Start Program

The Start Program is an initiative aimed at helping new and returning residents of North Dakota in achieving their goal of homeownership. 

• Assistance Type: Zero-interest, deferred payment loan
• Sponsor: North Dakota Housing Finance Agency
• Assistance Amount: 3% of the first mortgage loan amount

Eligibility Requirement

• The applicant must be a first-time homebuyer, meaning they have not purchased a property or made it its primary residence in the past three years and have not owned a home as their principal residence within the last three years.
• The applicant should have a minimum credit score which is usually around 620.
• The applicant has to complete a homebuyer education course and provide a certificate of completion dated before the loan closing.
• The applicant should be an owner of a one- or two-unit property which will serve as the borrower’s primary residence.

North Dakota Down Payment Assistance Program FAQs

What types of down payment assistance programs are available in North Dakota?

North Dakota offers several down payment assistance programs the Downpayment and Closing Cost Assistance Program, and the Start Program to name a few. These initiatives provide financial assistance for down payments and closing costs to help first-time homeowners.

How much assistance can I receive from these programs?

The DCA Program provides up to 3% of the total purchase price whereas the Start Program covers up to 3% of the first mortgage amount for down payment and closing costs.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.