Long stretches of prairieland, agriculture so vast it earned the nickname “the breadbasket of the nation,” and a melting pot of cultures resulting in amazing cuisines and traditions. It’s no wonder North Dakota is called the Legendary State.
Midwesterners in this state are also treated to some of the lowest taxes while ranking high in quality of life compared to the rest of the country. Families have access to stunning national parks at their doorstep, some of the lowest unemployment rates, and a sense of neighborly community. Are you sold yet?
If you’re a first-time homebuyer ready to set down roots in North Dakota, you’re in luck. You have a helping hand throughout the homebuying process via statewide and local homebuyer programs, which will help you with big ticket items, such as securing a low interest rate home loan to providing the financial boost you need to afford your down payment and closing costs.
Read on to learn more about these programs, their eligibility requirements and how to apply.
Who Qualifies as a First-Time Homebuyer in North Dakota?
For a quick clarification, a first-time homebuyer in North Dakota is defined as any family or individual who has never owned a home, or at least not in the past three years depending on the region. State and local programs, for example, suggest residents are still eligible if they haven’t owned a home in the past three years or longer. It’s worth waiting it out if you’re nearing the three-year mark because these programs provide a significant financial boost.
As always, when you’re doing your research, read the fine print and any limitations we list below.
Statewide Homeownership Assistance Programs
Every state has its official housing authority that offers a series of homebuyer programs to help residents with buying a home. The North Dakota Housing Finance Agency has a slate of homebuyer assistance programs for first-timers and repeat homebuyers.
Here’s a closer look at each program’s details, how to apply as well as the fine print.
NDHFA First Home Program
First Home is the NDHFA’s flagship program, earmarked especially for first-time homebuyers and anyone who hasn’t owned a home in the past three years. Note: manufactured homes built on a non-permanent foundation do not qualify.
The program provides homebuyers with below-market interest rate home loans to help low- and middle-income homebuyers secure a mortgage at a competitive rate.
All single-family homes, manufactured homes built on a permanent foundation, approved condominiums and multifamily properties are fair game under this program as long as the home is used as your primary residence.
To be eligible, you must have a credit score of 620, a minimum of $500 in cash to contribute to the purchase price of your home, and you must meet income and purchase price limits according to your county. For all new construction homes, for example, a single family’s income must not exceed $294,000 regardless of the county of residence.
To get started, you must work with a participating lender who will handle your application and any underwriting details. You have dozens of options to choose from across the state.
Check out the full details for the First Home program on its official webpage.
NDHFA Home Access Program
Have you previously owned a home but you need a helping hand with your next purchase?
The NDHFA runs the Home Access program for a segment of North Dakotans, including: single parents with at least one dependent child living with them 50 percent of the time, spouses with a partner who is active in the military, or has been honorably discharged, and spouses with a partner who is permanently disabled or 65 and older.
The program aims to help these people with homebuyer assistance, from securing a below-market home loan to make sure they have lower mortgage payments to providing them with down payment and closing costs assistance.
This program follows the same rules that apply to the First Home program.
To be eligible, you must have a credit score of 620, a minimum of $500 in cash to contribute to the purchase price of your home, and you must meet income and purchase price limits according to your county. You also must work with a participating lender who will handle your application and any underwriting details.
You can read more about the Home Access program here.
NDHFA Down Payment and Closing Cost Assistance
Most states pair their home loan programs with generous down payment and closing cost assistance to help homebuyers with their lump sum payment. For the NDHFA, it’s their DCA program.
The DCA provides a loan – or second mortgage – that’s equal to three percent of your total mortgage. During the first eight years of your mortgage, the loan must be repaid at a prorated amount if you decide to sell, refinance or stop using the home as your primary residence. At the end of the eight-year mark, if you’re still living in the house and keeping up with your mortgage payments, your second mortgage is completely forgiven.
This is a great incentive to stay in your home for the long run, at least for eight years.
To be eligible, you must first secure an NDHFA home loan and stick to the income and purchase price limits according to your county. You’ll also need to complete a homebuyers’ education course, which the NDHFA provides online via eHome America and F-M Homebuyer classes so you have flexibility in your options.
Keep in mind, the DCA program cannot be used in conjunction with other down payment assistance programs. If your city or county runs a program of its own, you can decide which is more beneficial to you.
Your home also cannot be located within a 100-year flood plain.
Check out the full details for the Down Payment and Closing Cost Assistance program here.
NDHFA North Dakota Roots Program
With the Roots program, North Dakotan homebuyers have two options: to secure a below market interest rate home loan, or a market rate loan that’s paired with down payment and closing costs financial assistance (DCA).
In this case, the program is open to repeat homebuyers so anyone who has owned a home – even in the last three years – can apply for this homebuyer assistance.
It’s up to homebuyers to do the number-crunching to decide which of the two is the right choice for their bottom line. In some cases, they may need the financial boost right away, making the DCA help more useful.
Just make sure you stick to the same eligibility criteria, including income and purchase price limits, a healthy credit score, and adding at least $500 of your own funds into your home purchase.
Read more about the Roots program.
NDHFA Targeted Area Loans Program
It’s worth looking into whether the home you’ve been eyeing falls under a targeted area in North Dakota according to the NDHFA.
The U.S. Internal Revenue Code requires that the NDHFA, as an issuer or tax-exempt mortgage revenue bonds, sets aside a certain number of homes for lower-income families. It doesn’t matter if you’re a first-time or a repeat homebuyer – the focus is on helping low-income families get the keys to their home in these targeted areas.
To determine if your home is in a targeted area, search by address on the NDHFA website. The counties of Benson, McKenzie, Rolette and Sioux are among those on the targeted area list.
If your home is in a targeted area, and you meet income and purchase price limits, the NDHFA will assist you in your purchase via securing a low interest rate mortgage and down payment and closing cost assistance.
Read more about the Targeted Area Loans program here.
Homebuyer Programs by Location in North Dakota
While the statewide programs listed above can give you a leg up on your journey to homeownership, there are local homebuyer assistance programs across North Dakota worth researching.
Learn more from reading our list of local programs.
Across North Dakota
While it isn’t affiliated with the North Dakota Housing Finance Authority, the Lewis and Clark Development Group operates the Dream Fund, which is available to residents across the state. Lewis and Clark is an organization dedicated to expanding affordable housing and community development throughout North Dakota and into areas of South Dakota.
Dream is an acronym outlining the types of loans homebuyers are eligible for: Down payment and closing costs, Rehabilitation expenses, Emergency repairs, And other housing loans, including constructing a ramp or other accessibility upgrades, and Mortgage assistance.
The Dream Fund only steps in to offer financing if families can’t secure home financing via traditional lenders like banks. It also provides second mortgages to people who have home loans but need help with coming up with their lump sum down payment. So whether your home is a fixer-upper or you need to find an alternative way to lock in a mortgage, the Dream program has you covered.
Interest rates and terms are structured so that total payments are affordable and flexible for the homebuyer. They’re usually set at market rate or lower.
To be eligible homebuyers need to live within the state of North Dakota and their property must be owner occupied within 60 days of loan closing except in the case of construction financing. Mobile homes that aren’t fixed to a permanent foundation do not qualify.
Read all about the Lewis and Clark Development Group’s Dream program here.
Families ready to call the capital city of North Dakota home should keep Bismarck’s Community Action Partnership in their back pocket.
The non-profit runs a string of programs designed help local residents – from providing assistive equipment like walkers, canes, crutches and wheelchairs for seniors, to providing backpacks, warm lunches and school supplies for kids.
For homeowners, the Community Action Partnership has programs that include accessibility assistance, providing funding to help low-income households with a disabled family member get the funds to make renovations like wheelchair ramps, walk-in showers, and grab bars throughout their property.
There is also an energy efficiency program, providing funding to low-income families so they can make their home more energy efficient and reduce their heating and cooling bills. The funding covers everything from insulation and caulking to weatherstripping and upgrading appliances like refrigerators and washing machines.
Finally, there is the HOME Rehabilitation program, which helps single-family, low-income households with bringing their home up to housing quality standards so their home is safe and sanitary.
If you’re moving into a fixer-upper and you need a hand with any of the above, check out the Community Action Partnership’s list of programs.
Homebuyers keen to buy a new build in Fargo – including West Fargo – can cash in on tax incentives set up specifically for buyers of newly constructed homes.
With the Home Builders Association of Fargo-Moorhead, a non-profit trade organization, homebuyers can save up to $4,000 on their property tax bill when they buy a newly built home in Fargo or West Fargo.
Homeowners also get an exemption of up to $150,000 off their property valuation for two taxable years following the year the home was sold.
These incentives are available on all newly constructed single-family homes, townhomes and condominiums. They’re only available to the first owner who resides on the property.
Read more about these incentives on the Home Builders Association of Fargo-Moorhead website.
The city of Grafton is running a Grow Grafton Housing Incentive, offering homebuyers a $20,000 grant if they buy or build a newly-constructed single-family home, townhouse or condo on any lot within Grafton city limits.
You can even apply for a $10,000 grant if you relocate an existing single-family home into Grafton.
To sweeten the pot, homeowners are also eligible for a two-year $150,000 tax exemption, and water and sewer hookup fees will be waived, as well.
The tax exemption begins post construction, as long as you don’t have any delinquent property taxes. It’s worth noting that the builder can also obtain a tax exemption of up to three years, starting when construction begins – as long as the property is owned by the builder and remains unoccupied.
Read more about the Grow Grafton Housing Incentive.
Homebuyers zeroing in on Grand Forks can connect with the Red River Community Action Group, which operates two programs.
Home Rehab helps low-income homeowners with all forms of home renovations, including electrical, plumbing, heating, siding, foundation and roofing. Meanwhile the organization’s Home Cents program offers low-interest loans for home repairs.
Loans are available only to low- and moderate-income households. Your home must be at least 15 years old and located within Grand Forks city limits.
You can read more about both programs on the Red River Community Action Group’s website.
The city of Jamestown also runs its own Community Action Partnership, nearly identical to the one in Bismarck. In Jamestown, homebuyers can take advantage of weatherization programs that include providing furnace repair and replacement, upgrading cooling systems, and making renovations. These services and funding are all provided on the house for eligible low-income households.
The city also provides financial counselling for homebuyers about to embark on the homeownership process.
Check out the slate of programs on offer from the Jamestown Community Action Partnership.
If you’re thinking of setting down roots in Minot, the North Dakota Housing Finance Agency runs a city-specific program called the Resilient Homebuyer Program exclusive to Minot residents.
It applies to Minot residents whose homes were damaged by the 2011 Souris River Flood or whose homes are being bought out for flood protection. If these situations apply, the NDHFA will provide you with an affordable mortgage loan and up to $60,000 in purchase assistance for your new home purchase.
To qualify, you must purchase a single-family home within Minot city limits that is outside of the 100-year floodplain and within a qualified Resilient Neighborhood as designated by the NDHFA.
Ready to Buy a Home in North Dakota?
Whether you’re shopping for a home in busier cities like Fargo, Bismarck or Grand Forks or you’d rather settle down in small towns where everybody knows your name like Tioga, Park River or Thompson, there is no shortage of housing options in North Dakota.
The real estate market in the Peace Garden State is varied – you can find bachelor pads, single-family homes to multi-family condos and townhomes. The price is right too: you can buy homes for as low as $185,471 right up to $745,000 for immaculate homes along the Missouri River.
And wherever you decide to hunker down, there are multiple programs to help you secure your home purchase.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.