If you’re struggling to afford a home in North Dakota, you’re not alone. A 2017 study by Harvard showed that 40 million Americans are living in homes they can’t afford or can’t afford to own a home at all.
Even if you can afford the initial cost of purchasing a home, it’s often impossible to take on the additional costs and financial responsibilities that come with homeownership.
The dream of homeownership is held by many, and it’s a dream that should be accessible to all. That’s why federal and state programs in the US and North Dakota exist to help low-income and first-time home buyers afford a home.
Here’s an overview of some of the best programs and grants designed to help you be able to overcome the barriers to homeownership and help you find the home of your dreams.
Best North Dakota Loans and Grants for Low-Income Home Buyers
North Dakota has a few popular low-income and first-time buyer programs to help you make the leap into homeownership. Here are just a few of the programs that you might be able to benefit from.
The North Dakota Housing Finance Agency (NDHFA) helps with down payment and closing cost assistance. They work to find affordable mortgage loans, offer home buyer education, and provide loans that won’t penalize you for pre-payment.
The NDHFA partners with various lenders to help finance a wide range of homeownership and home buying costs. Most people won’t have to pay a recapture tax, either, and those who do will likely have the option to have it reimbursed.
Even if you have a poor credit score, it’s not an automatic disqualifier. Most NDHFA-partnered lenders will work with you and try to find an option that will help you achieve homeownership.
USDA Rural Development Program
The United States Department of Agriculture (USDA) might seem like a strange organization to pair with home loans, but it makes a lot of sense. The areas of the US that are prime for agricultural development will go to waste if there’s nobody there to work the land and support the community through revenue and taxes.
To that end, the USDA sponsors a Rural Development Program that aims to build up rural communities by offering assistance to those willing to live in rural areas of the state.
This loan, therefore, applies only to certain locations. But if you don’t mind living in a rural area, there are many benefits to be gained.
First, you don’t have to furnish a down payment, which can be a huge roadblock to homeownership for many low-income and first-time home buyers. Secondly, you can wrap your closing costs into the offer so that you don’t have to pay anything at closing, which is the second largest hurdle for low-income buyers.
Removing these two lump sum payments from the equation means that more people can afford a home.
The only possible drawback is that there is a minimum credit score requirement of 640. However, meeting with a lender is still a good idea because they might be able to work with you.
Additionally, your real estate agent should be able to tell you whether or not you have a shot at obtaining this loan. If you do, and quiet country living with fresh air and open fields are your thing, you could be closer to homeownership than you know.
Best Federal Mortgage Options for Low-Income Buyers
On the federal level, there are many programs available for first-time and low-income buyers. These programs can help with general costs or with specific aspects of the home buying process. Here are a few options you might want to consider.
FHA’s 203K Renovation Loan
For some low-income and first-time home buyers, purchasing foreclosures or fixer-uppers is a great entry point to homeownership. The challenge arises in the repair costs associated with making certain foreclosed properties livable.
Again, even in a situation like this where the initial purchase is feasible, the repair costs and other associated expenses often add yet another barrier to homeownership.
That’s where the Federal Housing Authority (FHA) steps in with their 203K Renovation Loan. This loan offers renovation help for renovation costs between $5,000 and $30,000. There are certain qualifications you have to meet, but so long as you meet them, you could be well on your way to homeownership.
HUD First Time Home Buyer Programs
The Department of Housing and Urban Development (HUD) offers a variety of loans, grants, and funding options for those who are in a variety of financial situations and stages of the home buying process.
To determine which HUD loan would be best for you, talk to your local lender and explain your current situation. They will be able to help you determine the best fit.
Additionally, ask your real estate agent if they have any advice. They walk people through the home buying process all the time, so they should be able to let you know what people in a similar situation have done before.
Learn More: The Complete Guide to FHA Loans By State
Best Private Lender Programs in North Dakota for Low-Income Buyers
While there are many federal and state lender programs for low-income buyers in North Dakota, there are also some great private lender programs, as well. Fannie Mae and Freddie Mac can help remove some of the traditional barriers to homeownership, and because they’re private institutions, they don’t have some of the barriers that federal and state programs do.
These private programs are good for those with low to moderate income who have limited cash available for down payments and a minimum credit score of 620. Another perk to these programs is that you can cancel your mortgage insurance once your home equity reaches 20%, which can help immensely down the road in cost savings.
Additionally, you can also obtain immediate appraisal orders from lenders, and almost all private lender programs are free from geographic restrictions. If you haven’t found an option that works for you in the federal and state sectors, try looking at private lenders instead.
Here’s one example of a private lending program.
HomeReady HomePath Mortgage by Fannie Mae
In order to qualify for this loan, you’ll have to take a required home buyer education course. However, if you’re okay with that and you qualify, you’ll be able to obtain 3% toward closing costs on a mortgage loan. You’ll also only be required to pay a 3% down payment, which is less than most FHA loans.
Home Buyer Rebates
North Dakota now allows home buyers to receive rebates, which was previously not allowed. First-time home buyers who are currently evaluating their financial options should connect with a top-rated local real estate agent for guidance when it comes to choosing a lender and a mortgage type.
Experienced real estate agents can also guide you through the entire home buying process. Working with an agent can help you uncover cost savings by accurately timing the market, conduct property evaluations, negotiate for the best terms, and tap into your agent’s professional network.
Your agent can be your advocate and help you achieve the dream of homeownership.
Clever’s Home Buyer Rebate program is an additional cost savings opportunity. Clever buyers who spend $150,000 or more are eligible for a $1,000 rebate to put towards closing costs. Contact Clever and get started today.
Learn More: How to Get a Home Buyer Rebate