NDHFA Downpayment and Closing Cost Assistance Program

In addition to providing low-income families with affordable mortgage loans, the North Dakota Housing Finance Agency (NDHFA) offers individuals the Downpayment and Closing Cost Assistance (DCA) Program. With this program, the NDHFA aims to help low-income, first-time homebuyers meet their out-of-pocket cash requirements.

The purpose of this program is to make funds available to eligible applicants who are interested in purchasing a home but need financial help to pay the upfront costs, which include the down payment, as well as the closing costs and prepaid items required to obtain homeownership. These expenses can add up to a substantial amount, and the inability to pay it might keep people stuck in a renters trap.

Available Assistance
The DCA Program provides income-eligible applicants up to 3 percent of the total purchase price, or $3,000 in assistance funds, whichever is greater. These funds come in the form of a zero-interest, deferred payment loan. DCA cannot be used in conjunction with other down payment assistance programs.

Eligibility Requirements
All DCA Program applicants must meet certain requirements to be considered eligible for assistance. Only first-time homebuyers can qualify for the program; those who have owned a home in the last three years are not eligible. They must secure their first mortgage from NDHFA, and contribute at least $500 from their own cash assets. Borrowers must meet the program's income limits, which vary based on county and family size, and they should meet the normal credit underwriting standards.

Homebuyer Education
Participants are also responsible for completing a homebuyer education course; the certificate of completion must be dated before loan closing.

Property Guidelines
Any property being purchased must serve as the borrower’s primary residence, and fall within the program’s purchase price limits. Homes located within a 100-year floodplain are not eligible.

Seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, but States and Local government agencies are still permitted to help borrowers finance their homes with second mortgages and grants. These agencies set different requirements that a borrower needs to meet in order to qualify for the grant programs, such as property location, and purchase price and income limits.