Homeownership Program Reaches $2B Milestone

Homeownership Program Reaches $2B Milestone

BISMARCK, ND – September 8, 2008 – (RealEstateRama) — The North Dakota Housing Finance Agency (NDHFA) announced today that it has reached a milestone, having purchased $2 billion worth of FirstHome™ mortgages.

“With interest rates that are lower than the conventional market place, and our down payment and closing cost assistance, for 26 years North Dakota Housing has provided the boost that many young families needed to be able to achieve their homeownership goal,” said Mike Anderson, NDHFA executive director.

NDHFA reached its first billion dollar homeownership program milestone in the fall of 2000. The purchase of the second billion dollars worth of loans took less than half that time.

“Since our first bond sale in 1982, North Dakota Housing has played a key role in the home purchases of families statewide,” said Dave Flohr, NDHFA homeownership division director “Our fixed rate financing offers borrowers a stable product that is particularly desirable with the present state of the national housing market.”

Because NDHFA is a state agency, it must partner with private sector lenders to originate the FirstHome loans. The participating lenders then sell the mortgages to the Agency. NDHFA is currently averaging 170 loan purchases per month, a pace 10 percent higher than in 2007. The prior year was record setting for the Agency with 1,733 mortgages purchased. The average loan purchased by NDHFA thus far in 2008 has been just shy of $105,000.

“North Dakota Housing’s homeownership programs strengthen our state’s economy and provides borrowers with financial stability,” said Anderson. “For many families, owning a home is their primary means of wealth accumulation.”

More than 32,000 North Dakota households have achieved homeownership with NDHFA’s assistance. The average borrower realizes an interest savings of more than $50 per month by using the FirstHome program.

Sixty-two percent of the Agency’s borrowers receive some form of down payment and closing cost assistance. The most common option utilized is NDHFA’s Start program which provides borrowers with an affordable first mortgage and additional help with out-of-pocket cash requirements.

The FirstHome program does not utilize any taxpayer funds. To raise the capital for the program, NDHFA sells Mortgage Revenue Bonds. The Agency’s first bond issuance in 1982 allowed 32 local lending institutions to offer loans at a rate of 13.5 percent while conventional rates hovered around 17 percent. Currently, more than 80 lenders statewide partner with the Agency to offer 30- and 40-year fixed rate mortgages at an interest rate around six percent.

For more information on the homeownership programs, down payment and closing cost assistance or homebuyer education, contact an NDHFA participating lender.

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