First-Time Homebuyer Programs in North Dakota

The down payment on a new home is often the biggest hurdle for first-time homebuyers. With an average home value of $262,706 in North Dakota, you'd need a down payment of $52,541 to avoid buying private mortgage insurance.

First-time homebuyer programs in North Dakota help make homeownership more accessible. Some mortgages let you make a smaller down payment, but they often have income limits and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

North Dakota offers grants and loans to help first-time homebuyers cover down payment and closing costs. We compiled first-time homebuyer programs provided by the North Dakota Housing Finance Agency (NDHFA) to help you find the best option for your needs and situation.

The FirstHome Program offers affordable mortgage options for low to moderate-income first-time homebuyers. It offers competitive interest rates and can be paired with a down payment and closing cost assistance. Loans originate from private lenders and are sold to NDHFA after closing. Eligible property types include single-family homes and manufactured homes on permanent foundations.

The HomeAccess Program offers low-interest mortgage loans to eligible households, including single parents, veterans and families with disabled or elderly members. The program is for home purchases only and can't be used for refinancing. Borrowers can access competitive rates and combine the program with NDHFA assistance for down payments and closing costs.

The North Dakota Roots program provides affordable mortgages to moderate-income buyers who don’t qualify for NDHFA’s FirstHome or HomeAccess programs. It adheres to Fannie Mae/Freddie Mac conforming loan limits but imposes no income or purchase price restrictions, offering flexibility for higher-income homebuyers.

The Down Payment and Closing Cost Assistance (DCA) Program helps low-income first-time homebuyers cover out-of-pocket expenses required by NDHFA loan programs. Up to 3% of the first mortgage amount can be applied toward the down payment, closing costs and prepaid items.

The Start Program offers affordable mortgages to low to moderate-income homebuyers, along with up to 3% of the loan amount in down payment and closing cost assistance. This credit can cover down payments, closing costs and prepaid expenses.

North Dakota offers zero-down-payment loan programs that don't require a down payment when purchasing a home. USDA and VA loans are government-backed loans with this benefit.

USDA loans make homeownership more accessible for those in eligible rural communities. The U.S. Department of Agriculture issues these loans through its Rural Development Guaranteed Housing Loan program.

USDA loans offer several benefits, including no down payment requirement, which reduces upfront costs. They also provide competitive interest rates and flexible credit guidelines, making them great for borrowers with less-than-perfect credit histories.

To qualify for a USDA loan, the property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Income limits vary by location. For instance, in Divide County, North Dakota, the income limit for a four-person, low-income household is $87,850; in Mercer County, North Dakota, it's $90,000.

VA loans from the US Department of Veterans Affairs assist veterans, active-duty service members and eligible surviving spouses in purchasing homes. These loans offer a range of benefits that make homeownership more accessible for those who have served the country.

VA loans come with several advantages, including a no-down payment option. They don't require private mortgage insurance (PMI), reducing monthly payments. VA loans also typically offer lower interest rates than private loans. As of December 2024, the APR for a 15-year fixed-rate VA loan in North Dakota is 6.37%, while a 30-year fixed-rate VA loan has an APR of 6.43%.

Eligibility depends on several factors, including service length or commitment, duty status and character of service. Applicants must also meet location-based income limits and have a valid certificate of eligibility (COE).

First-time homebuyers in North Dakota can access low-down-payment loan programs that allow them to finance their homes with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA and conventional loans are often compared, as they're the most common types of mortgages. FHA loans require at least a 3.5% down payment, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements, making FHA loans more accessible to borrowers with lower credit scores.

As of December 2024, the APR for a 15-year fixed-rate conforming loan in North Dakota is 5.91%. The APR for a 15-year fixed-rate FHA loan is 8.06%. APRs on FHA loans can be higher due to additional fees and costs associated with government-backed loans.

Use our FHA vs. conventional loan calculator below to compare both programs and determine the best option.

We answered frequently asked questions about first-time homebuyer programs in North Dakota to help you determine the best option and move closer to achieving homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in North Dakota to help you with the homebuying process.