North Dakota First-Time Home Buyer Guide

Is North Dakota on your radar? You’re not the only one. The best places to live in North Dakota have a lot to offer, with wide-open spaces, friendly neighbors, low crime rates and plenty of outdoor recreational activities. So, it’s no wonder North Dakota is an appealing location for young professionals, families and retirees.

North Dakota is a great place to buy a home because of the low cost of real estate and generally low cost of living. Ready to move to the Peace Garden State? Prepare for your move to the Midwest with our guide on North Dakota’s first-time home buyer programs and loan options.

Who Qualifies As A First-Time Home Buyer In North Dakota?

Every first-time home buyer program has different requirements. In general, someone is considered a first-time home buyer if they haven’t owned a home in the past 3 years. If you’ve owned a home in the past 3 years, but you’re buying a house with a spouse, you can still meet first-time buyer qualifications according to the Department of Housing and Urban Development (HUD).

Important Stats North Dakota First-Time Home Buyers Should Know

If you’re thinking about buying a house in North Dakota, you’ll want to know what you’re getting into. Here are some of the most important statistics for home buyers to know:

There are many benefits to living and buying a house in North Dakota. In general, North Dakota has a very low cost of living, and North Dakota homes for sale are less expensive than many homes in other parts of the country. In fact, according to the American Community Survey (ACS) in 2022, the median home price in North Dakota sat $77,800 below the national median ($320,900). The state also has low personal and business income taxes and several home buyer assistance programs.

North Dakota First-Time Home Buyer Programs

Hoping to take advantage of home buyer assistance programs? Start with some research. The North Dakota Housing Finance Agency (NDHFA) offers several home buyer assistance programs. Each program requires first-time home buyers to do the following:

• Make at least a $500 out-of-pocket cash investment (or down payment)
• Occupy the home as a primary residence

Here are some first-time home buyer programs and their specific requirements.

NDHFA FirstHome Program

The FirstHome program assists home buyers in getting a fixed-rate mortgage. It can be paired with one of several down payment assistance programs.

To qualify for this program, home buyers must meet the following requirements:

• Not have owned a property in the past 3 years
• Meet income and purchase price limits

NDHFA HomeAccess Program

The NDHFA homeownership programs include HomeAccess. This program is similar to FirstHome, but it’s not just for first-time home buyers.

To qualify for this program, home buyers must meet these requirements:

• Be a single parent with at least one dependent child living in the home 50% of the time
• Be the mortgagor or the mortgagor’s spouse who served in the active military, naval or air service and been discharged or released from active duty – not under dishonorable conditions
• Be the mortgagor, mortgagor’s spouse or a dependent(s) who’s permanently disabled or age 65 or older and lives in the home
• Meet income and purchase price limits

NDHFA North Dakota Roots Program

The North Dakota Roots Program is designed to offer moderate-income North Dakotans with a fixed, low-rate mortgage and down payment assistance.

To qualify for this program, home buyers must satisfy these requirements: Comply with the current conforming loan limits or the limits of the applicable loan insurer or guarantor.

There are no income or purchase price limits for this program.

NDHFA Targeted Area Loan Program

The NDHFA Targeted Area Loan Program provides reduced interest rate loans for targeted areas of North Dakota.

To qualify for this program, home buyers must meet the following requirements:

• Purchase a home within one of the targeted Census Tract areas listed on the NDHFA site
• Meet the income and purchase price limit for their area

N.D. First-Time Home Buyer Grants And Down Payment Assistance

The following down payment assistance programs and closing cost assistance are available in North Dakota.

NDHFA Down Payment And Closing Cost Assistance

The NDHFA Down Payment and Closing Cost Assistance (DCA) program offers down payment and closing cost assistance for low-income home buyers. The assistance amount is calculated as 3% of the first mortgage loan amount in the form of a credit toward the out-of-pocket cash requirement.

To qualify for this program, home buyers must satisfy these requirements:

• Make a salary within the income limits
• Purchase a 1- to 2-unit property
• Occupy the home as a full-time residence
• Complete a home buyer education course

NDHFA Start Program

The NDHFA Start Program offers closing cost assistance for low- to moderate-income borrowers. Similar to the DCA program, you can be awarded a credit of 3% of the first loan amount.

To qualify for this program, home buyers must meet the following requirements:

• Purchase a 1- to 2-unit property
• Occupy the home as a full-time residence

Traditional Loans For ND First-Time Home Buyers

Once you determine how much house you can afford, you can start shopping for the right type of mortgage for you. There are several nationwide first-time home buyer loans that may apply to home buyers in North Dakota.

FHA loans

FHA loans are a federal loan program that allows home buyers to secure a mortgage with a 3.5% down payment, assuming that the borrower has a credit score of 580 or higher. This is a great option for home buyers without much savings for a down payment.

FHA loans are also available for people with slightly lower credit scores with a higher down payment.

VA loans

VA loans are available exclusively to qualifying service members, veterans and qualifying surviving spouses. VA loans are available for up to the full value of a home – no down payment is necessary. There is a VA funding fee between 1.25% and 2.15% of the loan value.

VA loans also have some of the lowest closing costs of any loan. This is a great option for qualifying borrowers without a lot of savings for a down payment who may be moving around or just starting out in a permanent location.

USDA loans

USDA loans were created to help encourage home buyers to move to rural areas. These loans can cover 100% of the home’s value – meaning no down payment necessary. However, they’re very limited. The home must be in a designated rural area and the household income cannot exceed 115% of the median income in the area where the home is located.

This loan is a great option if you have a low to medium income and want to buy a home in a rural area. If you’re able to work remotely and looking to move out of the city, this could be an option for you.

First-Time Home Buyer ND: FAQs

Here are some frequently asked questions for first-time home buyers in North Dakota.

What down payment do I need to buy a house in North Dakota?

There are a few programs that offer 0% down payment home loans in North Dakota. Otherwise, you’ll need a 3.5% down payment for an FHA loan. For a conventional loan, many lenders require 3%. But if you put more down, you could secure a better interest rate, and if you put 20% down, you’ll avoid paying for private mortgage insurance. You can also explore down payment grants to help make your down payment more affordable.

What credit score do I need to buy a house in North Dakota?

Each home buyer assistance program has its own credit score requirements. However, in general, the minimum credit score to qualify is 620 for a conventional loan. For other government-backed loans like FHA loans and VA loans, you can qualify with a credit score of 580 with Rocket Mortgage^®. Requirements can vary by lender, even depending on the size of your down payment.

How old is the average home buyer in North Dakota?

A study by the National Association of REALTORS^® showed that North Dakota had the lowest median age of home buyers across the U.S. at 34 years old between 2017 – 2022.

What is the North Dakota Housing Finance Agency?

The NDHFA is a state-run agency that provides financing options for North Dakota low- to moderate-income home buyers. An FHA-approved lender will originate and issue a mortgage, and once it’s finalized, it’s sold to the NDHFA and serviced by the agency.

How can I find an NDHFA-approved lender?

Visit this page on the NDHFA site to find an approved lender.

The Bottom Line

North Dakota is a beautiful place to live if you prefer a slower paced, rural lifestyle and don’t mind long, cold winters. Whether you’re looking for a new adventure or a fresh start, North Dakota might be the perfect place for you. If you’re ready to start your home buying journey, get started on the application for a home loan with Rocket Mortgage today.