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Housing Finance Agency reports jump in loan purchases, asks for servicing staff as portfolio grows
Summary
Dave Flor and staff told the House Appropriations Government Operations section that the North Dakota Housing Finance Agency purchased roughly $480 million in mortgage loans last year and now services a growing portfolio that is heavily FHA‑insured; the agency asked for two additional FTEs to handle servicing and bond accounting work.
Dave Flor, executive director of the North Dakota Housing Finance Agency, told the committee that the agency is self‑funded (aside from two grant lines noted in testimony) and uses mortgage revenue bonds to buy loans from participating lenders statewide. He said the HFA purchased about $480 million in loans and roughly 2,000 loans in the prior year, and that the agency annually purchases about 20 percent of home loans originated in North Dakota.
Brandon Delof, the agency’s homeownership division director, explained that mortgage revenue bonds allow the agency to offer interest rates typically 25 to 50 basis points below market; he told the committee the agency’s loans save borrowers an estimated $180 a month on average compared with market rates last year and that the HFA’s lower rates, plus down‑payment assistance (3 percent of mortgage amount available in certain products), can be decisive for first‑time buyers.
Delof described operational pressure from rapid growth. He told the committee the servicing department — which he said is located in Bismarck and employs 14 people — processed a large volume of documents last year and that the industry benchmark from the Mortgage Bankers Association is about 835 loans per servicing FTE; testimony stated the agency’s current loans‑per‑FTE figure as 54 and that the servicing group reviews thousands of documents per employee per day during peak periods. He said the HFA has added four payment‑specialist roles to meet evolving FHA reporting and compliance requirements and that roughly 60 percent of the HFA’s portfolio is FHA insured, increasing federal compliance obligations.
On staffing, the agency asked for two ongoing FTEs funded from agency earnings: one servicing specialist and one senior bond accountant (the senate included an additional position elsewhere in the agency’s Senate package). Delof told the committee that without added servicing capacity the agency could be forced to limit funding, reduce income limits, or otherwise restrict program access. He said the agency is not asking for general fund dollars for these positions.
Why it matters: the HFA supports first‑time homebuyers and affordable housing across the state; its servicing work affects borrower outcomes and the state’s reputation with bond investors. Committee members asked about delinquency and foreclosure metrics; the agency presented data showing foreclosure rates below comparable benchmarks and described an elevated compliance burden tied to FHA servicing standards.
Flor and Delof also summarized a housing‑needs update done with North Dakota State University projecting demand for as many as 20,000 housing units through 2027, with growth concentrated among younger households and a significant projected increase in the 65+ population, which staff said informs program priorities for single‑family, rental and aging‑in‑place housing.
