North Dakota Housing Finance Agency requests $40M for Housing Incentive Fund, transfer of homeless grant and five staff additions

Dave Flor, executive director of the North Dakota Housing Finance Agency, told the Appropriations - Education and Environment Division on Jan. 15, 2025, that the agency is requesting additional capital for the Housing Incentive Fund (HIF), transfer and administrative consolidation of the state homeless grant into HIF, and five additional staff positions to handle increased program volume.

Flor cited an updated housing needs assessment from North Dakota State University that projects up to 20,000 new housing units needed statewide in 2025–27 if current demographic and household formation patterns continue. He said the agency’s request to the legislature includes $40,000,000 for HIF and $10,000,000 for the North Dakota Homeless Grant (the agency proposed moving homeless grant funds into HIF for administrative efficiency while keeping the dollars segregated and accountable).

Flor described the agency’s homeownership programs: the first‑time homebuyer program (bond‑funded) and the North Dakota Roots program for non‑first‑time homebuyers. The agency reported it purchased roughly $500,000,000 in loans in the previous year, that it currently services about 13,400 loans, and that servicing workload is approximately 1,000 loans per FTE versus a Mortgage Bankers Association industry guideline of about 835 loans per FTE. Based on that ratio the agency said it is short roughly three servicing positions and is requesting five total new FTEs across acquisition, servicing and program management if HIF/homeless appropriations increase.

Flor said HIF and other multifamily programs are oversubscribed: the agency reported about $362,000,000 committed in 115 infrastructure revolving loan fund loans to 71 communities and $527,000,000 committed in 65 school construction loans to 53 districts (figures through Dec. 31, 2023). He said the homeless programs that moved into the agency this biennium are oversubscribed by roughly $6,500,000 and multifamily/state programs by about $46,500,000 for the current biennium.

On homeownership limits, Flor said the program follows IRS rules for tax‑exempt mortgage bonds; income limits and purchase price caps apply and vary by county and household size. He noted a recent ceiling on purchase price limits near about $465,000 and the highest household income limits around $120,000, depending on county and family size. The agency noted sensitivity to insurance cost and deductible changes and said it monitors such changes for potential program adjustments.

Flor asked the committee to consider statutory appropriation language to allow the agency to continue purchasing loans and cover servicing release premiums if volumes increase; the agency noted that those servicing release premiums are paid from agency revenue and can vary with market conditions. No formal vote was taken; the committee indicated further consideration and scheduled a separate hearing (Senate Bill 202030, including housing/homeless provisions) for follow‑up.

Ending: Agency requested funding and staffing to respond to projected housing demand; committee planned a bill hearing on the broader housing and homeless bill and will continue review during bill and budget hearings.