North Dakota Roots Breaks Record; Program Revenue Supports Affordable Housing

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BISMARCK, ND – One year after North Dakota Housing Finance Agency’s (NDHFA) residential real estate lending capacity was expanded by the state legislature, the agency reports that an updated loan program has broken a record.

During the 2021 legislative session, in anticipation of Bank of North Dakota (BND) transitioning the servicing and origination of its residential loan program to NDHFA, the agency was provided with the same lending authority as the bank. In response, NDHFA updated its North Dakota Roots (Roots) program by removing the cap on borrower income limits and allowing the refinancing of residential loans.

“Many of the Roots loans sold to North Dakota Housing Finance Agency since the transition could have been placed elsewhere. Lenders we speak with like our program for ease of use and service provided,” said David A. Flohr, the agency’s executive director.”

With more than four months remaining in 2022, NDHFA reports that the expanded program has already broken a record. As of Aug. 15, the agency has purchased 261 Roots loans valued at almost $69 million. The average loan is just over $266,000. Prior to the update, the greatest number of Roots loans funded in a year was 257 in 2019.

After a very busy spring, the program is currently experiencing more normal activity. “Roots activity slowed towards the end of the second quarter of the year as interest rates rose,” said Flohr. “An increase of 2% from the beginning of the year to now has resulted in a monthly payment increase of $500 in interest on a $300,000 loan.”

Through its FirstHome™ program, NDHFA provides affordable mortgage loans and down payment and closing cost assistance to low- to moderate-income households. Prior to the legislative change, NDHFA was limited to serving households with an income of up to 200% of the area median and Roots program users were primarily first-time buyers whose income either exceeded its standard program’s income limits or they were borrowers who had owned residential property within the preceding three years.

The increased Roots activity is providing NDHFA with additional income that the agency uses to fund its affordable housing programs.

“Offering this service not only fills a critical lending need in rural areas, it also provides North Dakota Housing Finance Agency with revenue to fund programs that help lower-income households who are aging and/or who have disabilities to continue to live independently. It also funds programs that help North Dakota communities to better understand and address their unique housing needs,” said Flohr.

NDHFA and BND began meeting in 2019 to discuss ways to implement a directive from Gov. Burgum to increase efficiency in state government. They took the first steps toward consolidating the roles they play as state agencies in financing residential real estate in April 2021 when BND transferred the servicing of more than 2,000 loans valued at $500 million to NDHFA. BND discontinued its residential lending program in July 2021.

Private-sector lenders originate mortgage loans and sell them to NDHFA when they are closed. Parties interested in learning more about the agency’s homeownership programs will find information online at or by contacting a participating lender or a FirstHome certified real estate agent.

NDHFA is a self-supporting and mission-driven state agency dedicated to making housing affordable for all North Dakotans. The North Dakota Industrial Commission, consisting of Governor Doug Burgum as chairman, Agriculture Commissioner Doug Goehring and Attorney General Drew H. Wrigley, oversees the agency.

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