2023-25 Budget
What is driving North Dakota Housing Finance Agency’s 2023-25 budget increases and FTE requests?
2021-2023 and Proposed 2023-2025 Budget
North Dakota Housing Finance Agency (NDHFA) is a self-supporting and mission-driven agency dedicated to making housing affordable for all North Dakotans. All operational expenditures are covered by mortgage servicing revenues and administration of state and federal programs.
The proposed budget aligns future and on-going business decisions capitalizing on leadership and organizational strengths while also evaluating personnel and financial resources to manage expectations and desired outcomes.
Housing Incentive Fund
NDHFA administers the state’s Housing Incentive Fund (HIF), which is dependent upon legislative approval. The 2021-2023 program was funded through the General Fund.
- 2021 legislature authorized $9.5 million for HIF. Currently, no HIF funding remains.
- The Governor’s budget includes a transfer of Legacy Fund Earnings to HIF in the amount of $25 million for the 2023-2025 budget.
Program Transfer
ND Department of Commerce is proposing the transfer of the ND Homeless Grant and the Emergency Solutions Grant to NDHFA.
- The ND Homeless Grant is funded through the General Fund.
- The Emergency Solutions Grant is a federal program with matching state funds authorized through the general fund.
- No FTEs are included in the request to transfer.
Request for Six FTEs
There is an affordable housing shortage statewide. NDHFA and our stakeholders are working to find solutions to address affordability gaps, preserve aging housing stock, and to construct new housing that meets our diverse demographic needs. Addressing these challenges requires legislative authority for the Agency to manage the associated risks and leverage financial resources while executing our affordable housing finance role.
FTEs needed – 2
Reasoning – state and federal regulations, as well as mortgage investment and bond reporting requirements have become more complex.
Compliance officers will conduct internal assessments and compliance testing to provide division and program administration support to ensure an appropriate control environment is implemented and steer the overall technical compliance trajectory of the Agency.
The Code of Federal Regulations – National Archives and Records Administration requires the private sector to employ an internal auditor for every $400 million in average daily assets. NDHFA currently has 1 FTE, allocating part of their time for approximately $1.8 billion in assets.
If 2 FTEs are added, each position would be responsible for the compliance of $900 million in average daily assets in addition to overseeing state and federal regulations as well as mortgage investment and bond reporting requirements.
FTEs needed – 2
Reasoning – succession planning. Need to align business and technical processes to meet citizen and industry expectations.
Business Analysts help Agency leadership to define technical goals, then overseeing development by Information Technology staff. Analyze the flow of data and predict what changes in infrastructure will be necessary as the business grows.
FTEs needed – 2
Reasoning – North Dakota’s low-income population is forecasted to grow 11% by 2025 driving the need for below-market mortgage interest rates and down payment and closing cost assistance.
Mortgage loan specialists work with the Agency’s lending partners to originate loans that are sold to NDHFA when they are closed. All the loan servicing is done in-house with staff working one-on-one with homeowners who experience financial difficulties to help maintain their housing stability and preserve their financial well-being. Both loan documentation and customer service are labor intensive due to the federal regulations associated with lending to low-income households and the inexperience of first-time homebuyers.
NDHFA currently has 10 FTEs servicing 11,494 loans; NDHFA employee-to-loan ratio is 1:1,149. The private market standard employee-to-loan servicing ratio is 1:850.
If 2 FTEs are added, the employee-to-loan servicing ratio will change from 1:1,149 to 1:958, which is still higher than private market standards.
Reinvestments for Housing Stability and Financial Security
NDHFA utilizes earnings from various income sources to provide Agency-funded grant programs that allow individuals to secure housing, live independently and address local housing needs. These programs reduce the costs of other state-funded programs for low-income households and help to ensure that the housing development resources are utilized to address true community needs.
Current Agency-Funded Programs
Based on historical budget outlooks, NDHFA could reinvest additional resources into Agency-funded grant programs
New Agency-Funded Program
NDHFA has the opportunity to leverage a 2009 Indenture to fund the new Loan Guaranty fund (LGF) and eliminate the need for mandated government-issued mortgage insurance.
Reasoning
- Removal of government-issued mortgage insurance requirements result in:
- lower fees for enrolled borrowers
- staff and lender time savings
- Generates additional revenue for Agency-funded programs
Additional Resources
NDHFA Budget Legislation
NDHFA Website
Housing Incentive Fund
Strategic Plan 2020-2025
Dept. of Commerce Budget Legislation (ND Homeless Grant/Emergency Solutions Grant transfer)
For more information contact:
Dave Flohr, Executive Director
701-328-8060
hfainfo@nd.gov
NDHFA Mission and Values
NDHFA is a self-supporting and mission-driven state agency dedicated to making housing affordable for all North Dakotans. We offer affordable home financing to low- to moderate-income families, and help to ensure the continued availability of suitable rental housing for households of modest means while focusing on the overall housing needs of our state’s growing communities.
Service
We are knowledgeable, passionate and committed to making continuous improvements providing the best service to current and future clients.
Teamwork
We hold ourselves accountable as industry leaders and collaborate with our housing partners to enhance communication and innovation.
Integrity
We lead with trust and honesty and pledge to treat those we serve with respect and dignity.
Compassion
We appreciate the perspective of others and genuinely care about our clients, co-workers and partners in housing.