Typical down payment 5 – 20% and option for term of repayment ranges from 15-40 years.

Conventional mortgages are neither guaranteed nor insured by the federal government.  They may have stricter qualifying guidelines than government backed loans – less long-term debt, more income and more cash at closing.  Most conventional loans are not assumable.  If your down payment is less than 20 percent of the purchase price, the lender will require Private Mortgage Insurance on a conventional loan. 

The Federal Housing Administration (FHA) is a division of HUD that insures and establishes guidelines for mortgage loans made by private lenders.  These loans require lower down payment – typically 3.5% of the purchase price or appraised value, whichever is lower.  It can also be easier to qualify for this type of loan.  With an FHA loan, you pay a mortgage insurance premium called MIP.  MIP is paid as an up-front cost that can be financed in the loan and also a monthly premium amount which is included in the monthly mortgage payment.  This insurance protects the lender if the borrower is unable to maintain monthly payments and loses the property.  FHA does have maximum loan amount guidelines that vary by region.  FHA loans are assumable.

The Veterans Administration guarantees mortgages loaned to eligible veterans.  The VA has maximum loan limits but has little or no down payment requirement.  No mortgage insurance is required.  A one-time funding fee can be financed in the loan.  Contact your local Veteran’s Administration for details on eligibility and instructions for obtaining the required Certificate of Eligibility.  VA loans are assumable.

North Dakota Housing Finance Agency offers the FirstHome Program which provides low interest rate mortgages for North Dakota’s first-time homebuyers.  FirstHome is targeted to low- to moderate-income borrowers and has established income limits based on family size.  Borrowers must have proven themselves an acceptable credit risk and occupy the home as their principal residence.  Borrowers must have a minimum of a $500 out-of-pocket cash investment.    Your mortgage lender will qualify you for the FirstHome Program and determine your eligibility for down payment assistance as well.  Borrowers can access www.ndhfa.org for additional information.