North Dakota Mortgage Limits in 2022
- You can borrow up to $647,200 for a conforming mortgage in North Dakota, or $420,680 for an FHA mortgage.
- To borrow more than $647,200, you must apply for a jumbo mortgage, which has stricter eligibility requirements.
- Your choice between a conforming or FHA mortgage may depend on credit rating, debt, or insurance costs.
- Check out today’s mortgage and refinance rates in North Dakota on Insider.
Deciding which type of mortgage to get is quite simple in North Dakota.
The Federal Housing Finance Agency sets borrowing limits for conforming mortgages, and the Federal Housing Administration sets limits for FHA mortgages.
Borrowing limits for both types of mortgages are the same in all North Dakota counties. For a single family home, the conforming mortgage limit is $647,200 and the FHA limit is $420,680.
How to determine the type of mortgage that is best for you
Conforming mortgages generally require a minimum credit score of 620. Some lenders allow a debt-to-equity ratio of up to 50%, but others require as low as 36%.
The down payment requirements for conforming and FHA mortgages are similar. You will need at least 3% for a conforming mortgage and 3.5% for an FHA mortgage. If you don’t have the credit score or DTI ratio to qualify for a conforming mortgage, an FHA mortgage is the obvious choice between the two. You are eligible with a credit score as low as 580, or even 500 if you have a 10% down payment. Most lenders also accept a DTI ratio as high as 43%.
If you qualify for both a conforming mortgage and FHA, your choice might come down to insurance costs.
“The FHA has something called Initial MIP, or Initial Mortgage Insurance Premium,” says Darrin Q. English, senior community development lending manager at Quontic Bank. “You are not actually paying out of pocket for this MIP funding, but it is added to the loan amount. When you receive a closing disclosure or loan estimate, you will see that there will be a measurement of the amount of your loan, then there will be an adjusted loan amount added to this initial MIP.”
Compliant mortgages charge something called private mortgage insurance (PMI) if you put less than 20% down. But the lender cancels the PMI once you earn 22% equity in your home, and you can even request to cancel it sooner when you reach 20% equity. With an FHA mortgage, you must pay MPI for the entire term of your loan.
There is one major exception to this rule, explains English. If you make a 10% down payment on an FHA mortgage, your MPI will be canceled in the eleventh year of your loan.
If you’re unsure which type of mortgage is best for you, contact a mortgage lender to speak with a loan officer. Ask questions about their differences, pros and cons, and which is best for your situation.