Flex PACE for Affordable Housing

The Flex PACE for Affordable Housing provides financing with an interest buydown for new affordable multi-family housing units and non-residential child care projects, new or expanding, licensed in North Dakota.

Projects must be located in North Dakota and can be used in conjunction with other state or federal programs targeted to affordable housing. The community must provide a matching component to the interest buydown attached to this program.

Proceeds are for the permanent financing of affordable multi-family housing units or new or expanding non-residential child care projects. BND may also be involved in the construction financing if the lead lender chooses but the interest buydown applies only to the permanent financing.

Determined by the scope of the project.

A fixed or variable interest rate may be used in the loan participation. As a result of the interest buydown, the interest rate to the borrower may be as much as 5% below the rate on the promissory note,  but not less than 5% below Prime with a floor of 1%.

Fees: Origination fee $250 minimum

The lead lender may be any community financial institution.

First real estate mortgage and assignment of rents to be taken.

  • BND requires satisfactory evidence that the housing project will provide rental concessions at a level deemed to be affordable in the community.
  • The local housing authority or other local government agency will verify current market rates at the time of application and the rental concessions made as a part of the affordable housing loan request. The local group will provide annual verification of the borrower’s affordable housing compliance.
  • A maximum of $25,000 of BND interest buy down is available per unit committed to affordable housing.

BND will evaluate all requests in the same manner as a commercial bank participation. Qualifications such as equity, collateral and information requirements are determined on a case-by-case basis. BND’s participation must be 50 percent to 80 percent.

Flex PACE may provide interest rate buydowns up to these maximums: $500,000 for Affordable Housing and $300,000 for Child Care. The community’s share of the buydown is matched by the community at the designated participation level described under the community percentage factor. An exception will be made for communities that have a community percentage factor of 75 percent or more to increase their percentage by an additional five percent.

The Flex PACE buydown is limited to the amount required to reduce the interest to the lesser of either 5% below the yield rate or 1%.

Community buydown: The community may meet its match requirements in the form of a contribution of direct cash, loans, equity, investments, land, property or infrastructure. Each may count toward the community’s funding of its portion of the buydown. Property tax exemptions or payments in lieu of property taxes are not eligible as community contributions.

Principal and interest payments will be required. Length of term, amortization, personal guarantees and loan-to-value percentages will be negotiated between the lead lender and BND on a case-by-case basis.

  • Real estate: Up to 20 years

Accountability Information Release (PDF)
Bank Participation Loan Application (PDF)

It is recommended you use Internet Explorer 11 or above to download these forms. If you are not able to access a PDF, please contact us for assistance.

BND offers this loan by partnering with local lenders. To apply, contact your lender.

If you have any questions, contact us or call 701.328.5795.