McKenzie County Job Development Authority Housing Development Subsidy Program
February 19, 2020 updates to the program:
Allow for off-site, stick-built homes that are
built to IRC codes and meet the JDA building requirements
Increase max city lot size from 10,000 square
feet to one acre
Mandated completion of foundation increased from 30 days
to 60 days
Clarifies that ingress/egress to basement must be finished to nearest facing bedroom/bathroom wall with all other unfinished space accessible through interior door for any houses that are using bedroom(s)/bathroom(s) in the basement to meet the 3 bedroom/2 bathroom minimum requirements.
Inadequate supply of quality, affordable housing is
currently a hindrance to the continued economic development of McKenzie
County. Most industries in our county —the largest of which is the petroleum
industry—are reporting a workforce shortage and many attribute a lack of
quality, affordable housing as a contributing factor in attracting and
retaining their needed workforce. In 2018 the petroleum industry provided over
$78 million to McKenzie County in gross production taxes; and of the 2018
property tax monies levied, over 83% was paid by pipelines and commercial
This program incentivizes the construction and
sale of quality, affordable housing in McKenzie County by providing a development subsidy up to $50,000 per single-family house to offset infrastructure costs for
qualifying housing projects.
Interested developers will submit application
(see link below) at the same time as, or after, the building permit.
Qualifying property must appraise above
the current FHA Mortgage Limit (2020 being $331,760). The purchase price will not exceed $5,000 above
the appraised value. For applications approved in 2019 and house closing happening in 2020, applicants can use either the 2019 or 2020 FHA limit as the floor. For applications approved in 2020 and house closing happens in the same year, the 2020 FHA limit will be the floor. For applications approved in 2020 and house closing happens in 2021, applicant can use either the 2020 or 2021 FHA mortgage limit as the floor.
The homebuyer's loan amount cannot exceed the FHA Mortgage Limit. The Development Subsidy amount will be adjusted based on the
purchase price of the house and if it is built with complete or limited
infrastructure as defined as
gutter, sidewalk, municipal water, municipal sewer—up to $50,000 per house
water and municipal sewer in a city; or in a county subdivision that has
improved gravel road and septic—up to $25,000 per house
No more than $25,000 will be awarded to a house
with limited infrastructure, and no more than $50,000 will be awarded to a
house with complete infrastructure.
The homebuyer will give a 5-year lien to the
JDA for the Development Subsidy amount that will be forgivable so long as the property
remains their primary residence during that time.
Total funds expended during
the pilot stage will not exceed $1,000,000. Accepted applications must complete the basement/foundation within 60 days of application acceptance and finish the house within 12 months of application acceptance. It is the goal of the program to have a variety of sellers and areas of the county to be impacted with this program.
Construction of the house must have started on or after January 1, 2019. Ingress/egress to basement must be finished to nearest facing bedroom wall with all other unfinished space accessible through interior door for any houses that are using bedroom(s)/bathroom(s) in the basement to meet the 3 bedroom/2 bathroom minimum requirements.
funds become available at closing. Checks are cut twice a month--the first and third Tuesday of
the month. In order for funds to be awarded, the appraisal must be submitted and application's qualification requirements must be verified by a city/county inspector. Check requests must be made by noon the Tuesday before.
The McKenzie County Job Development Authority cannot advise the parties of potential tax implications the program may create. It is ultimately the responsibility for the parties involved in the transaction to understand any income tax implications that may arise out of the program.
Probable Impact: construction
and sale of 20-30 stick-built single family homes in McKenzie County in
Private Mortgage Insurance Requirements:
***As of March 26, 2020, $950,000 of the $1,000,000 budget has been allocated. ***