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Your eligibility for a first-time homebuyer program may depend on your South Dakota county of residence.
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The South Dakota Housing Development Authority offers financial assistance to first-time homebuyers.
Requirements for the state and non-profit homebuyer programs vary by county and household size.
To see if you qualify for state assistance, talk to an SDHDA-approved lender.
If you’re a first-time homebuyer in South Dakota but don’t meet the qualifications for a conventional mortgage, you may still have other opportunities to purchase a home.
The South Dakota Housing Development Authority (SDHDA) and local non-profit organizations have several homebuyer programs and resources that can help you during the homebuying process. Here’s an overview of the programs.
SDHDA First-time Homebuyer Program
The SDHDA First-time Homebuyer Program is a state program that may help you get a fixed-rate government-backed mortgage if you wouldn’t normally qualify with a private lender.
The SDHDA First-time Homebuyer Program is open to any homebuyers who meet the following criteria:
You haven’t owned a home in the last three years (if you owned a mobile home, you still qualify)Your income falls below the South Dakota Housing LimitYou plan to purchase a home that’s $340,000 or less
If you are a military veteran or active military member who isn’t a first-time homebuyer, you also may qualify for the First-time Homebuyer Program. However, you’ll need to fill out a waiver.
How to determine whether you fall below the South Dakota Housing Limit
The South Dakota Housing Income Limit depends on which county you reside in and the size of your family.
Here is the South Dakota Housing Income Limit per county as of May 2, 2022, according to the SDHDA:
CountyMaximum total gross income for a family of 2 or lessMaximum total gross income for a family of 3 or moreBrookings$96,300$110,745Brown$89,600$103,040Clay$89,500$102,925Edmunds$90,000$103,500Faulk$91,800$105,570Hughes$100,100$115,115Lake$90,000$103,500Lincoln$90,700$104,305McCook$90,700$104,305Minnehaha$90,700$104,305Stanley$89,400$102,810Turner$90,700$104,305All other counties$85,400$98,210
How to apply for the SDHDA first-time homebuyers assistance program
To see if you might be eligible for the SDHDA First-time Homebuyer Program, the SDHDA has an eligibility check form which you can find here.
However, note that you’ll have to talk to a participating lender to be 100% certain you qualify. Find participating lenders through the SDHDA search tool here.
SDHDA down payment assistance
If you need help paying for your down payment or closing costs, the SDHDA Fixed Rate Plus loan might be worth exploring.
With the SDHDA Fixed Rate Plus loan, you may receive 3% or 5% of your mortgage as a loan, which can go toward covering these costs. The state loan has a 0% interest rate and doesn’t have additional fees.
Qualifications vary among lenders, so you’ll have to talk to an agent with your chosen lender to see if you meet the requirements.
SDHDA Governor’s House Program
The Governor’s House Program offers affordable prefab homes to those who meet income limits. Prefab homes are homes whose parts are built in a factory, then assembled onsite. Those who qualify can purchase a two-bedroom home for $62,800 or a three-bedroom home for $75,200.
One- to two-person households qualify for this program if they earn no more than $59,780; households of three or more people can earn no more than $68,320. Applicants 61 or younger must have a net worth of less than $125,000 or less than $105,000 in liquid assets. Applicants 61 or older must have a net worth of less than $250,000 or less than $140,000 in liquid assets.
If you choose to buy a home through this program, be sure to budget for other costs, including the lot the home will be placed on.
SDHDA homebuyer education
If you feel anxious about homeownership or don’t fully understand the homebuying process, the SDHDA provides free education through the Homeownership Education Resource Organization. Classes are held through Zoom and cover topics like how your credit score impacts homeownership and how to manage your money.
Additional non-profit programs and associations
Grow South Dakota
Grow South Dakota is a non-profit organization that offers financial assistance to anyone who makes below 80% of the area median income. Through the non-profit organization’s down payment and closing assistance program, you might be able to get up to $7,500 in a 0% interest loan. Grow also offers mortgages in amounts up to $300,000.
Homes Are Possible, Inc.
Homes Are Possible, Inc. (HAPI) is a non-profit organization that helps low-income individuals in the northern region of South Dakota. You may qualify if you live in one of the following counties: Beadle, Brown, Buffalo, Campbell, Clark, Codington, Day, Davision, Deuel, Edmunds, Faulk, Grant, Hand, Hughes, Hyde, Jerauld, Marshall, McPherson, Potter, Roberts, Sanborn, Spink, Stanley, Sully, or Walworth.
HAPI offers a 0% interest loan for up to $5,000 to cover your down payment or closing costs. To qualify, you can’t earn more than 80% of the area median income.
To be eligible for a HAPI loan or grant, your household must be less than 80% of the average median income per county, and you have to complete a homebuyer education course.