South Dakota First Time Home Buyers Programs

Buying your first home is an overwhelming experience, and without the right information, homebuyers often end up making huge financial mistakes. Home buying is a one serious job, from searching the right property to finding an appropriate mortgage loan, there’s a lot to manage.

Fortunately, to help first-time home buyers with affordable mortgage loans, there are a lot of special programs offered by both the South Dakota State Government and Federal Government. In this article, let’s see what Assistance Programs are available in South Dakota and whether they are suitable for you or not

The Assistance Programs include

South Dakota first-time homebuyer Programs

The South Dakota Housing Development Authority offers a variety of programs that are designed for moderate-to-low income potential home buyers in South Dakota. This non-profit agency works with the local lenders to offer low interest rate, 30-year fixed mortgage loans. These programs are designed to provide mortgage and down payment assistance, construction and rehabilitation support and much more.

Eligibility for South Dakota Assistance Program

To qualify for the South Dakota Assistance Program, you must meet program-specific requirements such as purchase price limits, credit score minimums, and household income limits. The specific program for the first-time home buyers require that the borrower have not owned a home in the past three years.

First-time Homebuyer Program

Pros

• Lower interest rate
• Down Payment Assistance
• Borrowers may also qualify for veterans waiver

 Cons

• Strict Income Limits

Eligibility

• Purchase price of the property must be lower than $250,200
• Borrowers must not have owned a home in past three years
• Income limit may apply based on the location of the county
• Mobile home does not count as prior homeownership
• Meet Credit requirements as well as other conditions set by the SDHDA

How it works

To learn more about this loan program and how you can get approved for it, you would need to contact an SDHDA-participating lender. Affiliated Mortgage offers this First-time home buyer assistance program at low-interest rates. Contact out Loan Officer [hyperlink to LO contact page] now to find out more

Fannie Mae / Freddie Mac

The Federal Government created Fannie Mae and Freddie Mac to stabilize the mortgage market. Both of these agencies provide loan programs that are specifically designed for first-time homebuyers.

Pros

• Very low down payment required
• Different loan terms and types available
• Little to no credit required for mortgage application approval

Cons

• Could come with higher interest rates

Eligibility

• Monthly income should not exceed the U.S. median income by much
• A minimum of 620 credit score is required
• Borrowers will be required to pay Private Mortgage Insurance, till they have accrued 20% equity in their homes.
• The loan is available in 15 to 30-year fixed-rate mortgage terms as well as an Adjustable Rate Mortgage (ARM).

How it works

This mortgage program is designed by the Federal Government to help people in fulfilling their dream of homeownership. To find out how you can apply for this mortgage program, contact our Mortgage Expert now.

City of Sioux Falls Homebuyers Assistance Program

Pros

• Down Payment Assistance
• Closing Costs Assistance

Cons

• Strict eligibility criteria

Eligibility

• Debt-to-income ratio should not exceed 43%
• Income limits apply – Household income must not exceed 80% of the area median
• The borrower must not have owned a home in the past three years
• The borrower must be credit worthy and is able to obtain a commercial mortgage
• The purchase price is limited to $137,000
• The borrower is required to attend a homebuyer education class
• Cash assets of the borrower must not exceed $10,000 at the time of closing
• The borrowers must contribute at least $500 towards the transaction
• The housing expense ratio is limited to 31% of the total household income
• A house inspection is required and the deficiencies must be corrected within 60 days of closing
• Rentals are not eligible unless there is proof that the last tenant vacated the property voluntarily
• The properties that are eligible for this program must be  located within the designated boundaries set for the program and should be single family detached homes affixed to a permanent foundation

How it works

To get a pre-screening and to see if you qualify for this assistance program, contact a qualified Mortgage Expert [hyperlink to LO contact page] in Sioux Falls.

Governor’s House Program

The Governor Program exists under the SDHDA. It is built to help the elderly South Dakotans with disabilities become homeowners. It also provides a chance to low-income families to make their dream of homeownership come true. The program revises the income limits every year to accommodate the citizens efficiently.

Pros

• Low-cost housing for elderly residents of South Dakota with disabilities
• Provides affordable housing for low income families

Cons

• Does not offer mortgage
• Strict income limits

 Eligibility

• Income limits apply – For couples, household income should not exceed $49,910 and for families of three or more, it should not exceed $57,040
• The home should be the buyer’s only resident
• Net worth limits apply – families and individuals who are 62 or older must have a net worth of less than $175,000 and $100,000 in liquid assets. Families and individuals who are under the age of 62, net worth should not exceed $90,000 and $70,000 in liquid assets.
• Purchase price limits apply – The price of the house to be bought must not exceed $49,700 plus excise and sales tax for a two bedroom and $56,700 plus sales tax and excise for a three bedroom.
• Homebuyers are responsible for the building permit, lot, foundation, appliances, floor coverings, and utility hookups.

How it works

This program offers housing at low costs as the houses are built by the inmates through the Governor’s inmate training program. These houses can either be clustered in a community or placed separately. For more information, contact our Loan Officer and see if you are qualified for this program.

Grow South Dakota Program

The Grow South Dakota Program does not offer mortgages directly. It mostly assists homebuyers in down payments and closing costs and helps them in securing an affordable mortgage from approved lenders.

Pros

• Can be used to cover down payment, closing costs, or necessary out-of-pocket investments
• 0% deferred interest mortgage
• Five year forgivable loan of $7500 for owner occupied properties
• Additional benefits are available for military, teachers, and first-responders

Cons

• Must meet specific under-writing criteria set by the lender
• The eligible homes must be on a permanent foundation with property owned

Eligibility

• Not limited to first-time homebuyers
• Income limits vary by occupation and household size
• Short-sale properties are eligible
• The borrower need to take the Homeownership education class

How it works

Grow South Dakota is a private non-profit organization that offers various assistance programs to homebuyers and renters. They provide free-resources and educational material designed for first-time homebuyers.

The agency also provides “Home-Purchase Package” based on the information that the applicant provides them. This package is more like a personalized blueprint for purchasing a home that really helps homebuyers in making informed decisions. The package provides some tips on how to keep your mortgage in good standing and avoid foreclosure. To get started for the process, you need to create an account on the Grow South Dakota website. Then, you will be required to take an online quiz which will determine whether you are eligible for this program or not. If you are eligible, the next step would be to find an approved lender.

Down Payment Assistance Program

This program is designed to assist South Dakota residents with Closing Costs and Down Payments. The program aims to make these costs affordable for the most citizens, so that more and more people can purchase a home.

Pros

• Borrowers can receive up to 3% of the purchase price of the house to help with Down Payments and Closing Costs of the Mortgage.
• Zero-interest second mortgage without any payments or fees

Cons

• Need to meet the Lender Criteria

Eligibility

• Each lender requires a different set of criteria for this down payment assistance program

How it works

To get approved for this assistance program, contact our Loan Officer now to find out the eligibility requirements in your county. 

Home Are Possible, Inc. (HAPI)

Homes Are Possible provides affordable housing for South Dakota residents with low-to-moderate income in underserved areas. The program offers down payment assistance programs and grants.

Pros

• Down Payment/Closing Costs Assistance, which may be repaid interest free when a house is sold, title is transferred, or a cash back refinance is obtained
• Limited Home Improvement grants are also available

Cons

• Geographic restrictions
• Income limits apply

Eligibility

• Must meet income limits set for the specific county and household size
• The borrower must take the homebuyer education course

How it works

This program is currently offered in counties of Beadle, Brown, Buffalo, Campbell, McPherson, Potter, Sanborn, Spink, Stanley, Sully, Clark, Codington, Davison, Day, Deuel, Hand, Hughes, Hyde, Jerauld, Marshall, Edmunds, Faulk, Grant, and Walworth. To find out if you are qualified for this program, contact HAPI for the latest details

National First-time homebuyer Programs

If you did not find any of the above programs suitable, you can find other nationwide available programs for first-time homebuyers. You can also check out the assistance programs from FHA, VA, and USDA.

Contact our Mortgage Experts today to find out the government-backed home loans for which you can get qualified. The Loan Officers at Affiliated Mortgage will find a Mortgage Program that will be perfectly tailored to fit your budget.

Contact us at (605) 718-9820 or fill out a quick form below to let our mortgage experts help you with your first home.

Contact us Now

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