South Dakota is famous for its natural beauty and adventure. It hosts a variety of attractions with Mount Rushmore to name a few. The stunning landscapes along with outdoor activities have made it a popular holiday destination for nature enthusiasts.

However, South Dakota’s housing market is facing a crisis as median home listing price surged by 26.8% year-over-year, outpacing the national average increase of 13.9% during the same period. The rising costs and limited inventory exacerbated the situation, making homeownership difficult for the citizens, especially first-time buyers.

Prospective homebuyers can apply various down payment assistance programs for financial relief. The state and many organizations offer grants and loans to cover the costs and make homeownership more attainable.

Looking for Assistance in a Specific Part of South Dakota?

Are you on the search for down payment assistance programs in South Dakota? This page provides a comprehensive overview of the state and local initiatives. You can get detailed information on down payment assistance programs available in specific areas on the following links.

Down Payment Assistance In South Dakota

The housing sector is reeling in South Dakota with challenges as the average price for homes soared to approximately $311,866, meaning that the minimum down payment of 3% amounts to about $9,355 whereas a 20% down payment set back homebuyers around a staggering amount $62,373. This is why the South Dakota Housing Development Authority (SDHDA) and other organizations are addressing this issue by offering financial assistance which makes housing more accessible and contributes to the state’s overall economic health. Here is a breakdown of these initiatives:

South Dakota Housing Development Authority Fixed Rate Plus Program

The South Dakota Housing Development Authority Fixed Rate Plus Program caters to first-time homebuyers who need help in overcoming financial barriers associated with down payments and closing costs.

Fundamentals

• Assistance Type: Interest-free second mortgage
• Sponsor: South Dakota Housing Development Authority
• Assistance Amount: Up to 5% of the first mortgage loan amount

Eligibility Requirements

• Only first-time homebuyers i.e. individuals who should not have purchased a home in the past three years can apply for assistance.
• Borrowers must qualify as per the income limits set by the state.
• The cost of a home purchase should not be higher than $385,000 for first-time buyers.
• The limit for repeat homebuyers or those purchasing in targeted areas is $460,000.

Homes Are Possible Inc. Down Payment Closing Cost Assistance Program

The Homes Are Possible Inc. (HAPI) Down Payment Closing Cost Assistance program helps potential homebuyers who are making monthly payments on a new home but have not saved enough for a down payment.

Fundamentals

• Assistance Type: Non-forgivableloan
• Sponsor: Homes Are Possible Inc.
• Assistance Amount: $3,500 (at maximum)

Eligibility Requirements

• The borrowers must complete a homebuyer education course from an approved provider.
• The applicants must have a gross household income that should not be higher than 80% of the county’s area median income (AMI) in which the purchased house is located.
• The purchased home should be on a permanent foundation

South Dakota Down Payment Assistance Program FAQs

Are the loans offered under the Homes Are Possible Inc. Down Payment Closing Cost Assistance Program forgivable?

The applicant is required to repay the amount received through the Homes Are Possible Inc. Down Payment Closing Cost Assistance Program because it is an unforgivable loan.

Are repeat homebuyers eligible for financial assistance with the SDHDA Fixed Rate Plus Program?

Yes, repeated homebuyers can avail of financial assistance through the South Dakota Housing Development Authority Fixed Rate Plus Program provided if the maximum purchase limit of the house is $460,000 or less.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.