First-Time Home Buyer Programs in South Dakota

South Dakota Housing Development Authority (SDHDA) Programs:

First-Time Homebuyer Program:

Eligibility: Targets first-time homebuyers (no homeownership in the past three years) or buyers in targeted areas. Veterans with honorable discharge or reenlistment may qualify regardless of prior homeownership.
Offerings: Provides a 30-year fixed-rate mortgage (FHA, VA, USDA, or conventional) with below-market rates; can be paired with down payment assistance or Mortgage Credit Certificate (MCC).
Requirements:

• Income must not exceed $122,640 for a household of 2 or less, or $143,080 for a household of 3 or more (varies by county).
• Minimum credit score of 620 (varies by loan type).
• Debt-to-income ratio capped at 45% (50% with compensating factors).
• Homebuyer education course required.
• Purchase price limit of $410,000 (non-targeted areas) or higher in targeted areas.

Learn more about the SDHDA First-Time Homebuyer Program

Down Payment Assistance (DPA):

Benefits: Offers 3% or 5% of the loan amount (e.g., $6,000-$10,000 on a $200,000 mortgage) as a 0% interest second mortgage, due upon sale or satisfaction of the first mortgage, with no monthly payments or fees. The Grants for Grads program provides 5% as a grant for recent graduates (within 5 years) with a purchase price limit of $385,000.
Eligibility: Must use an SDHDA first mortgage; income and purchase price limits apply (same as First-Time Homebuyer Program). Grants for Grads requires graduation from an accredited university or technical college.

Learn more about SDHDA Down Payment Assistance

Governor’s House Program:

Description: Provides affordable, energy-efficient homes (2-3 bedrooms) with subsidized pricing (around $75,000-$95,000) and financing through SDHDA; targets low- to moderate-income first-time buyers. Note: Delivery wait times exceed 3 years due to demand.
Requirements: Income capped at $71,540 for 1-2 person households or $81,760 for 3 or more; net worth under $125,000 ($105,000 liquid) for those under 62, or $250,000 ($140,000 liquid) for those 62 or older; must meet SDHDA mortgage criteria.

Learn more about the Governor’s House Program

Local Programs:

Sioux Falls

Sioux Falls Down Payment Assistance: Offers up to $12,000 as a deferred loan (0% interest, due upon sale or refinance) for down payment and closing costs; income must be at or below 80% AMI (e.g., $68,200 for a family of four in Minnehaha County).

Learn more about Sioux Falls Housing Programs

Rapid City

Rapid City First-Time Homebuyer Program: Provides up to $15,000 as a forgivable loan (forgiven after 10 years) for down payment and closing costs; income capped at 80% AMI; targets revitalization areas.

Learn more about Rapid City Housing Programs

Aberdeen

Aberdeen Homebuyer Assistance: Offers up to $10,000 as a 0% interest deferred loan (repayable upon sale) for down payment and closing costs; income must be below 80% AMI.

Learn more about Aberdeen Housing Programs

Homes Are Possible, Inc. (HAPI)

HAPI Down Payment Assistance: Offers a $5,000 interest-free loan for down payment and closing costs in select counties; requires income at or below 80% AMI and completion of a homebuyer education course.

Learn more about HAPI Assistance

Additional Information:

• Mortgage Credit Certificate (MCC): Provides a federal tax credit of up to 30% of annual mortgage interest (max $2,000 yearly) for first-time buyers; fee of $750 ($250 with SDHDA First-Time Homebuyer Program); combinable with SDHDA loans.
• FHA Loans: Minimum 3.5% down payment, suitable for credit scores as low as 580 (10% if below 580).
• USDA Loans: Zero-down payment for rural South Dakota areas; income limits apply.
• VA Loans: Zero-down payment for eligible veterans or active military.
• Median Home Price: $315,000 (as of January 2025); median down payment: $23,169.

Explore additional HUD homeownership resources