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.
Offerings: Provides a 30-year fixed-rate mortgage (FHA, VA, USDA, or conventional) with below-market rates; can be paired with down payment assistance.
Requirements:

• Income must not exceed county-specific limits (e.g., $109,000 for a 1-2 person household in Minnehaha County as of 2025).
• 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 $349,525 (non-targeted areas) or $427,198 (targeted areas).

Down Payment Assistance (DPA):

Benefits: Offers up to 3% or 5% of the loan amount (e.g., $6,000-$10,000 on a $200,000 mortgage) as a second loan (3% interest, repayable over 10 years) for down payment and closing costs; available with SDHDA mortgages.
Eligibility: Must use an SDHDA first mortgage; income and purchase price limits apply (same as First-Time Homebuyer Program).

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.
Requirements: Income capped at 80% AMI (e.g., $62,400 in Pennington County for a family of four); must meet SDHDA mortgage criteria; limited availability.

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., $66,750 for a family of four).

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.

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.

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 applies; 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.