WHERE FIRST-TIME HOMEBUYERS’ DREAMS TAKE SHAPE
What is the First-Time Homebuyer Program?
A program that makes the dream of homeownership a reality for South Dakota first-time homebuyers by providing low-interest-rate mortgage loans. SD Housing partners with participating lending institutions throughout the state to help borrowers build or purchase an existing home.
Find Out If You Qualify
Take our quick qualifying quiz to find out what programs you may be eligible for as a first-time homebuyer in South Dakota.
You may be eligible, if you:
1.
Are a first-time homebuyer, meaning you have not owned a home in the past three years:
If a homebuyer owned and lived in a dwelling unit that was not permanently affixed to a permanent foundation (ie; a mobile home), it doesn't count as previous homeownership.
Ask your lender about our Veterans Waiver to see if you qualify.
2.
Have an income at or below prescribed South Dakota Housing Income Limits.
3.
The purchase price must be $410,000 or less.
Available Loans
Fixed-Rate Buy Down
A Fixed-Rate Buy Down lets you lower your interest rate upfront by paying a 1% discount point at closing. This option can reduce your monthly payment from day one—making homeownership more affordable in the first years of your loan. A smart choice for buyers planning to stay in their home long-term and wanting the lowest possible fixed rate.
Fixed-Rate
A traditional 30-year fixed-rate loan gives you predictable monthly payments and SD Housing’s most competitive interest rate. This is the simplest, most stable option—ideal for buyers who want a straightforward loan without additional assistance or discount points.
Fixed Rate Plus Loan 3%
The Fixed-Rate Plus 3% option pairs a fixed-rate mortgage with downpayment and closing-cost assistance equal to 3% of your loan amount. Assistance is provided as a 0% second mortgage that’s due when you sell or refinance. This option is designed for first-time buyers who qualify for the home but need extra help covering upfront costs. Rates are slightly higher than the standard fixed-rate loan to account for the added assistance.
Fixed Rate Plus Loan 5%
The Fixed-Rate Plus 5% option offers the maximum level of assistance—5% of your loan amount—to help with downpayment and closing costs. Like the 3% option, the assistance comes as a 0% second mortgage due upon sale or satisfaction of the first mortgage. This is a strong fit for buyers who want the most support getting into their home with minimal upfront cash, while still benefiting from a secure, fixed 30-year rate.
Curious about today’s mortgage rates? See how affordable homeownership can be with SD Housing.
Interest Rates are for a 30-year fixed-rate mortgage. Interest Rates are subject to change without prior notice. This is not a commitment to lend. SD Housing does not lend money directly to consumers. We use approved participating lenders to qualify consumers and make all mortgage loans. Homebuyers interested in applying for financing should contact one of SD Housing’s participating lenders.
This is not an advertisement for credit as defined in Regulation Z; contact a participating SD Housing lender for Annual Percentage Rate (“APR”) information.
Program Eligibility Quiz
Start Your Homebuying Journey
Connect with an SD Housing Participating Lender to explore your loan options, ask questions, and begin the application process with confidence.
First-Time Homebuyer Resources
Recapture Tax
SDHDA’s Tax Credit (MCC)
Best of the Best
Frequently Asked Questions (FAQs)
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A program that makes the dream of homeownership a reality for South Dakota first-time homebuyers by providing low interest rate mortgage loans. SD Housing partners with participating lending institutions throughout the state to help borrowers build or purchase an existing home.
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To qualify as a first-time homebuyer, you must not have owned a home in the past three years. If you previously owned and lived in a dwelling that was not permanently affixed to a foundation (such as a mobile home), it doesn’t count as prior homeownership. You’ll also need an income at or below the prescribed South Dakota Housing Income Limits and a home purchase price of $410,000 or less.
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This involves getting in contact with a participating lender, who will review your credit score, income, and debt to provide you with a pre-approval amount.
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Homeownership loans offered through South Dakota Housing typically feature a 30-year fixed-rate mortgage, meaning your interest rate and monthly principal and interest payment remain the same for the life of the loan. Some programs also offer an option that includes downpayment and closing cost assistance, which is provided as a separate, 0% interest second loan with no monthly payments. This assistance is generally repaid only if you sell, refinance, or pay off your primary mortgage. Loan terms are subject to income limits, purchase price limits, and program eligibility requirements, which your participating lender can review with you in detail.
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When you apply for a homeownership loan through South Dakota Housing, your lender will ask for basic financial and personal information to determine your eligibility. This typically includes proof of income, recent tax returns or W-2s, bank statements, employment information, and authorization to pull your credit. You’ll also need to provide details about the home you plan to purchase once you’re under contract. Your lender will walk you through exactly what’s required and help gather any additional documentation needed to complete your application.
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If you sell your home after purchasing through the First-Time Homebuyer (FTHB) program with South Dakota Housing, your primary mortgage will be paid off at closing as part of the sale. If you received downpayment or closing cost assistance, that assistance is typically structured as a 0% interest second loan and will need to be repaid if you sell or refinance.
Selling your home may also affect your eligibility for First-Time Homebuyer Programs in the future, as first-time buyer status generally requires that you have not owned a primary residence in the past three years. Your lender can review your specific loan terms and help you understand how selling could impact repayment and future eligibility.
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South Dakota Housing works with a network of approved, participating lenders across the state. To see a current list and find a lender near you, visit the Find a Lender page on the SD Housing website. There, you can search by location to connect with a lender who can walk you through the First-Time Homebuyer Program and help you get started.
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These terms refer to different loan programs and mortgage insurance options that may be available when financing a home through South Dakota Housing and its participating lenders:
FHA (Federal Housing Administration) loans are government-insured mortgages designed to help buyers qualify with lower downpayments and more flexible credit requirements.
VA (U.S. Department of Veterans Affairs) loans are available to eligible veterans, active-duty service members, and surviving spouses, often offering no down payment and no monthly mortgage insurance.
USDA Rural Development loans support homeownership in eligible rural areas and offer low- or no-down-payment options for qualifying buyers.
PMI (Private Mortgage Insurance) is typically required on conventional loans when the down payment is less than 20%. It protects the lender—not the borrower—and is usually paid monthly.
Uninsured (Conventional) loans are mortgages that are not backed by a government agency. These often require stronger credit and higher down payments, but may allow borrowers to avoid PMI with sufficient equity.
Your lender can help you understand which option best fits your situation and which programs you may qualify for.
Ready to Take the First Step?
Reach out to one of SD Housing’s trusted Participating Lenders to get personalized guidance and see which loan best fits your path to homeownership.
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