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Frequently asked questions about the First-time Homebuyer Program. |
First-time Homebuyer Loans
Current Interest Rates
4.375% Starting Step
5.375% Fixed
5.85% Fixed Rate Plus
See description below
Commonly known as the "First-time Homebuyer Program", this program provides below-market fixed interest rate mortgage loans and cash assistance for homebuyers purchasing a residence in the state of South Dakota. Participating Lenders originate, process and close the loans. On behalf of SDHDA, five Master Servicers collect mortgage payments and otherwise service the loans. Cash assistance is available for downpayment and closing cost assistance with the Fixed Plus Rate Option.
Income Limits
The borrower's gross annual income may not exceed federally imposed income limits which vary based on family size and the county in which the home is located.
| First-time Homebuyer Income Limits | ||
|---|---|---|
County of Residence |
Maximum Family Income |
|
|
2 or less |
3 or more |
Brookings |
$63,000 |
$72,450 |
Brown |
$58,600 |
$67,390 |
Codington |
$58,700 |
$67,505 |
Custer |
$57,200 |
$65,780 |
Davison |
$57,700 |
$66,355 |
Hughes |
$67,000 |
$77,050 |
Lake |
$57,300 |
$65,895 |
Lincoln |
$65,100 |
$74,865 |
McCook |
$65,100 |
$74,865 |
Minnehaha |
$65,100 |
$74,865 |
Pennington |
$57,400 |
$66,010 |
Stanley |
$61,100 |
$70,265 |
Turner |
$65,100 |
$74,865 |
Yankton |
$57,100 |
$65,665 |
Targeted Areas* |
$67,800 |
$79,100 |
All Other Counties |
$56,500 |
$64,975 |
*Parts of Bennett, Buffalo, Corson, Dewey, Jackson, Lyman, Shannon, Todd, and Ziebach Counties are considered targeted areas |
||
Effective February 22, 2008 |
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Printable List of First-time Homebuyer Income and Purchase Price Limits
Printable list of of Income Limits for Downpayment Programs
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Purchase Price Limits
The property must not exceed the federally-imposed maximum purchase price limits which vary based on the county in which the home is located.
First-time Homebuyer Purchase Price Limits |
||
| County of Residence | Existing |
New
Construction |
| All Counties | $204,432 |
$204,432 |
| Targeted Areas* | $249,862 |
$249,862 |
*Parts of Bennett, Buffalo, Corson, Dewey, Jackson, Lyman, Shannon, Todd, and Zeibach Counties are considered targeted areas. |
||
Effective February 2, 2005 |
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Printable List of First-time Homebuyer Income and Purchase Price Limits
Interest Rates
SDHDA offers three rate options:
Step Rate - The interest rate starts at a predetermined affordable rate and increases one-half of one percent per year for the first four years and then becomes fixed at the beginning of the fifth year, where it stays for the remaining term of the loan.
Fixed Rate - The interest rate is fixed for 30 years.
Fixed Rate Plus - This is a new option offered by SDHDA. The interest rated is fixed for 30 years and it also offers a 3% gift for downpayment and closing costs.
Additional Requirements
The borrower must meet lending standards of creditworthiness, occupy the home as the principal place of residence within 60 days and meet certain other eligibility requirements.
All loans must be insured or guaranteed against default by the Federal Housing Administration (FHA), Veteran's Administration (VA), USDA Rural Development or insured by a private mortgage insurance (PMI) company (Mortgage Insurance is not required if your downpayment is 20% or more.
All single family residences must be owner-occupied, one to four family units. Dwellings with two to four family units must not be newly constructed.
Veteran's Eligibility
Veterans who have been honorably discharge from active military duty, or have reenlisted subsequent to the date they would have been honorably discharged, and have owned a home within the past three years can now obtain mortgage financing through SDHDA's First-time Homebuyer program under a "Veteran's Waiver."
- Veteran's Waiver is available to any Veteran: World War I, World War II, Korean Conflict, Vietnam, Desert Storm, etc., regardless of when they were discharged.
- The waiver applies even if the spouse of a Veteran has owned a home in the last three years.
- Refinancing an existing loan is prohibited.
- An eligible Veteran may only use the waiver one time.
- A borrower qualified under the "Veteran's Waiver" must still meet SDHDA's income limits, purchase price limits, and occupancy requirements.
Please see a Participating Lender for complete information.
Funding Source
This Program is funded by Tax-exempt Mortgage Revenue Bonds.
How to Apply
Contact one of SDHDA's Participating Lenders for an application and interview.
