Frequently Asked Questions
 
Is this a second mortgage and what are the terms?
    
Yes, both the Employer Mortgage Assistance Program (EMAP) and the Loan Assistance Program (LAP) are second mortgages. You may borrow anywhere from $600 - $6,000 for a term of 60 months at a rate of 2% with the EMAP Program.  Under the LAP Program you may borrow $500 - $10,000 with terms from 5 to 10 years at a rate of 5.0%.
 
How do I apply? How do I repay the Downpayment Assistance Program Loan?

Contact a Participating Lender to apply. You pay the loan back to your lender in the same way as you do for your first mortgage loan. If you qualify for SDHDA’s First-time Homebuyer Program, you only make one payment to your lender for both the first mortgage and the Downpayment Assistance Loan.

What do I need to do to qualify?

For the EMAP Loan you simply contact your employer for an “Eligibility Certificate”. Then take this certificate to an SDHDA Participating Lender.  For the LAP Loan, you need to provide your lender with a "Certificate" from the homebuyer education provider. 

Can I have the payments deducted automatically from my paycheck?

No. However, you can have your monthly house payment (which includes the Downpayment Assistance Loan) automatically deducted from your checking or savings account by the lender once your payroll check has been deposited.

What if I have an EMAP Loan and want to leave my employer before the 60 months is up?

One of the forms that you will sign at your loan closing is an “Addendum to the Promissory Note” that states that if you cease to be employed with your employer, the interest rate will be increased from 2% to the Prime Rate plus five percent.

Are there any other criteria to qualify for the these types of loan programs?

There may be other specific requirements by your Participating Lender. If you qualify for SDHDA’s First-time Homebuyer Program, there are Purchase Price and Income Limits that apply.

What happens if I sell my home?

You will be required to pay off the Downpayment Assistance Loan from the net proceeds of the sale. Whoever handles the sale closing will contact SDHDA for the exact amount that is required.

Is there a prepayment penalty?

No. There is no prepayment penalty with the Downpayment Assistance Loan.