Frequently Asked Questions

How do I apply?

Contact one of SDHDA's Participating Lenders for an application and interview.

Do I have to have (or open) an account with a participating lender?


Can I build a home?

Yes, SDHDA financing can be used for the purchase of existing homes or new construction.

How much can the house cost?

The current purchase price maximum limit is $340,000.

What is the required downpayment?

It depends on the type of mortgage insurance, but usually it's somewhere around 3% of the loan amount and up.

Is a co-signer allowed?

SDHDA will permit a co-signer with no ownership interest in the property (does not take title or execute the Mortgage) to execute the Mortgage Note and, thus become liable for repayment of the obligation.

Can I buy a home in the country?

SDHDA can only finance the residence and the land required to reasonably maintain the basic livability of the residence. The land cannot provide a source of income, the property cannot be subdivided in the future, and outbuildings cannot be financed with the proceeds of a mortgage loan.

Can I finance improvement and/or repairs?

Yes, the lender must provide signed bid estimates or copies of final bills.

Are the income limits based on gross or net income?

Annualized gross income from any and all income sources.

Is overtime, bonus, and commission pay included when determining income?

Yes, an average of past year and year to date is used for these types of income.

Can I finance a manufactured/mobile home?

It is possible to finance a manufactured/mobile home with a "Government" insured or guaranteed first mortgage with SDHDA. It must be placed on a permanent foundation which conforms to mortgage insurer guidelines, and it must be taxed as real estate.

How do I start the Process?

Contact one of SDHDA's Participating Lenders for an application and interview.

What does SDHDA do with my personal information?

See SDHDA's Privacy Notice.

Is Homebuyer Education required?

At least one borrower/co-borrower must have attended a homebuyer education course when using a conventional mortgage product. These include private, insured and uninsured mortgages only. Homebuyer Education is available online or in person and is free.

What is FHA, VA, USDA Rural Development, PMI, Uninsured?

They insure your mortgage lender against loss.

Interest rates are usually quoted in terms of "Government" or "Conventional." "Government" type loans are those that are either insured or guaranteed by an entity of the federal government which include:

FHA - The Federal Housing Administration of the U.S. Department of Housing and Urban Development

VA - The Veterans Administration, an agency of the United States of America

USDA Rural Development - The United States Department of Agriculture, rural Economic and Community Division.

Whereas "Conventional" type loans either have private mortgage insurance (PMI) or with a 20% downpayment are not insured at all. The insurance or guarantee protects the mortgage holder against loss due to non-payment or foreclosure of your loan. There is a cost to you and your Participating Lender will explain each type and help you choose which one is best for you.

PMI - Private Mortgage Insurance Companies

Uninsured - The borrower put 20% or more down on their loan making mortgage insurance unnecessary