New Lender Eligibility Requirements
Participating Lenders are key to the success of SDHDA programs especially the First-time Homebuyers Program.
With the support of our Participating Lenders, SDHDA has been able to provide a variety of affordable housing programs to the citizens of South Dakota. There are many benefits to being an SDHDA Participating Lender, one of which is the net profit margin as well as the ability to meet CRA lending requirements and provide financing for communities to stabilize neighborhoods by increasing homeownership opportunities.
The SDHDA First-time and Repeat Homebuyer Programs offers Participating Lenders access to a 24/7 internet-based system for processing SDHDA loan reservations. This system features on-line programs documents and forms, manuals and lender management reports. SDHDA also provides yearly training to all of its Participating Lenders to keep them up-to-date with all of the latest program enhancements.
A Participating Lender must be approved by SDHDA's Master Servicer and be approved by SDHDA.
- In general a Participating Lender is any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, life insurance company or other financial institution authorized to transact business within the State which is an FHA/VA approved Mortgage, or qualified to sell mortgages to the Federal National Mortgage Association or to the Federal Home Loan Mortgage Corporation, or any agency or instrumentality of the United States or the State, making or holding a Mortgage Loan, whether for its own account or as agent of the Authority, and approved by the Authority;
- In addition:
- Lender shall be regulated by, and in good standing with FDIC, OTS, CUNA, the Federal Reserve or other federal regulatory agency;
- Lender, and all originators employed by the lender, shall be registered with the National Mortgage Licensing System (NMLS);
- Lender shall maintain an office in the State of South Dakota;
- Lender shall have a net worth of no less than $1,500,000;
- Lender shall maintain minimum errors and omissions coverage of $500,000;
- Lender shall maintain a fidelity bond coverage of no less than $500,000;
- Lender shall have operated a mortgage origination office in South Dakota for 3 years prior to applying to be an SDHDA Lender or the Lender shall have operated a mortgage origination office in South Dakota for 2 years and employ staff with experience originating/processing/underwriting SDHDA loans;
- Each calendar year Lender shall originate a minimum of 10 loans and successfully sell such loans to SDHDA;
- Lender shall annually attend training, as required by SDHDA; and
- Applications to be approved, as a Participating Lender, shall be accepted from December 1 of each calendar year through March 31 of the following year.
A $500 application fee must accompany the signed SDHDA Mortgage Participating Lender Agreement. To get started call or email Brent Adney, Director of Homeownership Programs.