Frequently Asked Questions for the Repeat Homebuyer

What is the Repeat Homebuyer Loan Program?

The Repeat Homebuyer Loan Program was specifically developed for repeat homebuyers that meet special income and purchase price limits and first‐time homebuyers that exceed SDHDA’s First‐time Homebuyer requirements. However, this program cannot be used to refinance an existing mortgage.

Did my first home have to be with SDHDA in order to qualify for the Repeat Homebuyer Loan Program?

No, it does not matter if you had a prior SDHDA mortgage. However, if you had a prior SDHDA mortgage, it must be paid off.

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.

What is the maximum income limit to qualify for the program?

There are only two income limits. Currently, for a family of 2 or less the limit is $102,480 and for a family of 3 or more the limit is $119,560.

What is the limit on the cost of the home under this program?

There is only one purchase price limit for a single family dwelling that is also based on the “Targeted Area” requirement and is currently set at $413,000. There are different limits for 2- to 4-unit dwellings.

What is the interest rate on the loan?

Interest rates are usually quoted in terms of "Government" or "Conventional" and change periodically. SDHDA strives to offer the most competitive rates possible.

Can I receive a Mortgage Credit Certificate (MCC) with the Repeat Homebuyer Loan Program?

Unfortunately, the Mortgage Credit Certificate (MCC) is not an option with the Repeat Homebuyer Loan Program.

If I have a 640 credit score, will I qualify?

Yes, you may. The minimum credit score for SDHDA programs is currently 620. You will still need to qualify credit.

Is homebuyer education a requirement?

Although SDHDA strongly suggests everyone attend a Homebuyer Education class, only SDHDA’s conventional mortgage requires Homebuyer Education. These include private insured and uninsured mortgages only. Homebuyer Education is available online or in person and is free.

Is there a Recapture Tax with this program?

Recapture Tax does not apply to this program.

How do I start the Process?

Contact one of SDHDA’s participating lenders for an application and interview.

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

These entities 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% down-payment 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