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South Dakota First Time Home Buyers
South Dakota first time home buyers’ information and resources that help families and individuals find their first homes.
In the previous year, home prices have risen across the board, but the housing industry in South Dakota has managed to keep those expenses in check.
According to Zillow, home values in The Mount Rushmore State climbed by more than 6% in the last year, a smaller increase than the national trend.
Even so, if you’re a first-time homebuyer, you might need some assistance in coming up with the funds you’ll need to stop renting and start buying.
The South Dakota Housing Development Authority, which has been helping to make homeownership more accessible since 1973 with programs that work with conventional, FHA, VA, and USDA loans, is one of the finest places to start.
South Dakota first time home buyer loan programs
SDHDA First-Time Homebuyer Program
The First-Time Homebuyer Program is the name of the South Dakota Housing Development Authority’s (SDHDA) first-time homebuyer program.
You don’t have to be buying your first house; you just can’t have owned one in the last three years.
If you fit that description, you’ll need to meet a few more requirements to be eligible for a low-interest loan:
➣ A minimum credit score of 620 is required.
➣ A gross household income that is below a specific threshold, which fluctuates depending on the size of your family and where you want to live ($77,800 to $110,170).
➣ Take an online or in-person homebuyer education course.
There are a few requirements that the property you’re buying, or building must meet:
➣ The total cost should not exceed $275,000
➣ It must be on a permanent foundation if it is a manufactured or mobile home.
Down payment assistance in South Dakota
SDHDA Fixed Rate Plus
If you’re having trouble saving up for a down payment on your first house, the SDHDA offers a second loan worth up to 3% of your first mortgage.
You won’t pay any additional interest or fees because the Fixed Rate Plus assistance is a zero percent 30-year loan.
The balance is due after 30 years or when your first mortgage is paid off, whichever comes first.
Other homebuyers help programs in South Dakota
Tax Credit for SDHDA
In addition to the lack of a statewide personal income tax, South Dakota residents may qualify for a mortgage credit certificate, which is a tax break for first-time homebuyers (MCC).
A portion of your mortgage interest can be used as a dollar-for-dollar tax credit with an MCC, lowering your overall tax payment and allowing you to keep more money in your pocket.
Here’s an overview of the tax credits you might be qualified for if your home in South Dakota costs less than $275,000, based on the amount of your mortgage.
The credits range from 30% to 50% off, with a maximum of $2,000 per year:
➣ $120,000 or less: A 50 percent tax benefit on your mortgage interest
➣ From $120,001 to $150,000: A 40% tax credit on your mortgage interest.
➣ If you earn more than $150,000, you can get a 30% tax credit on your mortgage interest.
It costs money to qualify for this tax credit. The MCC program has a regular price of $750, however if you use the SDHDA’s First-Time Homebuyer Program, your fee is only $250.
Check with your mortgage provider to see whether they charge an additional $250 fee.
Regardless of how much you pay up front, this credit can save you money over the course of 30 years.
Homebuyers help services in your area
There are additional options besides SDHDA aid to make buying a home in South Dakota easier.
GROW South Dakota, for example, has a down payment assistance program that can help qualified buyers get loans ranging from $5,000 to $10,500 to cover their upfront expenditures.
If you’re buying outside of Brown County, the organization Homes Are Possible, Inc. may be able to help with your down payment with a $4,000 grant.
If you’re looking to buy in Brown County, the organization may still be able to assist you, but you’ll have to repay the $4,000 later.
Other financing options for first-time homebuyers
Visit HUD to learn about more South Dakota homeownership initiatives, including those organized by city or county.
South Dakota First Time Home Buyers Conclusion
Are you ready to begin your house search in South Dakota? To begin, utilize the first-time homebuyer calculator provided by the state housing finance authority to determine your eligibility.
Then, to begin the loan process, you can contact one of the agency’s numerous participating banks, credit unions, or mortgage lenders.
Remember that interest rates and terms will differ between institutions, so evaluate several options to obtain the best deal that meets your needs.