The SDHDA Downpayment Assistance (DPA) program, offered by the South Dakota Housing Development Authority (SDHDA), helps first-time and repeat homebuyers in South Dakota overcome one of the biggest obstacles to homeownership: the down payment. Through a low-interest second mortgage or forgivable grant, this program reduces upfront costs and makes homeownership more achievable across the state.
❓ What Is the SDHDA Downpayment Assistance Program?
SDHDA’s DPA is designed to work in conjunction with the First-Time Homebuyer Loan or other SDHDA mortgage programs. Eligible buyers can receive up to 3% of the loan amount to use toward down payment or closing costs. The assistance can be structured as either:
- 💲 A low-interest second mortgage loan, repaid over time
- 🆓 A forgivable grant, depending on income eligibility and available funding
✅ Who Qualifies for SDHDA DPA?
To be eligible for SDHDA Downpayment Assistance, you must:
- 👨👩👧👦 Be a first-time homebuyer or have not owned a home in the past 3 years
- 🏡 Purchase a home in South Dakota to use as your primary residence
- 📉 Meet income and purchase price limits set by SDHDA
- 📘 Complete a homebuyer education course
- 💼 Work with a participating SDHDA lender
💵 Benefits of SDHDA Downpayment Assistance
- 💲 Receive up to 3% of the loan amount in assistance
- 📉 Reduce out-of-pocket expenses at closing
- 🔁 Flexible repayment terms or forgivable grant options
- 🔗 Combine with Mortgage Credit Certificates (MCC) and other SDHDA programs
📈 Why Use SDHDA DPA in South Dakota?
In many South Dakota towns—from Sioux Falls to Rapid City—home prices remain affordable compared to the national average. However, for many buyers, the challenge isn’t affording monthly payments, but saving enough for the initial costs. That’s where SDHDA’s assistance makes the difference.
Whether you’re a young professional, a family transitioning from renting, or a retiree downsizing, SDHDA’s Downpayment Assistance helps you access stable, affordable housing with fewer financial hurdles.
📝 How to Apply for SDHDA DPA
- 📞 Contact an SDHDA-approved lender near you
- 🧾 Apply for a SDHDA mortgage loan (such as the First-Time Homebuyer Loan)
- 🎓 Complete the homebuyer education course (available online or in person)
- 📂 Submit required income, employment, and ID documentation
- 🏠 Close on your home and receive your DPA at the time of settlement
📋 Program Requirements
- 📊 Minimum credit score typically required is 620
- 📝 Debt-to-income ratios must meet SDHDA guidelines
- 📍 Property must be located in South Dakota and meet habitability standards
- 📘 Homebuyer education completion is mandatory
🔁 How Forgivable Assistance Works
Some applicants may qualify for forgivable grants if they meet income limits. These grants do not require repayment if you remain in the home for a set number of years—typically between 3 and 5 years. If you move earlier, a prorated amount may be due.
💡 Tips to Strengthen Your Application
- 📋 Choose a lender with experience handling SDHDA loans and grants
- 📆 Start the homebuyer education course early—it’s required
- 🧾 Prepare your W2s, pay stubs, and credit documentation in advance
- 📞 Ask your lender if you also qualify for SDHDA Closing Cost Assistance
🔍 Example Use Case
James and Sarah, a couple living in Brookings, wanted to buy their first home. They were approved for an SDHDA mortgage and used the DPA program to receive $5,400 in assistance, covering almost all of their down payment. Because they met the income limits, their DPA was structured as a forgivable grant—no repayment needed after 5 years.
❓ FAQs – SDHDA Downpayment Assistance
📌 Is repayment required?
It depends. If you receive assistance as a loan, you’ll repay it over time. If you qualify for a grant, and stay in the home for the required term, it is fully forgiven.
🔗 Can I use SDHDA DPA with other programs?
Yes! SDHDA allows you to combine DPA with MCCs and local municipal programs, depending on your location.
📊 What are the income limits?
They vary by county and household size. You can check the updated limits at SDHDA’s website or through your lender.
🏡 What property types qualify?
Eligible properties include single-family homes, condos, and townhomes. Manufactured homes may qualify with additional requirements.
🎯 Is SDHDA DPA Right for You?
The SDHDA Downpayment Assistance program is a valuable tool for buyers who are ready to purchase but struggle with upfront costs. With flexible structures, forgivable options, and state-backed support, it opens the door to affordable, sustainable homeownership across South Dakota.
📥 Apply Now at SDHDA Official Website