Bootcamp For Buyers

South Dakota Down Payment Assistance Program (DPA)

The South Dakota Down Payment Assistance Program (DPA), administered by the South Dakota Housing Development Authority (SDHDA), is designed to help eligible homebuyers reduce upfront costs associated with purchasing a home. This program offers financial assistance for down payments and closing costs, making homeownership more attainable for low- and moderate-income residents across South Dakota.

Benefits

  • Provides up to 3% of the loan amount in financial assistance for down payments and closing costs, reducing the buyer’s initial financial burden.
  • Assistance is structured as a second loan with a low-interest rate, repayable over a 10-year term.
  • Can be combined with the South Dakota First-Time Homebuyer Loan Program or other SDHDA mortgage options for comprehensive financial support.
  • Supports both first-time and repeat homebuyers who meet program eligibility criteria.
  • Promotes long-term housing stability and equity building for eligible participants.

Eligibility Requirements

  • Applicants must qualify for an SDHDA first mortgage to access the DPA benefits.
  • Income limits apply and vary based on household size and the location of the property within South Dakota.
  • The property must be located in South Dakota and used as the buyer’s primary residence.
  • A minimum credit score of 620 is required, with lender-specific underwriting criteria also applicable.
  • Participants must complete an SDHDA-approved homebuyer education course to ensure preparedness for homeownership.

Additional Information

The South Dakota Down Payment Assistance Program (DPA) is a critical resource for individuals and families seeking to reduce the financial barriers to homeownership. By providing targeted financial assistance, the program empowers eligible buyers to achieve stable housing and invest in their futures. Administered by the South Dakota Housing Development Authority, this initiative strengthens communities and promotes sustainable homeownership throughout the state.

Frequently Asked Questions About Our Program

What is the South Dakota Down Payment Assistance Program (DPA)?

The South Dakota Down Payment Assistance Program (DPA) helps eligible homebuyers cover upfront costs, including the down payment and closing expenses, making homeownership more affordable.

How much assistance can I receive through the DPA program?

Qualified applicants may receive up to 3% of the home’s purchase price or loan amount to cover down payment and eligible closing costs.

Who is eligible for the DPA program?

Eligibility is based on income limits, creditworthiness, and whether the applicant meets program-specific criteria. First-time and repeat homebuyers may qualify under certain conditions.

Do I need to be a first-time homebuyer to qualify for the DPA program?

No, while the program is designed for first-time homebuyers, repeat buyers may qualify if purchasing in targeted areas or meeting specific criteria.

What are the income limits for the DPA program?

Income limits vary by county and household size to ensure assistance is targeted at low-to-moderate-income families. These limits are updated annually.

What types of properties are eligible for this program?

Eligible properties include single-family homes, townhouses, condominiums, and manufactured homes that meet program guidelines and are permanently affixed to a foundation.

What is the minimum credit score required to qualify?

Applicants typically need a minimum credit score of 640, although higher scores may improve eligibility for certain program options.

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Does the DPA assistance need to be repaid?

Some assistance is provided as a forgivable loan, which does not need to be repaid if you meet residency requirements, such as staying in the home for a set number of years.

Can the assistance be used for both the down payment and closing costs?

Yes, the assistance can be applied to cover both the down payment and eligible closing costs, reducing the upfront financial burden for buyers.

Is homebuyer education required to qualify?

Yes, completing a homebuyer education course is mandatory to ensure buyers are prepared for the financial and practical responsibilities of homeownership.

What is the maximum purchase price allowed under this program?

As of 2025, the maximum allowable purchase price varies by county but generally ranges from $300,000 to $500,000, depending on program requirements.

Are there restrictions on where the property must be located?

Yes, the property must be located within South Dakota and meet the program’s eligibility criteria for location and type.

Can the program be used for newly constructed homes?

Yes, the DPA program can be applied to newly constructed homes, provided they meet all eligibility and purchase price requirements.

Are there debt-to-income (DTI) ratio requirements?

The maximum DTI ratio is generally 45%, though exceptions may be made for applicants with strong credit profiles or compensating factors.

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Are there any fees associated with the DPA program?

Standard loan fees, such as origination and processing fees, may apply. Buyers should discuss potential fees with their lender during the application process.

Can the DPA program be combined with other assistance programs?

Yes, the DPA program can often be combined with state, local, or federal assistance programs to maximize benefits for eligible homebuyers.

How does the forgivable loan option work?

The forgivable loan requires the buyer to remain in the home for a set period, such as 10 years. If this condition is met, the loan is forgiven and does not need to be repaid.

Can this program be used with FHA, VA, or USDA loans?

Yes, the assistance can be applied to FHA, VA, USDA, and conventional loans as long as they align with the program’s requirements.

What are the benefits of the South Dakota DPA program?

The program reduces the financial barriers to homeownership by providing funds for upfront costs, offering affordable loans, and supporting buyers with education and resources for long-term success.

What is the process for applying to the DPA program?

Applicants must work with an approved lender who will verify eligibility, complete the application, and guide them through securing the assistance.

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