South Dakota Down Payment Assistance Program (DPA) Guide

Guide to the South Dakota Down Payment Assistance Program (DPA)

The South Dakota Down Payment Assistance Program (DPA) is designed to help eligible homebuyers cover the upfront costs of purchasing a home. By providing financial assistance for down payments and closing costs, this program makes homeownership more accessible for first-time buyers and others who meet program criteria. Below is a detailed guide to the program’s features, eligibility requirements, and application process for 2025.

1. Program Overview:

• Purpose: The DPA Program provides financial assistance to reduce the initial financial burden of buying a home, helping more individuals and families achieve homeownership.
• Assistance Amount: Eligible buyers can receive up to 3% of the home’s purchase price to help cover down payment and closing costs.
• Repayment Terms: The assistance is provided as a second mortgage with deferred repayment. Specific terms, such as forgiveness over time, may vary by loan type.

2. Eligibility Requirements for 2025:

To qualify for the South Dakota Down Payment Assistance Program, applicants must meet the following criteria:

• First-Time Homebuyer: The program is primarily for first-time buyers, defined as individuals who have not owned a home in the past three years. Exceptions may apply for buyers in targeted areas.
• Income Limits: Household income must fall within program limits, which vary based on location and household size. These limits are updated annually.
• Credit Score: A minimum credit score of 640 is typically required. Additional lender-specific guidelines may apply.
• Property Requirements: Eligible properties must be located in South Dakota, used as the buyer’s primary residence, and meet program price limits.
• Loan Type: Applicants must qualify for a compatible first mortgage, such as those offered through South Dakota Housing Development Authority (SDHDA).

3. How to Apply:

Follow these steps to apply for the South Dakota Down Payment Assistance Program:

• Assigned Loan Officer: After starting your application, a loan officer will be assigned to assist you. They will verify your eligibility, explain the program details, and guide you through each step of the application process.
• Prepare Required Documentation: Gather necessary documents, including proof of income, tax returns, credit history, and property details.
• Submit Your Application: Work closely with your assigned loan officer to complete the application and provide all required documentation. They will process your application and notify you of approval status.

4. Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete a homebuyer education course. This course provides essential information on budgeting, understanding mortgages, and managing homeownership responsibilities.
• Course Availability: The course can be taken online or in person. Upon completion, participants receive a certificate to include with their application.

5. Down Payment and Closing Cost Assistance:

• Assistance Amount: Buyers can receive up to 3% of the purchase price to help with down payment and closing costs, significantly reducing upfront expenses.
• Forgiveness Terms: In some cases, the assistance may be forgivable over time, depending on program guidelines and the type of first mortgage used.

6. Finalizing the Loan:

• Approval Process: Once approved, your assigned loan officer will guide you through the final steps, including reviewing loan terms, signing documents, and preparing for the closing process.
• Closing Costs: While the program helps cover significant upfront costs, buyers may still need to pay certain expenses. Your loan officer will provide a detailed breakdown of these costs.

The South Dakota Down Payment Assistance Program is an excellent resource for eligible homebuyers, offering financial support to make homeownership more attainable. By reducing upfront costs and providing affordable mortgage options, this program helps South Dakota residents achieve their homeownership goals. Begin your journey with the South Dakota Down Payment Assistance Program in 2025.