South Dakota First-Time Home Buyer Guide 2026
SD Housing’s First-Time Homebuyer program explained, the 3% and 5% down payment and closing cost assistance and how it is repaid, the Repeat Homebuyer program, and county-by-county income limits with the $410,000 purchase price limit.
SD Housing First-Time Homebuyer Program
SD Housing’s First-Time Homebuyer program provides low-interest-rate, 30-year fixed-rate mortgages through participating lenders across South Dakota, for buyers building a home or purchasing an existing one.
| Requirement | First-Time Homebuyer Program |
|---|---|
| Buyer | Has not owned a home in the past 3 years; a home not permanently affixed to a foundation, such as a mobile home, does not count |
| Veterans | SD Housing offers a Veterans Waiver — ask your lender whether you qualify |
| Income | At or below SD Housing’s limit for your county (see below) |
| Purchase price | $410,000 or less |
| Loan type | Government (FHA, VA or USDA Rural Development) or conventional |
| Term | 30-year fixed rate |
| Credit score | 620 minimum (SD Housing’s current minimum) |
| Down payment | Depends on the mortgage insurance; usually around 3% of the loan amount and up |
SD Housing does not lend directly to consumers. You apply through one of its participating lenders, which qualifies you and makes the loan.
SD Housing Down Payment and Closing Cost Assistance
SD Housing offers four ways to structure a first-time homebuyer loan. Two of them add assistance for the down payment and closing costs.
| Option | What It Does |
|---|---|
| Fixed-Rate Buy Down | Pay a 1% discount point at closing to lower the interest rate |
| Fixed-Rate | Standard 30-year fixed rate; SD Housing’s most competitive rate, with no assistance |
| Fixed Rate Plus 3% | Assistance equal to 3% of the loan amount for the down payment and closing costs |
| Fixed Rate Plus 5% | Assistance equal to 5% of the loan amount — SD Housing’s maximum |
| Term | Fixed Rate Plus 3% and 5% |
|---|---|
| Form | Second mortgage |
| Interest | 0% |
| Repayment | Due when you sell or refinance, or when the first mortgage is satisfied |
| Trade-off | Interest rate is slightly higher than on the standard fixed-rate loan |
Because the assistance is repaid in full when you sell or refinance, it reduces your equity at that point even though it costs nothing month to month. Confirm current terms with South Dakota Housing.
Other SD Housing Options
Buyers who are not first-time buyers, or whose income or price is above the first-time limits, can look at SD Housing’s Repeat Homebuyer program.
| Repeat Homebuyer Program | Detail |
|---|---|
| Who it is for | Repeat homebuyers within its limits, and first-time buyers who exceed the first-time homebuyer requirements |
| Income limit | $124,080 for 2 or fewer; $144,760 for 3 or more |
| Purchase price limit | $460,000 for a single-family home |
| Prior SD Housing loan | Not required, but any prior SD Housing mortgage must be paid off |
| Refinancing | Cannot be used to refinance an existing mortgage |
| Recapture tax | Does not apply |
The Repeat Homebuyer income and price limits also apply in SD Housing’s targeted areas: Buffalo, Jackson and Todd Counties and parts of Lyman, Minnehaha, Oglala Lakota and Pennington Counties.
SD Housing First-Time Homebuyer Income Limits
SD Housing sets first-time homebuyer income limits by county for households of 2 or fewer and 3 or more, effective May 30, 2026. The purchase price limit is $410,000 for existing homes and new construction.
| County | 2 or Fewer | 3 or More |
|---|---|---|
| Stanley | $119,800 | $137,770 |
| Lincoln, McCook, Minnehaha, Turner | $118,700 | $136,505 |
| Brookings, Marshall | $112,200 | $129,030 |
| Hand, Hughes | $109,900 | $126,385 |
| Douglas | $109,700 | $126,155 |
| Campbell | $107,800 | $123,970 |
| Hyde | $106,600 | $122,590 |
| Brown | $106,400 | $122,360 |
| Hutchinson | $105,600 | $121,440 |
| Clay | $105,100 | $120,865 |
| Butte | $104,900 | $120,635 |
| Sully | $104,300 | $119,945 |
| Jerauld | $104,100 | $119,715 |
| Faulk | $103,700 | $119,255 |
| All other counties | $103,400 | $118,910 |
Limits are from SD Housing’s income and purchase price limits. SD Housing uses annualized gross income from all sources; overtime, bonus and commission pay are averaged over the past year and year to date.
Who Qualifies in South Dakota
SD Housing layers its own rules on top of whatever first mortgage you use. You have to clear both.
| Requirement | Detail |
|---|---|
| First-time buyer | No home owned in the past 3 years, unless the Veterans Waiver applies |
| Income | County limits for first-time buyers; $124,080 or $144,760 for Repeat Homebuyer |
| Purchase price | $410,000 first-time; $460,000 Repeat Homebuyer |
| Credit score | 620 minimum |
| Homebuyer education | Required only with a conventional mortgage; available online or in person and free |
| Property | The residence and the land needed to maintain it; the land cannot produce income, and outbuildings cannot be financed |
| Lender | Through one of SD Housing’s participating lenders |
South Dakota First-Time Home Buyer Steps
| Step | What Happens |
|---|---|
| 1. Check the limits | Find your county’s income limit and keep your price within $410,000 |
| 2. Choose a participating lender | SD Housing loans are made through its participating lenders |
| 3. Ask about the Veterans Waiver | If you have owned a home recently and served |
| 4. Pick the option | Fixed-Rate, Buy Down, or Fixed Rate Plus 3% or 5% |
| 5. Get pre-approved | The lender reviews your income, credit and debts |
| 6. Make an offer and close | Homebuyer education first if your loan is conventional |
Compare the assistance against your savings plan. It carries no interest, but it is repaid when you sell or refinance.
