Mortgage in South Dakota
South Dakota is famous for Mount Rushmore, a popular tourist destination since its opening back in 1941. It's also a state with a vibrant economy, beautiful scenery, and a laid-back lifestyle. There's a good reason it ranked the 9th best state for overall wellbeing ! On top of that, housing costs in South Dakota are below the national average, so becoming a homeowner there is a little easier. If you're thinking of buying a home or condo in South Dakota, try our South Dakota mortgage calculator to get a clear sense of what you could pay per month.
Mortgage Options in South Dakota
Prospective homebuyers in South Dakota can choose from three primary types of mortgages.
- South Dakota conventional mortgage: Because South Dakota has below-average housing costs, many people buy a property that fits within a conforming loan (i.e., one valued at less than about $550,000). For these conventional mortgages, banks require a minimum credit score of 620 and a minimum down payment of 3%. However, the more you have, the better your chances of approval!
- South Dakota FHA mortgage: Both present and future South Dakotans can take advantage of FHA loans. These loans require as little as 3.5% down with a credit score of 580 or above. If your credit score falls between 500 and 579, homeownership is still possible — you'll just need 10% down to get an FHA mortgage.
- South Dakota VA mortgage: Those who serve or have served in the military have access to one of the best mortgage offerings. Backed by the VA, these loans require as little as 0% down and have no private mortgage insurance. They do, however, typically require a minimum credit score of 660.
Those aren't your only options, though. If you're a first-time homebuyer, the state offers additional assistance.
First-Time Home Buyer Programs in South Dakota
The South Dakota Housing Development Authority offers a few programs to help first-time homebuyers acquire their first property.
The First-Time Homebuyer Mortgage program provides low-interest fixed-rate loans.
Eligibility Criteria: Borrowers must meet income restrictions. The purchase price cannot be more than $275,000.
South Dakota's Down Payment Assistance program offers 3% to help with the costs of obtaining your mortgage. This loan is a forgivable, 0% interest rate second mortgage.
Eligibility Criteria: Borrowers must qualify for one of SDHDA's fixed-rate loan offerings.
The Governor's Home Program is unique to South Dakota. It offers low-cost homes to those who meet the eligibility criteria. A 2-bedroom style home costs $50,200, while a 3-bedroom home costs $57,900. The program's goal is to give lower-income families a dwelling to call their own!
Eligibility Criteria: Borrowers must meet relatively strict income restrictions. The home must become their only residence. Finally, the program also has net worth restrictions.
South Dakota Mortgage Calculator: How Much Will a Home Cost You?
With this information in mind, use our South Dakota mortgage calculator to see how much a home will cost you. With below-average living costs and an above-average job market, you'll likely find that a move to South Dakota suits your pocketbook!
