Top Mortgage Assistance Programs in South Dakota

A recent study by Fannie Mae revealed a surprising lack of confidence among consumers about the mortgage process.

There’s good reason to feel a little cautious. Here in the Valley, home prices have risen 59% since 2020, and mortgage rates have also climbed. However, homeownership remains a top priority for most, with many considering it a sound long-term investment.

All of this can lead to feeling overwhelmed and unsure of your ability to qualify for a home loan. The good news is there are options available—options you may not even be aware of. 

So today, we’ll discuss some different mortgage resources available here in the Black Hills.

Challenges When Navigating the Mortgage Process

Fannie Mae’s study found that many consumers are unaware of important aspects of the mortgage process, which creates additional hurdles. 

Here are the top three challenges consumers face due to knowledge gaps:

• Lack of confidence: Less than half (45%) of consumers would feel confident going through the mortgage process. That number drops to 38% for those who are actively home shopping.

• Overestimating minimum down payment: 90% of consumers either don’t know or overestimate the minimum down payment required for a typical mortgage.

• Misestimating minimum credit score: Only 32% of consumers know the approximate minimum credit score required by mortgage lenders (the FICO minimum score required is 620). The remaining either overestimate or underestimate this number. 

The study also found that just 32% are “somewhat” or “very” familiar with low down-payment programs, and 40% are aware of mortgage counseling services available. 

To make sure that you have all the information you need, keep reading for mortgage resources available here in Arizona. 

Mortgage Resources in South Dakota

Low Down Payment Assistance Programs

You may know that a 20% down payment isn’t required, but how low can you go? In some cases, as low as 0-3% down. Here are some programs available in SD:

• FHA Loan

  • Federal Housing Administration (FHA) loans are popular for first-time homebuyers, offering low down payments and more flexible credit requirements.

• VA Loan

  • Veterans Affairs (VA) loans are available to military service members, veterans, and eligible surviving spouses, offering no down payment options and favorable terms.

• USDA Loan

  • United States Department of Agriculture (USDA) loans are available to eligible rural and suburban homebuyers, offering no down payment options.

• South Dakota Housing Development Authority (SDHDA) Programs

  • SDHDA offers various loan programs, including the First-Time Homebuyer Program, which provides low down payment options and assistance for first-time homebuyers.
• HomeReady Mortgage
  • Fannie Mae’s HomeReady mortgage program offers low down payments, flexible underwriting, and homeownership education for low-to-moderate income borrowers.

• Home Possible Mortgage

  • Freddie Mac’s Home Possible mortgage program is designed for low-to-moderate income borrowers, offering low down payment options and flexible credit requirements.

• Good Neighbor Next Door

  • The Good Neighbor Next Door program offers substantial discounts for law enforcement officers, teachers, firefighters, and emergency medical technicians to purchase homes in revitalization areas.

• WISH Program

  • The Workforce Initiative Subsidy for Homeownership (WISH) Program offers down payment assistance to eligible low-to-moderate income first-time homebuyers.

• Rural Development Loans

  • USDA Rural Development Loans provide low down payment options for eligible rural homebuyers, offering affordable financing solutions.

• Reach out to a lender you work with to explore each option to find the best fit for your needs.  No lender? email us for a list of local lenders. 

Mortgage Counseling Services

Housing counseling or mortgage counseling services are also available to help you prepare your finances and get ready for the costs of home ownership. 

• Freddie Mac Borrower Help Centers (select your region for a list): https://myhome.freddiemac.com/resources/working-with-freddie-mac-borrower-help-centers

• Search for HUD’s participating housing counseling agencies in your area here: https://answers.hud.gov/housingcounseling/s/?language=en_US

Professional Lenders

Reading about these programs and services online is one thing, but I always recommend speaking with a knowledgeable, trusted professional to gain a deeper understanding of all the resources available to you. Let me know if you’d like my list of vetted mortgage lenders, and I’ll send them right over. 

Remember, the key to a successful homebuying experience is knowledge and preparation. By getting the right support system in place, you can turn your dream of homeownership into a reality.