💵 Down Payment Assistance Programs Available in South Dakota

By Jeff Younger — Borrow Smart Mortgage Services

Introduction

One of the biggest challenges for many homebuyers in Sioux Falls and across South Dakota is saving enough for a down payment. The good news? South Dakota offers several down payment and closing cost assistance programs designed to help first-time buyers, repeat buyers, and even low-to-moderate income households achieve homeownership.

As a local mortgage expert at Borrow Smart Mortgage Services, here’s a clear breakdown of the programs available — and how they can help you buy a home sooner than you think.

1. South Dakota Housing Development Authority (SDHDA) — Down Payment Assistance (DPA)

SDHDA is the leading provider of down payment and closing cost assistance in the state. Their DPA program can be paired with FHA, VA, USDA, or Conventional loans, making it one of the most flexible options.

Key Benefits:

• Assistance ranges from 2%–5% of the loan amount

• Can be used for down payment and closing costs

• Fixed interest rate loans

• Available statewide, including Sioux Falls, Rapid City, and surrounding areas

Best For:

First-time buyers or anyone who needs help covering upfront costs.

2. SDHDA — Homeownership Assistance Program (HAP)

The HAP Grant is another powerful tool for buyers who qualify based on income and purchase limits.

Highlights:

• Grant funds that do not need to be repaid

• Can be applied toward down payment or closing costs

• Used primarily with SDHDA First-Time Homebuyer loans

Local Tip:

Many Sioux Falls buyers use HAP to cover closing costs, lowering their cash-to-close significantly.

3. USDA Rural Development Loan (0% Down)

While technically not “down payment assistance,” the USDA Rural Development Loan allows eligible buyers to purchase a home with zero down payment.

Benefits:

• 0% down required

• Low mortgage insurance costs

• Competitive fixed rates

Eligible Areas Near Sioux Falls:

• Harrisburg

• Tea

• Brandon

• Hartford

• Many rural surrounding communities

If you’re open to living just outside the city limits, USDA is a great option.

4. VA Home Loan — No Down Payment for Eligible Veterans

For South Dakota veterans, the VA loan remains one of the best zero-down mortgage programs in the country.

Advantages:

• 0% down payment

• No mortgage insurance

• Lower interest rates

• Flexible credit requirements

If you’ve served, you’ve earned this benefit — and it can save you thousands.

5. Local Lender DPA Programs (Sioux Falls Area)

Some South Dakota lenders and credit unions occasionally offer special grants or down payment programs, such as:

• $1,000–$5,000 buyer assistance grants

• Closing cost credits

• First-time buyer incentive loans

These programs vary throughout the year, so working with a local mortgage broker helps you find every available option.

6. Employer-Assisted Housing Programs

A few South Dakota employers participate in down payment support programs for employees.
These programs may include:

• Matching savings

• Forgivable loans

• Grants for home purchase

Ask your HR department if your employer participates.

How to Know Which Program You Qualify For

The best down payment assistance program depends on:

• Your income

• The price of the home

• Where the home is located (city vs. rural)

• Your credit score

• Whether you’re a first-time buyer

• Whether you’re a veteran

During a consultation, I help you compare programs side-by-side and calculate your exact cash-to-close — so you know exactly what to expect.

Why Down Payment Assistance Matters

Using assistance can help you:

• Buy a home sooner

• Reduce upfront costs

• Keep more money in savings

• Improve financial security

• Potentially qualify for better loan terms

For many Sioux Falls buyers, down payment assistance is the difference between waiting years and buying today.

Ready to See What You Qualify For?

If you're buying in Sioux Falls or anywhere in South Dakota, I can help you review every available down payment assistance program and find the best loan option for your budget.

📞 Call or Text: 605-982-7947
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