South Dakota

First-time home buyer programs in South Dakota (Sioux Falls)

South Dakota Housing: price limit $410,000, income limit $118,700 or $136,505 in Minnehaha County, down payment help of 3% or 5% of the loan.

Checked on against the official sources listed at the bottom of the page.

In short

South Dakota Housing (SD Housing), the state’s housing finance agency, offers first-time buyers a 30-year fixed-rate mortgage for homes priced at $410,000 or less, with income limits in Minnehaha County of $118,700 (one or two people) or $136,505 (three or more). A 0% second mortgage can add 3% or 5% of the loan for the down payment and closing costs. A tax credit worth up to $2,000 a year is also available.

What South Dakota Housing offers

SD Housing does not lend directly. You apply through a participating lender, and the agency keeps a lender list and an eligibility quiz on its website. According to SD Housing, you qualify as a first-time buyer if:

  1. You have not owned a home in the past three years. A mobile home that was not permanently affixed to a foundation does not count as prior ownership, and the agency has a Veterans Waiver for veterans.
  2. Your income is at or below the program’s income limit for your county.
  3. The purchase price is $410,000 or less.

The loans come in four forms, all 30-year fixed-rate:

LoanWhat it does
Fixed-RateThe standard loan, with the agency’s most competitive rate
Fixed-Rate Buy DownYou pay a 1% discount point at closing for a lower rate
Fixed Rate Plus 3%Adds help equal to 3% of the loan, as a second mortgage
Fixed Rate Plus 5%Adds help equal to 5% of the loan, as a second mortgage

The help in the Fixed Rate Plus loans is a 0% second mortgage with no payments and no additional fees. According to SD Housing, it is due when you sell, refinance or pay off the first mortgage. The first mortgage carries a slightly higher rate to account for that help.

Rates posted on September 29, 2026

LoanFHA, VA, USDAConventional
Fixed Rate Buy Down (1 point)6.125%6.625%
Fixed Rate6.375%6.750%
Fixed Rate Plus 3%6.625%7.125%
Fixed Rate Plus 5%6.875%7.375%

Source: SD Housing, rates effective September 29, 2026 at 9:00 AM CT, first-time homebuyer columns. Rates change without notice and are not a commitment to lend.

A worked example

On a first mortgage of $300,000 (an illustration, not a typical loan), the Fixed Rate Plus 3% option adds a second mortgage of $9,000 and the 5% option $15,000. In the table above, the 5% option on an FHA, VA or USDA loan carries a rate 0.5 point higher than the plain fixed rate (6.875% against 6.375%). Ask your lender to compare the monthly payment with and without the help.

Income and price limits in Sioux Falls

The limits depend on the county and the household size. SD Housing’s table effective May 30, 2026 lists Minnehaha County, where Sioux Falls sits:

Household sizeMaximum income, Minnehaha CountyPrice limit
1 or 2 people$118,700$410,000
3 or more people$136,505$410,000

Source: SD Housing, income limits effective May 30, 2026; price limits effective April 30, 2025.

Repeat buyers and buyers in “targeted areas” have higher limits: $124,080 (two or fewer) or $144,760 (three or more) and a price limit of $460,000. SD Housing says targeted areas include parts of Minnehaha County; ask your lender whether your address is one. The repeat-buyer loan also requires a minimum credit score of 620.

For comparison, the median value in Sioux Falls is $332,600 (Census ACS 2024; see home prices in South Dakota and Sioux Falls). The price limit is well above it, but the median is an owner’s estimate, not a sale price.

The SD Housing Tax Credit (mortgage credit certificate)

The Mortgage Credit Certificate (MCC) turns part of your mortgage interest into a federal tax credit. According to SD Housing:

  • The credit is capped at $2,000 per year. The rest of the interest can still be deducted.
  • It is for first-time buyers with income and price within the limits ($410,000, or $460,000 in a federally designated target area).
  • You must apply through a participating lender when you apply for the mortgage. It cannot be added after closing.
  • There is a one-time $250 Tax Credit Fee.
  • You claim it each year with IRS Form 8396. An unused part can be carried forward for up to three years.
  • It works with conventional, FHA, USDA and VA loans, and cannot be used to refinance.

Other state help

  • Homebuyer education. SD Housing says its network of HUD-approved agencies holds over 200 classes a year, in groups, one-on-one or online. A Sioux Falls agency is on its partner list.
  • Governor’s House. SD Housing sells two- and three-bedroom homes at $89,000 and $99,000 (excluding tax) to buyers with income of $103,400 or less and limited net worth. You must secure a lot, and the agency says new orders take about 18 months to deliver.

Programs from the City of Sioux Falls

The City of Sioux Falls lists its homeowner programs on its Housing Programs page. The programs on that page are aimed at repair and rebuilding, not at the purchase itself:

ProgramWhat it doesIncome limit
Neighborhood RevitalizationThe city funds Affordable Housing Solutions, which repairs vacant or deteriorated homes in core neighborhoods for owner-occupant buyers80% of area median family income
Single-Family RehabilitationA deferred, no-interest repair loan, repaid when you sell or stop living in the home; requires one year of ownership80% of area median family income

Source: City of Sioux Falls housing program pages.

The city’s income table, effective June 1, 2026, sets the 80% level at $66,500 for one person and $94,950 for four. The Neighborhood Revitalization page does not state a dollar amount of help, and the repair loan is only for people who already own their home. The page does not describe a general down payment program; for current terms, contact the city’s Housing and Neighborhoods office at 605-367-8180.

How to apply

  1. Take SD Housing’s eligibility quiz, or pick a participating lender from its list.
  2. Ask the lender for pre-approval. It reviews your credit, income and debt.
  3. Choose the loan: plain fixed rate, buy down, or Fixed Rate Plus. Ask about the MCC at the same time.
  4. Make an offer on a home within the price limit. After you are under contract, the lender asks for the property details.

Closing costs still apply with any program; see our guide to closing costs in South Dakota and our page on buying a home in Sioux Falls. For the national picture, read the steps of buying a home and our guides to FHA loans and private mortgage insurance.

Frequently asked questions

Who counts as a first-time buyer in South Dakota?

According to SD Housing, someone who has not owned a home in the past three years. A mobile home not permanently affixed to a foundation does not count as prior ownership, and the agency has a waiver for veterans.

How much down payment help can I get?

The Fixed Rate Plus loan adds 3% or 5% of the first mortgage as a 0% second mortgage with no payments. It is due when you sell, refinance or pay off the first mortgage.

What is the income limit in Sioux Falls?

For Minnehaha County, SD Housing’s table effective May 30, 2026 shows $118,700 for households of one or two and $136,505 for households of three or more. The purchase price cannot exceed $410,000.

How much does the tax credit save?

Up to $2,000 a year in federal tax, according to SD Housing, for first-time buyers who apply through a participating lender before closing. There is a $250 fee, and your actual saving depends on your mortgage interest and tax.

Does the City of Sioux Falls offer down payment help?

The programs on the city’s Housing Programs page fund repairs, not the purchase, and the page describes no general down payment program. Call the Housing and Neighborhoods office at 605-367-8180 for current terms.

Compare with the other states: First-time home buyer programs by state.

More South Dakota guides

Sources

South Dakota · All states · Federal guides