Down Payment Assistance in South Dakota

What is down payment assistance in South Dakota?

South Dakota’s home prices stay well below the national average, and with no state income tax on top of that affordability, it’s one of the more buyer-friendly states in the country. Still, saving up enough for a down payment and closing costs can be a challenge no matter how affordable the market is. With the right assistance programs, homeownership across South Dakota may be more within reach than buyers expect.

Homebuyers may be able to use down payment assistance (DPA) programs to help them purchase a property. Down payment assistance is made up of national, state, local, and employer-sponsored programs designed to support homebuyers who can afford a monthly mortgage payment but need help coming up with the upfront cash needed for a down payment and closing costs.

Offered by government agencies, nonprofits, and some private organizations, DPA provides financial support to help homebuyers cover the down payment, closing costs, or both. It helps to bridge the gap between what buyers have saved and the funding they need to buy.

It may also provide homebuyers with a financial cushion, so they don’t have to drain all of their savings to afford homeownership.

From the granite spires of the Black Hills to the rolling prairie of the eastern plains, South Dakota homebuyers can tap into statewide, local, and community-based programs that help cover the upfront costs of purchasing a home.

Assistance typically comes in one of three forms: a grant (money you don’t repay), a forgivable loan (which is gradually forgiven the longer you stay in the home), or a low-interest loan. The right option depends on the program and your individual situation.

Whether you’re a first-time homebuyer in South Dakota or returning to homeownership after years away, there may be money available to help make up the difference between how much you’ve saved and the amount you need to close on a home.  

How does down payment assistance work?

Every down payment assistance program has its own rules, but most follow a similar path from homebuyers researching their options to funding.

Research. The DPA landscape is larger than most people realize. In fact, there were more than 2,700 DPA programs as of July 2026, according to Down Payment Resource, a company that connects homebuyers to the programs. Assistance may be available at the state, county, city, or employer level, and different programs have different eligibility requirements. If one program doesn’t fit your situation, keep looking. There may be others that will.

Determine your eligibility. Common requirements include income limits, minimum credit scores, and property location restrictions. Understanding your financial profile, where you want to buy, and how long you plan to live in the home will help you identify which programs are worth pursuing.

Apply. Once you find a down payment program that fits your criteria and eligibility, you’ll submit an application and supporting documents. Expect to provide proof of income, personal identification, credit information, and details about the property you intend to purchase.

Get approved and receive funding. If your application is approved and your information verified, you’ll receive the assistance at closing. It’s typically applied directly toward your down payment, closing costs, or both, depending on the program’s terms.

It is important to note that most DPA programs have their own conditions, which may include having to repay the loan in part or full if you move early, sell, or refinance the home. Make sure to always review and understand the terms and conditions of any loan you use.

Additionally, some programs may run out of funding. That’s why it’s important to check availability and stay on top of deadlines.

Who qualifies for down payment assistance?

Many people don’t realize they may be able to qualify for down payment assistance. DPA isn’t just a tool for first-time and first-generation homebuyers or those with lower incomes.

The assistance is available for a wide variety of people in a range of financial situations. Nearly two-thirds, 62%, of current DPA programs serve homebuyers earning more than $100,000 a year and 11% have no income limits, according to Down Payment Resource.

Additionally, more than a third, 38%, of DPA programs don’t have a first-time homebuyer requirement.

There are DPA programs for: First-generation homebuyers, Native American homebuyers, veterans, educators, law enforcement, first responders, municipal employees, those who earn less than a certain threshold, and more. Some programs also exist for buyers who purchase properties in certain communities.

Some organizations also offer homeownership assistance programs for their employees, so make sure you check with your employer as well.

Types of down payment assistance

The majority of DPA programs fall into two categories: Second mortgages and grants.

Second mortgages are by far the most common form of down payment assistance, making up 56% of all programs, according to Down Payment Resource. This is a separate loan running alongside your primary mortgage, with its own monthly payment.

Second mortgages are often set up to be a deferred or forgivable loan to reduce the upfront cost. If you have a deferred loan, it means that it doesn’t have to be repaid until you sell, refinance, or move out. A forgivable loan is gradually forgiven if you live in the home for a set amount of time.

Grants make up 9% of DPA programs and are the most straightforward form of assistance. They’re a gift, with no repayment required under any circumstances. As always, read the terms carefully to make sure you understand any conditions attached.

Finding down payment assistance

Down Payment Resource offers an interactive search feature that allows you to search available DPA programs by location as well as by things like your occupation, military status, or disability status.

New American Funding (NAF) also offers a down payment assistance program called Pathway to Homeownership. Specifically available to first-time homebuyers, eligible borrowers may receive up to $6,000* in financial assistance. This money can be used to help with your down payment, closing costs, or other costs. It can also be combined with other DPA programs.

National down payment assistance programs

While there is not national database of nation-wide DPA programs available, there are several main ones that are notable. They include:

The Chenoa Fund

The Chenoa Fund is administered by CBC Mortgage Agency (a federally chartered tribal housing finance authority). It is one of the most accessible national DPA programs available because it drops two of the most common barriers to qualification. It has no income limits and no first-time homebuyer requirement.

The program covers the required 3.5% down payment on Federal Housing Administration (FHA) loans. The aid is structured either as a forgivable second mortgage or a repayable second mortgage, depending on the option selected.

Borrowers need a minimum 600 credit score to qualify. The program is available in all states except New York.

Since it works through a network of participating lenders nationwide, buyers can access it through their mortgage lender rather than applying directly.

The National Homebuyers Fund

The National Homebuyers Fund (NHF) is a nonprofit organization that provides down payment and closing cost assistance of up to 5% of the loan amount. It’s administered as a grant, meaning no repayment is required.

It has no first-time homebuyer requirement, making it available to repeat buyers who may not qualify for programs with that restriction. It works with FHA, U.S. Department of Veterans Affairs (VA), U.S. Department of Agriculture (USDA), and Conventional loans.

The credit score and debt-to-income requirements are flexible.

The NHF is available in most states and is accessed through a network of participating lenders rather than through a direct application to the fund itself.

Many of the national DPA programs are offered by various lenders and private non-profit organizations like the Homeownership Council of America.

Down payment assistance programs in South Dakota

The South Dakota Housing Development Authority (SD Housing) is the state’s housing finance agency and the central source for statewide DPA programs. SD Housing doesn’t lend directly to buyers. Homebuyers apply through an approved participating lender, which will combine the assistance with the mortgage.

SD Housing Down Payment Assistance Programs

SD Housing offers several down payment and closing costs assistance programs:

SD Housing’s Fixed Rate Plus loan offers up to 3% or 5% of the first mortgage loan as down payment and closing costs assistance. The loan is provided as a 0% interest second mortgage with no payments. The loan is due if the home is sold or when the first mortgage is satisfied.

The Manufactured Housing Downpayment (MHDP) program is available to qualified homebuyers in need of down payment assistance when purchasing a manufactured home. The program provides assistance for manufactured homes that are not eligible for SD Housing’s traditional down payment assistance program. Through this program, homebuyers may receive up to 50% of their required down payment, with a maximum award of $10,000.

MHDP program details and requirements include:

• Manufactured home must be located in South Dakota, and stay in South Dakota until the first lien is paid off
• Home must be borrower’s primary residence
• Borrower must be financed with a first loan from a lender that is registered with the Nationwide Multistate Licensing System (NMLS)
• Must provide proof of financing
• Household income must be at or below 120% of area median income (AMI). This is the midpoint of local earnings for an area, calculated by the U.S. Department of Housing and Urban Development.

GROW South Dakota Down Payment Assistance Program

GROW South Dakota is a statewide nonprofit organization that offers down payment assistance to potential homebuyers purchasing a home in a rural area of South Dakota. The program is subject to eligibility requirements and income guidelines. The program is also subject to available funding

Program details and requirements include:

• Property must be located in rural part of South Dakota
• Meet program eligibility requirements and applicable income guidelines
• Contact GROW South Dakota for more information

Beyond SD Housing’s statewide programs, several South Dakota cities and counties have established their own DPA programs. Many of these can be stacked with SD Housing assistance. That means some eligible buyers may be able to combine multiple programs and significantly increase their total help.

This can help them to cover their down payment, closing costs, or simply have a little left over as a financial cushion.

Brown County down payment assistance program

Brown County sits in northeastern South Dakota, anchored by Aberdeen, a regional hub for agriculture, healthcare, and retail that serves the surrounding farm country. Home prices here stay well below the national average, and the county’s flat, open landscape reflects its roots as a farming and ranching community, giving buyers a quieter, more affordable alternative to South Dakota's bigger cities.

Brown County down payment assistance program includes:

HAPI Closing Cost Assistance: Administered by Homes Are Possible, Inc. (HAPI), this down payment and closing cost assistance program offers $5,000 as a non-forgivable loan. The funds can be used to cover origination fees, title search, insurance, survey, appraisal, and closing fees. The interest-free loan is repaid when the borrower sells the home, takes a cash-out refinance, or transfers the title.

Program details and requirements include:

• Income limit of less than or equal to 80% of AMI
• Completion of HAPI’s homeownership education course
• Signed purchase agreement required

Sisseton-Wahpeton Oyate (SWO) homebuyers assistance program

The Sisseton-Wahpeton Oyate (SWO) Homebuyers Assistance Program is administered by the SWO Housing Department for enrolled SWO Tribal members purchasing or building a primary residence. The program offers a grant for eligible down payment and closing costs of up to 20% of the purchase price, capped at $10,000. It also provides homebuyer counseling, credit assistance, site-selection support, loan-packaging assistance, and required homeownership education.

Program details and requirements include:

• Applicant must be an enrolled member of the Sisseton-Wahpeton Oyate.
• Property must be located in the Lake Traverse Reservation boundaries, or Wilmot, Watertown, and Waubay, South Dakota
• First-time homebuyers receive priority over current homeowners
• Applicants cannot own more than one home
• Applicant must submit a purchase agreement or a contract for deed
• Must attend homebuyer education course
• Must reside in the home for five years after closing or the date the down payment assistance check was issued

These are some of the down payment assistance programs available across South Dakota. However, there may be more programs available to you based on your location in the state or your occupation.

For instance, some towns or cities may offer down payment assistance specifically for first responders or teachers. Make sure to do your own research to see if there is a program that may be right for you. And be aware that certain programs may only be available until all of the funding is used.

How to apply for South Dakota down payment assistance

The application process for different DPA programs may change. However, some general application steps include:

1. Check your eligibility. Review income limits, credit requirements, and first-time buyer status at sdhousing.org. For local programs, contact the relevant city or county housing office.  
2. Find a participating lender. SD Housing programs are only available through approved lenders in their network.
3. Get pre-qualified. Your lender reviews your income, credit, and debts to determine which programs you may qualify for to receive funding.
4. Complete homebuyer education. Enroll in an approved homebuyer education course and keep your completion certificate for closing.
5. Find your home. Work with a licensed agent to locate a qualifying South Dakota property. Your lender will confirm if it meets program requirements.
6. Close on your home. Your lender packages your first mortgage and DPA together. Assistance funds are applied at settlement.

South Dakota down payment assistance FAQs

^{Program details reflect August 2026 information. Down payment assistance programs are subject to change and depend on current funding availability. Always confirm income limits, eligibility requirements, and program details with your lender or the applicable program administrator before applying.}

^{*Credit up to $6,000 maximum. Due to maximum seller concession rules applicable to purchase loan transactions, this credit could be less than $6,000 in some cases where other concessions have been made to the consumer.}