The South Dakota Housing Development Authority is starting a temporary program to give down-payment assistance to homebuyers.
The authority will launch its Give Me Five program on Nov. 2, lending qualifying homebuyers a down payment equal to 5% of their mortgage. Recipients are not required to make payments on the down-payment loan, and it’s forgiven after five years if recipients stay in the home and meet other program requirements.
To qualify for the program, buyers must not have owned a home in the past three years, and must have a family income less than maximums ranging from $103,400 to $144,760 (depending on the county and family size). The maximum home purchase price is $410,000.
The program will be available for a limited time through participating lenders. The authority has authorized up to 2,500 loans.
The program is funded through surplus revenue generated by the authority’s existing First-Time Homebuyer Program. It uses tax-exempt bonds to finance mortgages at low interest rates.
The authority is a self-supporting nonprofit created by state government. Executive Director Chas Olson said the authority has enough revenue to offer the additional incentive. In the past, the authority has offered other incentives, such as the Grants for Grads program that helped college graduates buy their first home.
“In today’s challenging housing market, first-time homebuyers need every advantage they can get,” Olson said in a statement.
That challenging market includes mortgage interest rates above 7% and a median list price of $375,000 in South Dakota, up from about $240,000 five years ago.
This story first appeared in the South Dakota Searchlight. Read the original here.