A college degree can go a long way toward advancing your career and your general quality of life. Study after study has shown the connection between household income and holding a higher education degree.
But what about buying a home? How does having a degree impact your homeownership prospects?
There are a few common misconceptions people have when it comes to student debt and how it affects purchasing a house. (Particularly in South Dakota.) Here are just a few of them.
1. Student debt slows down homeownership
One key misconception commonly held by recent graduates is that accrued debt will slow down the ability to purchase for several years. Among first-time homebuyers, 40 percent indicated they are carrying student debt at an average of $26,000. In these cases, many of these recent graduates are able to make monthly mortgage payments comfortably—especially if it is not different from what they’re currently paying for monthly rent on an apartment—but the initial purchase is delaying them. Luckily the South Dakota Housing Development Authority (SDHDA) offers a grant program to assist you in making this purchase earlier than you’d expected.
2. Saving for a downpayment is impossible
Many recent graduates report putting off purchasing a home because of an inability to save for a downpayment. In fact, 26 percent of first-timers reported downpayment saving was the most difficult aspect of homebuying, and 55 percent said their debt delayed such saving. (SDHDA’s grant program can also help alleviate this downpayment saving conundrum.)
3. There’s no assistance for me
South Dakotans have a particular benefit when it comes to college degrees and homeownership. SDHDA is currently offering recent graduates an opportunity to purchase a home in the state.
The Grants for Grads program is meant to give postsecondary graduates the chance to fund downpayment and closing costs on a purchase of a home in South Dakota. When you meet the qualifications for eligibility, you may be entitled to five percent of your loan amount for downpayment and closing costs from any participating financial lender in South Dakota.
The key takeaway here, though, is that the program is for a limited time and is first come, first serve. So act fast!
Here are the eligibility requirements to keep in mind:
- Your income – in order to meet financial guidelines for the program, you must be at a particular household income level. These levels change annually, so check out the current limits
- Your home price – to qualify for the Grants for Grads program, your home price can’t exceed $250,200.
- Your state – you won’t be eligible for Grants for Grads unless the home you’re purchasing is located in South Dakota, and it must be your primary residence. Keep in mind that you must not have owned a home in the past three years in order to qualify.
- Your degree – the definition of “recent graduate” is determined by whether or not you’ve earned your degree in the past 60 months from an accredited postsecondary educational facility that is recognized by the U.S. Department of Education—check the listing of such institutions
Want to get started?
Grants for Grads is a limited-time program, so the earlier you take advantage, the better. If you’re ready to get started or want to learn more about the application process—and you’re a recent graduate planning to live in South Dakota—click here to get started!