It’s always good to have options – that’s why South Dakotans should count themselves lucky. When it comes to purchasing or upgrading a new home there are choices residents have in borrowing.
As lenders, here are four of those options that you should share with your customers interested in homeownership.
When it comes to first-timers, the first stop is the SDHDA First-Time Homebuyer Program. It’s specifically designed to outfit those who are new to the home-purchasing concept with the tools they need to find homes they can afford and love. There are income and purchase-price restrictions for participants, which makes it a great fit for South Dakotans seeking a quality starter home with a financial boost.
SDHDA also offers an enhancement to the First-Time Homebuyer Program with the addition of a Mortgage Credit Certificate (MCC). With SDHDA’s Tax Credit (MCC), a percentage of the homebuyer’s mortgage interest paid can be used as a dollar-for-dollar reduction in their tax bill and the remaining interest paid is still eligible for the home mortgage interest deduction.
Sometimes buying a home for the second or third time might require a little help, as well. That’s what the SDHDA Repeat Homebuyer Program aims to provide, giving assistance to those buying a home for the second (or more) time. These loans come with a low, fixed rate and reduced mortgage insurance, so if income and credit requirements are met, it’s a great fit for those subsequent homebuyers and first-timers who don’t meet the requirements of the First-Time Homebuyer Program.
Not all of the available loan options here in South Dakota are for funding a home purchase – some are for funding a part of the purchase. When it comes to saving up for a downpayment, it can be a tall order for some potential homebuyers. The SDHDA Fixed Rate Plus loan offers up to three percent of the loan amount as gifted funds to pay for a downpayment – it doesn’t need to be repaid but tacks on a slightly higher interest rate. It’s a great fit for your customers who are hesitant to buy because of the money down.
Existing homeowners might also be a good fit for our home improvement loan program. The Community Home Improvement Program, or “CHIP,” is meant to offer up homeowners the opportunity to make repairs and improvements to their existing properties if they meet certain income standards. Improvements may include paving, heating and cooling, flooring, roofing and many others. The interest rates vary depending on the county in which the home is located and housegold income. The life of the loan ranges as long as 10 years and the loan amount ranges between $500 and $25,000.
Whatever the stage of the homebuying process your customers are at, there are potential loan opportunities if they lack the seed money to get things moving – tell your customers about these SDHDA programs so they’ll be saying “home sweet home” sooner rather than later!