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Reasons to Offer the First-Time Homebuyer Loan Program

Posted by South Dakota Housing Authority on Jul 7, 2016 3:40:32 PM

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“Do I really need one more thing?”

That’s a question we hear from a lot of lenders.

Banks and credit unions have a wide breadth of loan and mortgage offerings, and it’s easy to feel like they are offering everything their clients need. But there are some things that the First-Time Homebuyer Loan Program offers that other programs may not.

Below are the top reasons to consider offering the First-Time Homebuyer Program to your lending customers.

Low Credit Scores

SDHDA offers one of the lowest credit scores in the industry – our First-Time Homebuyer Program only requires a minimum credit score of 620. Even with this low credit score requirement, we have maintained low delinquency rates.

Downpayment and Closing Cost Assistance

SDHDA is one of the few entities that provides downpayment and closing cost assistance in conjunction with the first mortgage. SDHDA will provide a three percent gift in exchange for a slightly higher interest rate.

Mortgage Credit Certificate (MCC)

We offer first-time homebuyers a mortgage credit certificate worth as much as $2,000 a year in tax savings! This gift can help homebuyers save a large amount of money over the lives of their loans. The SDHDA Tax Credit costs only $250, and lenders are able to charge an additional $250 processing fee.

Competitive Interest Rates

SDHDA offers 30-year fixed-rate loans at competitive interest rates – often to South Dakotans with little or no downpayment.

Minimal Secondary Market Overlays

Unlike other programs, we do not require additional overlays. In many cases, these may restrict the first-time homebuyer from qualifying. We attempt to make our loans as available as possible to all those who need them.

No Hidden Fees

SDHDA has no hidden fees – our costs include one percent origination fee, prepaid items and usual and customary closing costs.

No Prepayment Penalties

We never charge borrowers a fee if they choose to pay off their loan before its scheduled pay-off date.

SDHDA Markets the Program for You

Every year, SDHDA provides more than 2,000 mortgage loans on average. This is a large amount of loans, and we want to direct these borrowers to your business. All loan advertising revolves around lenders as the first step of the process – don’t miss out on a program driving traffic to your competitors.

Quick File Review and Approval

SDHDA works hard to provide good customer service with quick turnaround. This allows homebuyers get into their homes as soon as possible, as well as allowing you to ensure that the closing moves quickly.


If you’re interested in offering the First-Time Homebuyer Loan Program or have more questions about how SDHDA’s programs can work for you, contact us today. We are excited to partner with you to house the people of South Dakota.

Topics: Homeownership, Lending