SDHDA Homeownership Education Resource Organization (HERO...

SDHDA Homeownership Education Resource Organization (HERO) is administered by SDHDA to promote affordable

homeownership, rehabilitation, or rental stability throughout South Dakota. The program combines fixed‑rate

first mortgages with down‑payment assistance, tax credits, or forgivable loans such as the Community Home

Improvement Program (CHIP). Borrowers benefit from statewide HUD‑approved education courses, post‑purchase

budget coaching, and foreclosure‑prevention resources. Funds are accessed through a network of

SDHDA‑participating lenders or municipal housing departments on a first‑come, first‑served basis. Properties

must meet South Dakota housing‑quality standards, and rehabilitation draws are inspected prior to payment to

safeguard workmanship. Rural borrowers may layer USDA 502 financing, while urban applicants can combine

Neighborhood Stabilization Program grants for targeted revitalization areas.

• U.S. citizen, permanent resident, or qualifying non‑citizen.

• Household income ≤ SDHDA county limits (e.g., $105,000 for a family of four in Minnehaha County, 2025).

• Purchase‑price cap aligned with FHA/USDA limits or $400,000, whichever is lower.

• Minimum 620 credit score (680 for conventional loans).

• Debt‑to‑income ratio ≤ 45 % (up to 50 % with compensating factors).

• Completion of HUD‑approved homebuyer education and SDHDA counseling.

• Varies applied toward down payment, closing costs, or rehab escrow.

• 30‑year fixed‑rate mortgage at below‑market interest.

• Forgivable assistance after five years of owner occupancy (for programs like Fixed Rate Plus).

• Eligibility for Mortgage Credit Certificates to reduce federal tax liability.

• Access to SDHDA foreclosure‑prevention hotline and homeowner resources.

1. Pre‑approval: Engage an SDHDA‑approved lender; review credit and income.

2. Education: Complete HUD‑certified homebuyer course; receive certificate.

3. Reserv​e funds: Lender locks SDHDA rate and requests assistance funds.

4. Underwriting & appraisal: Provide documentation and undergo property inspection.

5. Closing: Sign first‑mortgage and subordinate‑lien documents; receive funds.

6. Post‑purchase: Move in within 60 days; comply with occupancy and forgiveness terms.