Know Your Sioux Falls Home Financing Options

Buying a home is one of the biggest financial steps you’ll ever take—and understanding your financing options can make the process smoother and more affordable. At the Tyler Goff Group, we help Sioux Falls homebuyers navigate the lending landscape, connect with trusted local lenders, and choose mortgage programs that align with their goals.

Here’s a comprehensive guide to understanding your home financing options in Sioux Falls, whether you’re a first-time buyer, upgrading to your forever home, or investing in real estate.

1. Start by Understanding Mortgage Basics

Before you explore specific loan types, it helps to understand how a mortgage works. A mortgage is a loan secured by real estate, typically repaid over 15 to 30 years. Each payment covers part of the loan principal and interest, plus property taxes and insurance in most cases.

Lenders evaluate your credit score, income, debt-to-income ratio, and down payment amount to determine eligibility and interest rates. The stronger your financial profile, the more favorable your terms.

2. Conventional Loans: Flexible and Widely Available

Conventional mortgages are one of the most popular options in South Dakota. They’re not backed by a government agency, so borrowers typically need a credit score of 620 or higher and a down payment as low as 3% (though 20% avoids private mortgage insurance).

Benefits:

• Competitive interest rates for qualified buyers
  
• Option to cancel private mortgage insurance (PMI) once you reach 20% equity
  
• Flexible property types, including single-family homes, condos, and townhomes
  
  

Conventional loans are a great fit for buyers with solid credit who plan to stay in their home long-term.

3. FHA Loans: Designed for First-Time Buyers

If you’re buying your first home in Sioux Falls, an FHA loan (insured by the Federal Housing Administration) can make homeownership more accessible.

Key advantages:

• Down payments as low as 3.5%
• Easier credit qualification—often approved with scores as low as 580
• More lenient debt-to-income requirements
  
  

FHA loans are especially helpful for buyers with limited savings or less-than-perfect credit.

4. VA Loans: Exclusive Benefits for Veterans

If you’ve served in the U.S. military, a VA loan (backed by the Department of Veterans Affairs) offers unmatched benefits:

• No down payment required for most borrowers
  
• No private mortgage insurance (PMI)
  
• Competitive rates and flexible qualification criteria
  
  

Many Sioux Falls veterans and active-duty service members use VA loans to purchase homes with minimal upfront cost. If you qualify, this option provides one of the most affordable paths to homeownership.

5. USDA Loans: Ideal for Rural and Suburban Buyers

Parts of the Sioux Falls area—including surrounding communities like Tea, Harrisburg, and Brandon—may qualify for USDA Rural Development Loans.

Highlights include:

• Zero down payment
  
• Lower-than-average mortgage insurance
  
• Income-based eligibility
  
  

These loans are designed to support homeownership in rural and suburban areas—perfect for those seeking peaceful neighborhoods near the city.

6. Jumbo Loans: For Higher-Value Properties

If you’re purchasing a home that exceeds conforming loan limits (about $766,550 in 2025), you may need a jumbo loan. These loans are designed for higher-priced properties and typically require:

• Excellent credit (700+)
  
• Larger down payments (10–20%)
  
• Proof of strong income and reserves
  
  

Jumbo loans are common among Sioux Falls buyers investing in luxury homes, acreage properties, or multi-family real estate.

7. South Dakota Homebuyer Assistance Programs

Local and state programs can make homeownership more achievable. For example, South Dakota Housing Development Authority (SDHDA) offers:

• First-time homebuyer programs with down payment assistance
  
• Fixed, low-interest loans for qualifying borrowers
  
• Educational resources to help buyers understand the process
  
  

Your Tyler Goff Group agent can connect you with SDHDA-approved lenders and help determine eligibility.

8. Fixed-Rate vs. Adjustable-Rate Mortgages

Choosing between a fixed or adjustable mortgage can have long-term impacts on affordability:

• Fixed-rate loans keep your rate consistent for the life of the loan—ideal for stability and long-term planning.
  
• Adjustable-rate mortgages (ARMs) start with lower rates that adjust over time—useful if you plan to sell or refinance within a few years.
  
  

Your decision depends on your financial goals, risk tolerance, and how long you expect to stay in your home.

9. Down Payment and Closing Cost Strategies

One of the biggest hurdles for homebuyers is saving for the down payment. Fortunately, you have options:

• Gift funds from family or friends
  
• Down payment assistance programs (local or federal)
  
• Negotiating seller concessions to help cover closing costs
  
  

Your real estate agent and lender can work together to structure an offer that meets your needs and keeps upfront costs manageable.

10. Get Pre-Approved Before You Shop

Before touring homes, get pre-approved by a local lender. A pre-approval letter strengthens your offer, shows sellers you’re serious, and helps you understand your true price range.

At the Tyler Goff Group, we partner with trusted local lenders who offer fast approvals, competitive rates, and clear communication—so your buying process stays smooth from start to finish.

Why Home Financing Guidance Matters

Choosing the right loan isn’t just about interest rates—it’s about aligning your financing strategy with your long-term goals. Whether you’re seeking a low down payment, building equity quickly, or planning to refinance later, your agent and lender should work as a team to help you succeed.

Our Sioux Falls market knowledge and industry connections mean you’ll have expert guidance through every step of the buying journey—from pre-approval to closing day.

Work With the Tyler Goff Group

At the Tyler Goff Group, we combine local market insight with a high-tech, high-touch approach to help Sioux Falls buyers find their dream home and the right financing to match.

Ready to get started?
Contact the Tyler Goff Group today to connect with a trusted lender and explore your Sioux Falls home financing options with confidence.