Can I Buy a House in South Dakota With Poor Credit

Can I Buy a House in South Dakota With Poor Credit

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover the frequently asked question can I buy a house in South Dakota with poor credit and low credit scores? Buying a house with bad credit in South Dakota can be overwhelming. The actual buying process can seem nearly impossible. But did you know that there are mortgage options out there that are ideal for individuals with a not-so-good credit history?

Can you buy a house in South Dakota with poor credit and low credit scores? Yes, you can. You do not need a twenty percent down payment to qualify for a mortgage in South Dakota. You can get a 3.5% down payment FHA home purchase FHA loan if you have at least a 580 credit score.

We will go further in this article and tell you more about these mortgage options and how you can purchase your dream property in South Dakota. By the end of this article, you will see that your credit history may be less of a roadblock than you imagine it to be. But first, let’s look at some facts about the state of South Dakota. In the following paragraphs, we will answer and discuss the FAQs of can I buy a house in South Dakota with bad credit.

Can I Buy a House In South Dakota With Poor Credit

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South Dakota is a state in the U.S. located in the north central of the country and is a part of the Great Plains. The state was named after the Lakota and Dakota Native American tribes, who currently make up the larger percentage of the state’s population. In terms of size, South Dakota is the seventeenth largest in the United States.

South Dakota is a large state. There are tens of thousands of acres. However, the state is the sixth least populated state in the nation. The best place to live in South Dakota is Brookings. Brookings, South Dakota has the best public school system in the state. Brookings, South Dakota has been named at the best place to raise a family in the state.

South Dakota, in terms of population, is the fifth least populous. Hence the fifth least densely populated in the country. The state is bordered by North Dakota to the north, Nebraska to the South, Wyoming to the west, Minnesota to the east, Iowa to the southeast, and Montana to the northwest. Missouri River divides the state into two socially and geographically distinct halves, which residents refer to as East River and West River.

Where Is The Best Place To Buy a House in South Dakota?

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The eastern side of the state is where most of the population resides, mostly due to its fertile soils ideal for farming. The state’s western side is predominantly known for ranching.

In 2022, the population of South Dakota increased to 909,000 from the previous year’s 896,000. African Americans make up two percent of South Dakota’s population. The state population in South Dakota make up fewer than on fifth of one percent of the population in the nation.

The economy of South Dakota is also highly dependent on tourism. In addition, the West River region is also home to the Black Hills, a group of low pine-covered mountains, and Mount Rushmore, all of which are major tourist attractions.

What Are The Major Cities in South Dakota?

There are five major cities in South Dakota. Sioux Falls is the state’s largest city, with a population of 189,258. The second most populous city is Rapid City with a population of 73,942.  A great place to live is the city of Falls Park. Falls Park, South Dakota is the city’s main tourist natural destination spots.

As mentioned previously, one the of the best places to live in South Dakota is Sioux Falls, the city’s largest city. Sioux Falls, South Dakota is known for its stunning Falls Park, the city’s main natural attraction. The whole state is beautiful. It is like living in paradise with the sprawling land.

The largest city in the state is Sioux Falls, which was founded in 1856 and is the most populous region in the state. Retail, finance, and healthcare are the main drivers of the city’s economy. The second largest city is Rapid City, which was founded in 1876 and largely depends on tourism and defense spending to drive its economy. Here are some more detailed facts about the state:


Population of South Dakota

The population in South Dakota consists of less than one million residents. The current population in South Dakota is about 900,000 people, with kids under five years making up 7.3% of the population, 24% under 18 years, and those over 65 making up 14.3% of the total population. Many people who want to live in privacy and not in a congested area will find South Dakota the ultimate place to live.

Unlike other state in the nation, South Dakota is a large state. However, the state is the sixth least populous state in the nation. Many Americans relocate to South Dakota to enjoy the expansive land, gorgeous landscape, privacy, and living without neighbors. It is not uncommon for many residents to live in acreage. Gustan Cho Associates are experts in helping homebuyers in South Dakota buy a house on acreage.

The entire state is sparsely populated where it is not uncommon for residents of the state to live in large acreage parcels. South Dakota has many scenic attractions such as the Black Hills National Forest which is the headquarters to two monuments next to Mt. Rushmore. Mount Rushmore has the monuments of four U.S. Presidents. The expansive state is attracting many retirees who want to live their retirement in peace and scenic gorgeous landscape with acres of privacy and not noisy neighbors.

Population Growth of South Dakota

Population growth The population growth since the last census in 2020 is 0.98 percent. The growth rate from 2010 to now is 9.5%, representing over 78,000 people.

What Is The Median Income in South Dakota

The median income in South Dakota is lower than the rest of the country. The average salary among wage earners in South Dakota is between $43,498 to $79,847 per year. An income of $540.400 in South Dakota is considered upper class in the state. The cost of living in South Dakota is four percent lower than the national average.

Homebuyers get a lot of house for the money in South Dakota. Everything in South Dakota costs less than the rest of the nation. Everything from food, clothing, utilities, autos, homes, and cost of living is lower than the rest of the United States. You can get a lot of house for the money in the state.

Another good news for homebuyers moving to South Dakota is the cost of living and housing values is lower than the national average. Home values is four percent lower than the rest of the country. Gas, electric, water, and other utilities than the rest of the U.S. Median Income The median household income is $59,800. For context, the national median income is $64,900.

What Is The Tax Rate in South Dakota

Property and sales tax in South Dakota is lower than the rest of the nation. With a sales tax rate of 4.5% percent, the total combined local and state sale tax rate for the state totals 6.40 percent.

South Dakota is a tax friendly state. It is not the lowest nor is it the highest compared to other states. To put the state’s tax rate into perspective, if you are making $100,000 annually, a wage earner will be taxed $22,599. This makes the wage earner getting a net take home paycheck of $77,800 after taxes.

Tax rate The state doesn’t have individual income taxes or corporate taxes. But it has a sales tax rate, which is 4.5%, while the property tax rate across the state averages 1.22%.

Education System In South Dakota

Education There are 159 school districts in south Dakota with 28 colleges. Also, over 33% of the state’s population have some college or associate degree, while 20% have a bachelor’s degree. 9% have attained a master’s degree level of education. The average school expenditure in the state is $12,383.

Economy of South Dakota

Economy The gross domestic product is $48.98 billion, which is a slight increase from the previous year’s GDP. The unemployment rate is also quite low, at 3.3%, compared to the 6.0% in the country.

Weather In South Dakota

Weather The state experiences a temperate continental climate, with four different seasons and precipitation, which ranges from moderate on the eastern side to semi-arid on the western side.

Median Home Prices In South Dakota

Median home prices The typical home value in South Dakota is about $225,000. This is an increase of 15% from the past year’s value.
Cost of living Compared to the rest of the country, the cost of living in the state is 10.7% lower
Renters vs. owners The majority of the population in the state are homeowners, as rentals are not that many and are available for those below the poverty level.

Can I Buy a House In South Dakota With Bad Credit

For starters, one thing you need to understand is that there is no actual law in South Dakota that compels lenders in the state to set the credit score at a specific level. The lenders set the credit scores themselves. They are free to set their own requirements. This is to say that even though you might have a bad credit history.

Gustan Cho Associates are mortgage brokers licensed in 48 states including South Dakota and Washington, DC. The team at Gustan Cho Associates are experts in helping borrowers with credit scores down to 500 FICO. We have a national reputation for being to approve loans when other cannot. We have no overlays on government and conventional loans. The team at Gustan Cho Associates are experts in non-QM loans and alternative lending programs.

If you meet all the other conditions, you will be eligible for a mortgage with some lenders. This is why you see that different lenders always have different requirements. Some lenders will focus more on whether the borrower has a sizeable down payment, their debt situation, and their income. Even with that said, here are some mortgage options ideal for borrowers with bad credit history.

Can I Buy a House in South Dakota With Non-QM Loans

Non-QM loans – this is one of the best mortgage options in the state, with many lenders not focusing too much on the credit score, but on factors such as the borrower’s income flow as well as the down payment. The government doesn’t back these mortgages.

Over 80% of our clients are borrowers who could not qualify at other lenders. We have a national reputation for being able to do loans other mortgage companies cannot do. Gustan Cho Associates has over 210 wholesale mortgage lenders.

Therefore, can be very flexible in terms of the requirements. There are many options under this category of loans, from jumbo loans to 1099 loans, bank statement loans, etc. For Jumbo loans, they exceed the conforming limit of 647,200 USD, and you will be able to get them at an average rate of 3.24%.

Can I Buy a House in South Dakota With FHA Loans For Bad Credit

FHA loans – this is a mortgage that the Federal Housing Administration backs, and it’s ideal for first-time home buyers, largely due to their low qualifying requirements. Many lenders require a credit score of at least 500 to qualify for the mortgage. Remember that the most widely applied credit score for traditional loans across South Dakota is 620. Also, in all 66 counties in South Dakota, the FHA loan limit is 420,680 USD, while the conforming limit is 647,200 USD.

Can I Buy a House in South Dakota With Low Credit Scores With a VA Loan?

VA loans – this option is available for military veterans and is backed by the Department of Veterans Affairs. Different lenders require varying credit scores for these mortgages. Some won’t even ask for a down payment. As you can see, you still have many mortgage options. Borrowers with bad credit can get qualify and get approved at Gustan Cho associates.

There are no minimum credit score requirements on VA loans. The team at Gustan Cho Associates are experts in helping homebuyers qualify and get approved for VA loans with credit scores d9wn to 500 FICO.

Just be sure of the lender you are approaching, as different lenders have different requirements. Keep one thing in mind, though, with these mortgages, be prepared to pay higher interest rates compared to traditional loans. Now, having answered the funding aspect of your question, let’s take a look at South Dakota’s property market, plus how you can buy a home in the state.

Tips and Advice Buying a House in South Dakota

In this section, we will cover some tips for buying property in South Dakota. Let’s start by stating that the real estate sector in South Dakota, especially its big cities like Sioux Falls and Rapid City. Large cities in South Dakota had home prices skyrocketing in the last two years.

South Dakota, like the rest of the nation, had exploding home values in the past few years. Many homeowners who purchased a home the past few years are sitting on a lot of equity in their homes. Many homeowners have plenty of equity to do a cash-out refinance.

Home values skyrocketed in valuer over a 20 percent increase in the previous year alone. This has partly been attributed to low inventory that resulted in houses selling pretty quickly, often with many offers. Other than the big cities, even the rural areas have tasted this real estate boom, which means the prices have been gradually increasing as well.

Can I Buy a House In South Dakota in a Booming Housing Market

In some of these areas, nobody expected that the property market would ever experience such a boom, to the point where buyers used to negotiate heavily, and property owners didn’t have a choice but to give in since they just wanted to sell the property.

Buying a home in South Dakota is a great investment. Unlike other states, home values in the state has not peaked or skyrocketed like crazy where a correction is imminent.

It is completely different now! Investors have been flocking to the state from across the entire country. For instance, recently, Tzadik Management, a property management company based in Miami, invested 52 million USD in hundreds of property units in Sioux Falls.

Buying a House in South Dakota Versus Other States

And these are not the only investors who have taken notice of the boom, others from California, Maine, New York, and New Jersey have been flocking there too. Regarding property prices,

Many Americans from other states living in big cities are migrating to South Dakota. Governor Kristi Noem has done a great job for the state. The state has a surplus despite being a tax friendly state.

South Dakota has seen unprecedented growth in property prices. A couple of years ago, after the great recession, property prices dropped to about 150,000.  However, since then, the median home value grew by a staggering 47 percent to about 225,000 USD. This growth has been attributed to the improvement of the economy, the introduction of excellent housing, and increasing confidence in the market.

Get a Mortgage Loan Officer To Get Pre-Approved

After you have decided to purchase a home in South Dakota, you need to hire a mortgage loan officer. Gustan Cho Associates is licensed in South Dakota. After one of our loan officers at Gustan Cho Associates qualifies and pre-approves you, you can now hire a real estate agent. Armed with a pre-approval. you can now shop for homes and enter into a real estate purchase contract. The mortgage process normally takes thirty days.

Shopping For a Home in South Dakota

Now, with that said, here is what to keep in mind if you are planning to buy a house in South Dakota to get a real estate agent. You should get several referrals of realtors from family, friends, co-workers, and make sure you check their online reviews. Get a real estate agent. Once you sort out your mortgage and down payment, the next thing would be to find a real estate agent from the state.

When hiring a mortgage loan officer and realtor, make sure you get along with both of them. The loan officer and the real estate agent should also get along. You should never hire a part-time mortgage loan originator nor a part-time realtor.

The real estate agent understands the local property market perfectly. Remember that they would be your main ally during the entire process, so make sure you hire right. Select the right location – some of the best areas to search for properties include the following:

Can I Buy a House in South Dakota In Sioux Falls?

Sioux Falls – the median property price in this area is about  $205,500, with median rent at $838, and in many cases, the final cost always exceeds the listing price, with homes selling pretty quickly. This tells how vibrant the city’s property market really is. The city offers its residents a dense suburban feel, with many bars, coffee shops, and parks.

The housing market throughout the state of South Dakota remains strong. There is still room for an upsize in prices. Many new Americans are migrating to South Dakota due to the low cost of living, low local and state taxes, and affordable housing.

The population in this town is about 180,900 people. It’s economically and ethnically diversified, with a median household income at around 61,700 USD. On the education aspect, the city has over 66 public schools and 21 private schools, which means that you won’t have to worry about your kids’ education.

Can I Buy a House in South Dakota In Rapid City?

Rapid City – the median home value in this city is 194,100 USD, with the median rent at about $833. The city has a population of 76,500 people and is the second-largest city after Sioux Falls. It has a thriving industrial and tourism sector that creates jobs for many people, with a median household income of about $53,750. The crime rate is low and educational institutions are in plenty. This is an excellent place for young families and professionals, and many will keep flocking to its property market in the coming months and years.

Can I Buy a House in South Dakota In Madison?

Madison – getting a home in this area is very affordable, as the median home value is about 124,300 USD. The town is relatively quiet and has a population of 7,200 people. The median income is about 54,800 USD, and the crime rate is also quite low. The schooling system in this town is actually what attracts many people as the expenditure on public schools even surpasses the national expenditure per student.

Can I Buy a House in South Dakota In Brandon

Brandon – the median home price in this suburb of Sioux is about $245,500, with the median rent at about $900. It is also a safe neighborhood with some of the best schools in the state, and has an average income of $93,536, with a very low unemployment rate. Brandon has been ranked as the best place to buy a house, raise a family, and even school your kids in South Dakota.

How Can I Buy a House In South Dakota With Poor Credit?

Make an offer – once you find your dream home, the next step would be to make an offer. Your estate agent will help you come up with a compelling offer and will also help during inspections and appraisals.

Yes, you can buy a house with poor credit in South Dakota. You do not have to pay outstanding collections and charge-off accounts. As long as you have been timely on all of your payments in the past twelve months. you should be able to qualify to buy a house in South Dakota with poor credit.

If any renegotiations might be necessary, the agent will also handle them. This is why you need to hire a reputable agent who will have your best interests at heart. The last step will be to close the purchase. You will need to sign several documents at this stage, including your final loan application, the deed, the loan’s promissory note, and the disclosure statement.

Can I Buy a House in South Dakota With Poor Credit and Little Money Down?

As you can see, having bad credit history should never be a stumbling block between you and your dream of being a homeowner in South Dakota. There are always mortgage options for you! You just need to get the right mortgage broker to consult. And when it comes to the actual buying process, it is as easy as in all the other states. Hire a reputable estate agent and a mortgage broker. Let them take the pressure off you.

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