Public Safety Down Payment Assistance Program

Providing Home Assistance for Public Safety

The Public Safety Down Payment Assistance program bolsters home ownership opportunities for police officers, firefighters, and other public safety employees.

This program is also designed to stabilize and promote safety in at-risk neighborhoods, by encouraging those with law enforcement and fire rescue jobs to own and live in Sioux Falls.

Assistance Details

Each applicant can receive up to $20,000—or 20 percent of the purchase price (whichever is less)—toward the purchasing of a home.

Program funds may be used for down payment and/or closing costs and prepaid items. Prepaid items may include but are not limited to:

• Upfront mortgage insurance and mortgage insurance reserves deposited with the lender as required by the first mortgage provider.
• Property taxes deposited with the lender as required by the first mortgage provider.

Assistance Requirements

Property Requirements

• Properties purchased with down payment assistance must be located in these specific neighborhoods in Sioux Falls:
• The property must have a purchase price at or below $385,000. This initial limit will be updated annually based upon the Federal Housing Finance Agency’s house price index for the Sioux Falls Metropolitan Statistical Area.
• Purchases involving contracts for deed are ineligible.

Applicant Requirements

• At least one owner of the property must be a public safety officer and maintain the property as their principal residence.
• Public safety officers must be employed and certified in law enforcement or fire rescue full-time by a city, county, or state.
• The eligible homebuyer must have been employed in this line of work for a minimum of one year.
• The applicant must provide proof of such employment.

General Requirements

• All applicants must meet various program steps within these time frames:

  • The Down Payment Assistance application must be submitted at least four weeks before the loan closing.
  • A purchase agreement must be signed and accepted by the buyer and the seller within four months of the application approval. The maximum time frame allowed to accomplish this step begins with the date of the letter of commitment.
  • The buyer must submit a copy of the purchase agreement within one week of the date of the agreement.
  • A loan closing must occur within six months of the application approval. The maximum time frame allowed to accomplish this step begins with the date of the letter of commitment.
  • Time extensions may be considered provided the applicant submits a written request prior to the deadline, stating the cause of the delay and the amount of additional time requested.
  • If the applicant fails to meet any of the required deadlines, and a written request for extension is not submitted, the application will be canceled and the funding commitment will be withdrawn.
• The financial assistance provided through this program shall be secured by a signed mortgage and promissory note with the buyer. This loan will be recorded so that it is inferior only to the first mortgage of the primary lender. The City may pay any necessary recording fee associated with its mortgage.

• The following supporting documentation must be provided along with a completed application:
  • Proof of employment.
  • Letter of commitment from a primary mortgage lender (if available).
  • Purchase agreement (if available).

Terms of the Loan (Recapture Provisions)

• All properties purchased with assistance provided under this program shall be subject to recapture provisions if the property is sold within five years from the date of purchase. If the public safety officer owns and occupies the property for five full years, the loan will be forgiven.
• The financial assistance is provided as a forgivable loan that requires no monthly payments as long as the buyer owns and occupies the property. The loan shall become due and payable if any of the following events occurs within five years of purchase:
  • Conveyance, or sale, of the subject property.
  • Voluntary or involuntary relinquishment of the subject property.
  • Discontinuance of occupancy of the subject property.
  • Termination of employment in the public safety fields.
  • Termination of the agreement for noncompliance.
• Repayment terms are as follows:
  • If the events of any of the first four events as described above, the principal sum, without interest, shall become due and payable.
• The loan provided through this program shall not be assumed.