VA Home Loans in South Dakota: Exclusive Benefits for Veterans

By Jeff Younger — Borrow Smart Mortgage Services

Introduction

If you’ve served in the U.S. military, you’ve earned more than just respect — you’ve earned special financial benefits that make homeownership easier.
One of the most valuable of these is the VA home loan, a powerful program that helps veterans, active-duty service members, and surviving spouses buy or refinance homes with zero down and favorable terms.

As a local VA-approved mortgage expert in Sioux Falls, I’ll explain how VA home loans work and how South Dakota veterans can take advantage of this incredible benefit.

1. What Is a VA Home Loan?

A VA home loan is a mortgage backed by the U.S. Department of Veterans Affairs (VA). The VA doesn’t lend the money directly — instead, it guarantees a portion of the loan, which allows lenders to offer better terms, lower rates, and no down payment requirements.

VA loans are available for:

• Buying a primary residence

• Refinancing an existing mortgage (VA streamline refinance or cash-out refinance)

• Building or improving a home

2. Major Benefits of VA Loans in South Dakota

VA loans are designed to make homeownership more affordable and accessible for those who’ve served.

Here’s what makes them stand out:

• ✅ No Down Payment Required — Buy a home with 0% down (no need to save thousands upfront).

• ✅ No Monthly Mortgage Insurance (PMI) — Unlike FHA or Conventional loans, VA loans don’t require PMI, which can save you hundreds every month.

• ✅ Lower Interest Rates — Because they’re backed by the VA, lenders often offer below-market rates.

• ✅ Flexible Credit Guidelines — Easier approval for veterans with moderate credit.

• ✅ Reusable Benefit — You can use your VA loan entitlement multiple times throughout your life.

• ✅ Assumable Loan Option — Another veteran can take over your loan at the same rate, a great selling feature if rates rise.

3. Who Qualifies for a VA Loan?

Eligibility for a VA loan depends on your service history and duty status. You may qualify if you:

• Served 90 consecutive days of active service during wartime, or

• Served 181 days during peacetime, or

• Have 6 years of service in the National Guard or Reserves, or

• Are a surviving spouse of a veteran who died in service or from a service-connected disability

You’ll need a Certificate of Eligibility (COE) — which your mortgage broker can help you request directly from the VA.

4. VA Loans vs. Conventional Loans

FeatureVA LoanConventional LoanDown Payment0% required3%–20% requiredMortgage InsuranceNonePMI until 20% equityCredit Score RequirementFlexible (often 580+)620+ typicalInterest RatesLower (VA-backed)Market-basedFunding FeeOne-time VA fee (can be financed)NoneIdeal ForVeterans and active militaryCivilian buyers

5. The VA Funding Fee Explained

While VA loans don’t require mortgage insurance, there is a one-time funding fee that helps keep the program running.

The fee varies depending on your down payment and whether it’s your first or subsequent VA loan:

• First-time VA loan: Around 2.15% of the loan amount

• Subsequent use: About 3.3%

• Disabled veterans: Often exempt from the funding fee

This fee can be rolled into the loan, so you won’t have to pay it out of pocket.

6. South Dakota VA Loan Limits and Local Advantage

While VA loans technically have no set loan limits, some lenders follow conforming loan standards (up to around $766,550 in 2025).

In South Dakota — and especially in the Sioux Falls metro area — veterans enjoy stable housing markets, affordable property taxes, and lenders familiar with VA programs.

Working with a local broker ensures your loan is handled efficiently and that you get all the state-level benefits available.

7. Why Work with a Local VA Loan Expert

Not all lenders are equally experienced with VA loans.
At Borrow Smart Mortgage Services, I specialize in helping veterans navigate the process — from eligibility verification to closing day — with respect, accuracy, and care.

You’ll get personalized guidance, competitive rates, and local support right here in Sioux Falls, South Dakota.

Ready to Use Your VA Benefits?

If you’ve served, you’ve earned this. Let’s make homeownership in South Dakota a reality with your VA home loan benefits.

📞 Call or Text: 605-982-7947
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