$275,000
Median Home Price
$233,000
Avg. Loan Amount
10+
Licensed Lenders
2+
Major Markets
South Dakota Real Estate Market
Why Non-QM loans are popular in South Dakota
Growing real estate market creates demand for flexible mortgage solutions
Self-employed professionals benefit from bank statement loan programs
Real estate investors use DSCR loans for rental property financing
Foreign national buyers active in South Dakota real estate market
Non-QM loans available for borrowers with recent credit events
Non-QM vs Conventional in South Dakota
See how Non-QM mortgage options compare to conventional loans for South Dakota borrowers
| Feature | Non-QM Loans | Conventional |
|---|---|---|
| Interest Rates | 7.25% - 9.25% | 6.5% - 7.5% |
| Min. Credit Score | 580-620 | 620-680 |
| Max DTI Ratio | Up to 50-55% | Up to 43-45% |
| Down Payment | 10-25% | 3-20% |
| Income Documentation | Bank Statements, 1099, P&L, Assets | W-2, Tax Returns, Pay Stubs |
| Max Loan Amount | Up to $2M | $766,550 |
| Closing Time | 21-35 days | 30-45 days |
| PMI Required | No (typically 10%+ down) | Yes (if < 20% down) |
* Rates and terms are approximate and vary by lender, credit profile, and property type. Data reflects typical South Dakota market conditions as of 2026.
Popular Non-QM Programs in South Dakota
These loan programs are especially popular among South Dakota borrowers
Top South Dakota Markets We Serve
Non-QM lending available throughout South Dakota
South Dakota Lending Regulations
South Dakota is regulated by the Division of Banking. Mortgage lenders must be licensed under the South Dakota Mortgage Broker Act. Non-QM loans must comply with state lending regulations.
South Dakota Non-QM Loan FAQs
Common questions about Non-QM loans in South Dakota
What is the minimum credit score for Non-QM loans in South Dakota?
Most Non-QM lenders in South Dakota require a minimum credit score of 620-660, though some programs accept scores as low as 580 with compensating factors like larger down payments or additional reserves.
Can I get a bank statement loan in South Dakota?
Yes, bank statement loans are available throughout South Dakota. Self-employed borrowers can qualify using 12 or 24 months of personal or business bank statements instead of tax returns.
What are DSCR loan requirements in South Dakota?
DSCR loans in South Dakota typically require a debt service coverage ratio of 1.0 or higher, meaning the property's rental income must cover the mortgage payment. No personal income verification is needed.
How much can I borrow with a Non-QM loan in South Dakota?
Non-QM loan amounts in South Dakota typically range from $100,000 to $3 million or more, depending on the lender and program. With a median home price of $275,000, many SD borrowers find Non-QM loans essential for their purchase.
Are Non-QM loan rates higher in South Dakota?
Non-QM loan rates in South Dakota are typically 0.5% to 2% higher than conventional rates, reflecting the flexible qualification criteria. However, rates vary by program, credit score, and down payment amount.
What are current Non-QM mortgage rates in South Dakota?
Non-QM mortgage rates in South Dakota typically run 0.5-1.5% higher than conventional rates. As of 2026, expect rates between 6.5% and 9.5% depending on the program, credit score, and down payment. Bank statement loans and DSCR loans in Sioux Falls and Rapid City tend to have competitive pricing due to higher lender competition.
What income documentation alternatives are accepted for Non-QM loans in South Dakota?
Non-QM lenders in South Dakota accept several alternative income documentation methods: 12 or 24 months of bank statements (personal or business), 1099 forms, profit and loss statements prepared by a CPA, asset depletion calculations, and rental income from DSCR analysis. This flexibility makes homeownership accessible for self-employed borrowers, freelancers, and investors throughout South Dakota.
What property types qualify for Non-QM financing in South Dakota?
Non-QM loans in South Dakota cover a wide range of property types including single-family homes, condos (including non-warrantable), townhomes, 2-4 unit properties, and some commercial mixed-use properties. Investment properties, vacation homes, and primary residences all qualify. In markets like Sioux Falls and Rapid City, multi-unit properties are especially popular for DSCR loans.
What is the minimum down payment for a Non-QM loan in South Dakota?
Most Non-QM programs in South Dakota require a minimum down payment of 10-20%, though some lenders offer options as low as 10% for primary residences with strong compensating factors. DSCR loans for investment properties typically require 20-25% down. With the median home price in South Dakota around $280,000, this means a down payment starting at approximately $42,000 to $56,000.
Can I refinance into a Non-QM loan in South Dakota?
Yes, Non-QM refinancing is available in South Dakota for both rate-and-term and cash-out refinancing. Cash-out refinances allow up to 75-80% LTV in most cases. This is particularly popular among South Dakota homeowners who want to tap equity without providing traditional income documentation, or investors looking to pull equity from rental properties in Sioux Falls or Rapid City to fund additional purchases.
How do DSCR loans work for South Dakota investment properties?
DSCR (Debt Service Coverage Ratio) loans in South Dakota qualify borrowers based on the rental income of the property rather than personal income. The property's monthly rental income must typically cover 1.0x to 1.25x the monthly mortgage payment (PITI). No employment verification, tax returns, or W-2s are required. This makes DSCR loans ideal for scaling a rental portfolio in South Dakota's growing markets.
What happens if I have a recent bankruptcy or foreclosure in South Dakota?
Non-QM lenders in South Dakota offer programs for borrowers with recent credit events. Many programs allow financing just 1-2 years after a bankruptcy discharge (compared to 4-7 years for conventional loans) and 2-3 years after a foreclosure. Expect to provide a larger down payment (typically 20-25%) and accept a slightly higher interest rate, but homeownership is still achievable.
Are Non-QM loans available for foreign nationals buying property in South Dakota?
Yes, several Non-QM lenders in South Dakota offer foreign national loan programs. These loans do not require a U.S. Social Security number, credit history, or visa. Foreign nationals can purchase investment properties or vacation homes in South Dakota with as little as 25-30% down. Popular areas for foreign national buyers include Sioux Falls and Rapid City.
What is the maximum loan amount for Non-QM loans in South Dakota?
Non-QM loan amounts in South Dakota typically range from $100,000 to $3 million, with some lenders offering up to $5 million for jumbo Non-QM programs. There are no conforming loan limits to worry about since Non-QM loans are not sold to Fannie Mae or Freddie Mac. High-value properties in Sioux Falls and Rapid City can be financed with these higher limits.
How does a bank statement loan work for self-employed borrowers in South Dakota?
Bank statement loans in South Dakota allow self-employed borrowers to qualify using 12 or 24 months of personal or business bank statements instead of tax returns. The lender calculates your income by averaging deposits over the statement period, typically using 50-100% of deposits for business accounts and 100% for personal accounts. This is ideal for South Dakota business owners who maximize tax deductions.
What are the DTI requirements for Non-QM loans in South Dakota?
Non-QM loans in South Dakota generally allow higher debt-to-income (DTI) ratios than conventional loans. Most programs accept DTI ratios up to 50%, and some lenders go as high as 55% with compensating factors such as a larger down payment, significant reserves, or a higher credit score. DSCR loans do not use personal DTI at all, focusing instead on the property's cash flow.
Do I need reserves to qualify for a Non-QM loan in South Dakota?
Most Non-QM lenders in South Dakota require 3-12 months of mortgage payment reserves in liquid assets after closing. The exact requirement depends on the loan program, property type, and credit profile. Investment property loans and jumbo Non-QM loans typically require more reserves (6-12 months), while primary residence loans may require as few as 3-6 months.
How does Non-QM lending compare to conventional mortgages in South Dakota?
Non-QM loans in South Dakota differ from conventional mortgages in several key ways: they accept alternative income documentation (bank statements, 1099s, asset depletion), allow lower credit scores (as low as 580 vs. 620+ for conventional), permit higher DTI ratios (up to 50-55%), and have no conforming loan limits. The trade-off is slightly higher interest rates (0.5-1.5% above conventional) and larger down payment requirements (typically 10-25% vs. 3-5% for conventional).
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