FHA Loans in South Dakota: The 2026 Limit, the Seller's Transfer Fee and a Blank Title Line

In Spearfish, in Lawrence County, the 2026 FHA loan limit for a one-unit home is $541,650. Everywhere else in South Dakota it is $541,287. That is a difference of $363, and Lawrence is the only one of the state's 66 counties that is not at the lowest limit FHA sets anywhere, which HUD calls the floor.

An FHA loan in South Dakota can be up to $541,287 on a one-unit home in 65 of the state's 66 counties, and up to $541,650 in Lawrence County. On a $330,000 home, for example, the loan limit is not what decides an FHA purchase. The cash to close is, and South Dakota settles one of those costs by statute.

I'm Jeff Moran, NMLS #483943, licensed to originate in South Dakota through C2 Financial Corporation, and I have been in the mortgage business since 1996. The South Dakota page covers the closing rules, and the FHA explainer covers how the program works everywhere.

What are the 2026 FHA loan limits in South Dakota?

HUD published them in Mortgagee Letter 2025-23 for FHA loans whose case numbers were assigned on or after January 1, 2026.

Area	One unit	Two units	Three units	Four units
65 counties at the floor	$541,287	$693,050	$837,700	$1,041,125
Lawrence County	$541,650	$693,400	$838,150	$1,041,650

An FHA loan on a $330,000 purchase with 3.5 percent down is a base loan of $318,450, which leaves $222,837 of room under the floor.

Which South Dakota markets use FHA the most?

Federal mortgage disclosure data for 2024 shows how often it comes up. In the Rapid City area, 325 of 1,837 home purchase loans were FHA and 412 were VA. In the Aberdeen area, 64 of 367 were FHA and 33 were VA. My Rapid City page and Aberdeen page have the details.

If you are a veteran, VA loans in South Dakota may fit better, and I price the two side by side.

How much cash does an FHA loan take in South Dakota?

HUD's Handbook 4000.1 requires you to put in at least 3.5 percent of the home's value, which is the lesser of the price or the appraised value, and it calls that cash the minimum required investment. On a $330,000 purchase, that is $11,550. The upfront mortgage insurance premium is 1.75 percent of the base loan, about $5,573 on that example, and you can finance it or pay it in cash.

Closing costs are separate. The handbook says closing costs, prepaid items and other fees may not be applied toward the minimum required investment, so the investment and the closing costs are two piles of money.

What does the seller's transfer fee do to my closing costs?

South Dakota's real estate transfer fee belongs to the seller. Section 43-4-21 of South Dakota's codified laws assigns it to the grantor, the person transferring the deed, and the register of deeds collects it when the deed is recorded. It belongs on the seller's side of the closing statement, so please check that any estimate you are handed puts it there. South Dakota also has no separate mortgage-recording tax based on the loan amount.

Mortgage and release recording fees still apply, and so do settlement and title-service charges. That leaves a shorter list for you to cover, and the seller can help with it. Sellers, agents and builders may contribute up to 6 percent of the sales price toward your closing costs, prepaid items, points and the upfront premium. On the $330,000 example that ceiling is $19,800. These credits cannot go toward the minimum required investment.

Who pays for owner's title insurance in South Dakota?

The purchase contract decides. South Dakota's official residential purchase agreement leaves blanks for the buyer's and seller's shares of title insurance instead of printing a default, and no South Dakota statute or agency assigns the owner's premium to either side. The blank gets filled in when you and the seller write the offer, so please fill it in on purpose.

Title rates here are filed with the Director of Insurance, and South Dakota law prohibits unfiled deviations, rebates and discounts. Providers can file different schedules, so please compare quoted premiums and settlement charges. A discount from the filed rate is not available.

Do I need an attorney to close an FHA loan in South Dakota?

South Dakota does not require an attorney to preside over an ordinary residential purchase or refinance. A real estate licensee can prepare closing statements and the other listed transaction forms, but state law bars a licensee from giving legal advice or preparing other legal documents, so a legal question belongs with a lawyer. FHA also asks the lender to confirm that nobody on the file, including the closing agent and the title company, is on HUD's exclusion list.

Where to start

When you're ready, you can see rates and the payment for a home in your price range, with South Dakota closing costs included, and you choose the option that works best for you. Which loan fits puts FHA next to conventional and VA, and how to get pre-approved explains what I will ask for.

Nothing here is a loan approval, a denial, or a commitment to lend, and final approval depends on the property, the appraisal and full underwriting. Limits and premiums are revised periodically, so please confirm current figures with me.

Common questions

What is the FHA loan limit in South Dakota for 2026?

Sixty-five of the state's 66 counties are at the national floor for a one-unit home. Lawrence County, where Spearfish is, is slightly above it. The limit applies to FHA loans whose case numbers were assigned on or after January 1, 2026.

Who pays the transfer fee on a South Dakota home purchase?

The seller. South Dakota law assigns the real estate transfer fee to the grantor, so it is not a line in your closing budget. A refinance records a mortgage without transferring title by deed, so it does not trigger the fee.

Can the seller pay my FHA closing costs in South Dakota?

Yes, within FHA's limit. Interested parties can contribute up to 6 percent of the sales price toward closing costs, prepaid items, points and the upfront premium. The credit cannot be used for the minimum required investment.

Can I negotiate a title insurance discount in South Dakota?

Not on the premium, because South Dakota prohibits unfiled deviations, rebates and discounts. You can compare providers' filed rates and their settlement charges.

Does South Dakota require an attorney for the closing?

No. An attorney can advise you if you choose to hire one.