Construction Loans in South Dakota

Construction loans in South Dakota are available in a wide array of options and are perfect for financing a new home build, whether that’s a primary residence or vacation property.

You’re our first priority. We want you to understand how we make money. This post may contain affiliate links. Biglaw Investor may receive a commission at no additional cost to you if you click on the links in this article. This may influence which products we write about and where and how the products appear on a page. However, it does not influence our evaluations. Our opinions are our own. In some circumstances, if you work with us, we are able to provide an incentive to work with our advertising partners that is unavailable if you work with our advertising partners directly. Our partners cannot pay us to guarantee favorable reviews of their products or services. To read more about how we make money, click here.

Find a Construction Loan lender

Special Loans for Construction

Build your dream home

JD MORTGAGE® connects you with lenders who want to help you build a new home or renovate an existing property. We find the lenders that offer terms specially tailored to your goals.

Offered exclusively through Biglaw Investor, we make it incredibly simple to find the best loan for your construction financing needs.

Get Your Construction Rate

build your dream home

Let the best bank win

PrimeLending logo UMB logo Flagstar Bank logo First National of Nebraska logo PNC Bank logo First Horizon Bank logo Fairway logo

And many more

Construction borrowers love us.

We think you will too.

Let’s Get Started
Mary Kate Raffetto

I’m an associate at a firm in Houston and used JD Mortgage thanks to your advice! The experience was great—they were super fast and responsive.” —Mary Kate Raffetto Beck Redden LLP

Clint Cowan

For a JD Mortgage, I had good luck with IBERIABank. [They] made this process very smooth.” —Clint Cowan Lynn Pinker Hurst & Schwegmann

4 Best Construction Loans in South Dakota

Key Terms

  • Construction loans in South Dakota are available for both residential and commercial properties, and can be used for new construction or renovations.
  • Lenders typically require a down payment of 20-25% of the total project cost and may require borrowers to have a certain level of liquidity or net worth.
  • Borrowers can choose from a variety of loan types, including fixed-rate, adjustable-rate, and interest-only options, and may be able to lock in a low interest rate during the construction phase.

South Dakota is a great place to live, work, and play. The state has a population of 905,404 people and is growing steadily. Its most famous attraction, Mount Rushmore, attracts over two million people each year.

Home prices aren’t as low as you might think given the mainly agrarian nature of the state. The average home price in South Dakota is $241,500, and it’s increasing every year according to local newspapers.

With increasing housing prices and limited supply of existing homes on the real estate market, many people in South Dakota have started considering construction loans as a way to finance the construction of a new home or the renovation of an existing property. 

This brief article will explain everything you need to know about getting a construction loan in South Dakota, including the benefits of doing so and what to consider before applying. 

Show Me Lenders

Benefits of a new construction loan in South Dakota

A new construction loan can help you build your dream home. You’ll be able to choose the design, location, and floor plan that suits your needs best. If the home you want to build isn’t available for sale, you can get a loan from the bank to start the home building process from scratch.

A new construction loan typically only requires interest-only payments during the construction period, giving you some flexibility with your monthly budget given that you’ll still be paying expenses associated with your current living situation.

The downside is that the process of building a home can take anywhere from six to 18 months depending on the complexity of the project. It’s not a project for the faint of heart, so you’ll want to make sure you are prepared for the process and working with the appropriate team.

Get Quotes for Your Construction Loan

4 Best construction loan lenders in South Dakota

If you’re in the market for building a home in South Dakota, consider these construction mortgage loans that are available to state residents.

1. BankWest

BankWest has been operating in South Dakota for more than 130 years. If you’re looking for a bank with a long history in the state, this bank is for you. BankWest provides the full suite of financial products to its customers, including construction loans.

Not surprisingly, we were particularly interested in learning about the construction loan offered by BankWest. Here’s what we found during our research:

  • Your initial construction loan allows for draws to pay building expenses to the general contractor throughout the construction process.
  • Your plans and bids must be provided to the bank. The bank will use these to hire an appraiser to perform an “as completed” value estimate.
  • Borrowers may secure a construction loan for up to 95-100% of the project cost.
  • Land/lot expenses can be rolled into your construction loan.
  • You’ll work with the same BankWest loan expert during the construction loan process from the construction phase of your project through converting your loan to permanent financing.
  • 25% down payment required for land/lot only loans
  • Lot loan balance can be rolled into the construction loan when you’re ready to build

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

2. Wintrust Mortgage

Wintrust Mortgage is one of the top 20 bank-owned retail mortgage loan originators in the country that originates in excess of $4 billion in loans annually in all 50 states. 

Recently we asked Wintrust Mortgage to provide us with details on their construction loan terms and this is what they said:

  • One-Time Closing. Only pay the closing cost once
  • Lock in your rate upfront and avoid interest rate risk
  • FHA (first time homebuyers), VA, and Conventional options
  • 0% Down up to $822,375 (VA ONLY)
  • 3.5% Down up to FHA County Limits ($356,362-822,375) 
  • 10% Down on Second homes
  • FICO 680+
  • Loans must include building no Lot/Land Loans 
  • Maximum of 10-acres per build site
  • Stick Built and Modular Homes ONLY
  • NO log homes or metal homes (barndominium)
  • Tear Down and Rebuilds do qualify
  • No self-build or owner builders. The builder must be approved. 
  • Does Not allow ADUs (Accessory Dwelling Unit – Granny Flat/Garage Conversions/Basement)
  • Now lending in all 50 States

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

3. Black Hills Federal Credit Union

Black Hills Federal Credit Union started in 1941 and serves the entire state of South Dakota through its 15 locations. If you’re looking to partner with a credit union during your construction project, they could be a good choice. Black Hills Federal Credit Union offers a full range of financial services, including construction loans.

We contacted Black Hills Federal Credit Union to gather information about their construction loan and here is what they said:

  • Interest-only payments during the construction period (up to six months)
  • Money is advanced incrementally during this time
  • Loan automatically converts to long-term conventional financing
  • Only pay closing costs once
  • Loans available to renovate (add a garage or finish a basement) before you move in

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

4. US Bank

US Bank is a large home loan lender with a solid construction loan option. They can’t work with owner-builders, investment property, or manufactured homes, but if you fall outside of that category (e.g. a primary residence or a second home), then you may like the options.

We reached out directly to US Bank to get details on their home construction loans and this is what we heard back:

  • 720 credit score required
  • 10% down up to $750,000
  • 20% down up to $1.5 million 
  • 25% down up to $2 million
  • Loans up to $10 million are available 
  • Primary residence and Second homes only
  • May use lot purchase as a down payment
  • Major renovation loans are available
  • 12-24 month Build periods are available 
  • 30 year fixed One-Time-Close or ARM (5/1, 7/1 & 10/1)
  • One-time closing automatically converts to permanent financing at the end of construction
  • Interest-only payments during construction
  • No prepayment penalty
  • No Spec or Investment Builds
  • No Pre Starts

When you’re ready to connect with a loan officer, use our form to quickly match with construction loan programs based on your specific circumstances.

Does a South Dakota construction loan make sense for you?

A construction loan can be a great way to finance your next home or renovation project, but it’s not appropriate for everyone. These are some of the factors you should consider before you take out a construction loan:

If you need to borrow money from a mortgage lender or other financial institution, it’s worth considering whether you can afford the payments. Just because you can cover the expenses doesn’t necessarily mean that you should. 

Construction loans are typically harder to get approved for than traditional financing options because there is no underlying collateral supporting the mortgage, so the bank will examine your credit history and ability to repay the loan more closely.

At the end of the day, a South Dakota construction loan is a great way to realize your dream of homeownership, but there are many things to consider before applying for a new construction loan in South Dakota.

Looking for a construction loan in a different state?

Click on another state to find the best construction loan lenders in that state.

Find a Construction Loan Specialist

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

Save more money than your friends

One email each week covers personal finance, financial independence, investing and other stuff for lawyers that makes you better.