Yes and no. Yes it’s based on actual source material, no because the source material is part of the extended universe that the original author’s son has written. His books are a mixed bag and die-hard Dune fans generally do not consider them canon. I’m still looking forward to it as a Dune fan though, and I hope it turns out good.

Anyone know if this is actually based on actual source material?

Close to the source material, with some changes to bring it from page to screen.

From the showrunner:

Dune: Prophecy showrunner/executive producer Alison Schapker says the series will take place in the wake of the Butlerian Jihad, when humanity rose up against artificial intelligence. It will see the founding of the Bene Gesserit sisterhood, the enigmatic faction that groomed Paul Atreides to become the galactic messiah, as seen in Dune:

Source: https://collider.com/dune-prophecy-plot-creators-explain/

Bringing it to screen

Dune: Prophecy underwent a challenging journey from page to screen. Inspired by the novel Sisterhood of Dune, which was co-written by Brian Herbert (the son of Dune author Frank Herbert) and Kevin J. Anderson, it underwent a number of creative shakeups in pre-production, including the replacement of original star Shirley Henderson with Williams.

Source: https://collider.com/dune-prophecy-plot-creators-explain/