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2022 South Carolina First-Time Homebuyer Programs

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South Carolina offers first-time homebuyer programs that provide down payment assistance and tax credits to qualified borrowers. You must qualify for one of these programs based on factors such as income in order to be eligible. There are other restrictions, such as limits on how expensive the home can be and minimum occupancy periods to avoid a payback requirement. Find out which of these programs might help make your dream of a first home in the Palmetto state come true.

South Carolina statewide and local first-time homebuyer programs

The South Carolina State Housing Finance and Development Authority (SC Housing) administers the state-supported home buying programs for first-time homebuyers. Restrictions on income and housing prices are common, and you must be able qualify for a primary mortgage. Here is a snapshot of these programs and how much assistance they offer.

Program nameAssistance amountAssistance typeWhere it’s available
SC Housing Homebuyer ProgramDown payment assistance up to $8,000Forgivable second mortgageStatewide
SC Housing Mortgage Credit CertificatesUp to $2000 a yearTax creditStatewide
Palmetto Home AdvantageUp to 5% of the loan amountForgivable second mortgageStatewide
County First InitiativeUp to $8,500 down payment assistanceForgivable second mortgageSelect counties

What to know about different types of down payment assistance

Although the money that first-time homebuyer down payment assistance programs can provide may essentially be free, it comes with some strict rules you need to know to avoid having to pay it back. Here’s how each type of down payment assistance works.

  • Forgivable second mortgage. A forgivable second mortgage can allow you to finance closing costs and your down payment. A mortgage lien is still secured against your home, but you typically don’t have to make payments at all or cover interest charges out of pocket. You will have to repay a portion of the funds if you refinance or sell before the minimum residency time is up.
  • Tax credit. Mortgage tax credits allow you to use a portion of the interest you pay on your mortgage to reduce the amount of federal or state tax you are charged each year. This can effectively increase your annual income, which can help you to qualify for a mortgage and make the payments more easily.

How South Carolina first-time homebuyer programs work

Whether you plan to apply to a program listed on this page or another more local one, here are the general steps you’ll take to get approved for a South Carolinian first-time homebuyer program:

  1. Pick a program. Do some research and check out the program requirements and offers to see which program(s) can provide you the most benefit. If you have any questions, talk to the organization before you invest your time going to a class.
  2. Get educated. Most first-time homebuyer programs require that applicants take a free homebuying class before completing an application for assistance.
  3. Get preapproved from an approved lender. Unless the assistance program you want to work with directly provides a mortgage for the whole house, you must still get a primary mortgage. SC Housing provides a list of its approved lenders.
  4. Aim for a house within the program’s price range. Some programs limit how expensive your house can be or have a max amount they’re able to give.
  5. Know the payback requirements. Plan to either live in the home for the full time that the program requires for loan forgiveness or budget and save to pay back the assistance.

South Carolina first-time homebuyer program requirements

In many cases, the minimum requirements for assistance programs can be strict, including credit score minimums and debt-to-income ratio maximums. SC Housing works with borrowers who have FHA, VA, USDA and conventional loans. The table below provides you with program requirements to help you determine which ones are the best fit:

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
SC Housing Homebuyer Program620UnspecifiedVaries10 or 20 years
SC Housing Mortgage Credit CertificatesVariesUnspecifiedLess than 80% of the area median income (AMI); $68,700 to $114,940N/A
Palmetto Home Advantage640UnspecifiedLess than 80% of AMI or $103,00010 years
County First InitiativeVariesUnspecifiedVaries depending on household size; $54,950 to $114,94010 or 20 years

THINGS YOU SHOULD KNOW

Many first-time homebuyer programs will compare your individual or household income to the local median income to determine if you qualify for assistance. The U.S. Department of Urban Development (HUD) provides a lookup tool if you want to see the most up-to-date data on South Carolina’s median income by county.

National first-time homebuyer programs

All the programs listed above require that you live in South Carolina. But you could combine a state-specific program with a national program for a greater leg up. Some programs, such as down payment assistance programs, require that you get a loan separately. Here are some national loan programs that homebuyers, first-time buyers or not, can use.

  • Conventional loans. Private lenders offer conventional mortgages, which typically cost less but have higher credit score, income and down payment qualifications. Examples of conventional first time homebuyer loans include the Fannie Mae HomeReady® and Freddie Mac Home Possible® programs.
  • FHA loans. The Federal Housing Administration (FHA) offers a mortgage program to homebuyers who have lower credit scores and/or a higher debt-to-income ratio. A downside is the FHA mortgage insurance premiums.
  • VA loans. Active-duty service members, veterans and eligible spouses could apply for a VA loan, which is a mortgage backed by the U.S. Department of Veterans Affairs (VA). They offer low credit requirements, 100% financing and no mortgage insurance.
  • USDA loans. If you’re looking for a rural home, consider aiming for an area designated as rural by the U.S. Department of Agriculture (USDA). USDA home loans offer purchase and home improvement loans to people who have low to moderate income and who live in select areas.

FAQs about South Carolina’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in South Carolina?

HUD defines a first-time homebuyer as someone who hasn’t owned a home that is permanently affixed to a permanent foundation in at least three years. So even if you aren’t a true “first-time homebuyer,” you may qualify for assistance.

Can I qualify for down payment assistance in South Carolina?

You could qualify for down payment assistance in South Carolina if you meet program requirements – particularly credit and income requirements – and the organizations have funds available.

How much of a down payment do I need to buy a house in South Carolina?

You may not need any down payment if you’re eligible for a VA or USDA loan. FHA loans, however, require at least 3.5% and conventional lenders typically have a 3% minimum.

Home price trends in South Carolina’s major areas

Most South Carolina home prices increased less than 10% in 2021. Homes in Charleston County were an exception. Already the most expensive place to buy a home in the state, Charleston County’s median home price increased by 21% year-over year in the fourth quarter of 2021, to $436,895, upping the expected monthly mortgage payment $338 more to $1,675, according to the National Association of Realtors. The least expensive SC county in which to purchase a home is Allendale, which experienced an 18.2% price increase but has a median home price of only $61,168, translating to a typical monthly mortgage payment of $234 (up from $192 the previous year).  If you’re ready to start looking for a home, you can see how much you qualify for with a mortgage preapproval.

 

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