South Carolina First-Time Homebuyer Programs

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Updated on Monday, April 1, 2019

If you’d love to make a home in a sunny place where you can take a road trip to either the beach or the mountains, South Carolina may be the state for you. New homebuyers who plan to put down roots in the Palmetto State, and kick back under the palm trees that earned the state its nickname, may find a South Carolina first-time homebuyer program that can help turn dreams of homeownership into reality.

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South Carolina’s homebuyer assistance programs offer both affordable mortgages and down payment assistance to homebuyers who might not otherwise be able to afford the cost of buying a home.

In February of 2019, we researched first-time homebuyer programs in South Carolina. This included reviewing the South Carolina State Housing Finance and Development Authority website, as well as other resources. Here’s what first-time homebuyers in South Carolina need to know:

South Carolina first-time homebuyer programs

The South Carolina State Housing Finance and Development Authority (SC Housing) oversees first-time homebuyer programs in South Carolina. The agency’s mission is to create affordable, quality housing for South Carolina residents.

SC Housing programs have served over 150,000 low- and moderate-income residents since the authority’s founding in 1971. The agency offers affordable mortgages and down payment assistance to homebuyers, as well as programs that assist renters and help homeowners to stay in their homes.

Eligibility for South Carolina assistance

Homebuyers must complete a homeownership training course in order to be eligible for any SC Housing first-time homebuyer programs that offer down payment assistance.

Homebuyer Program

What is it?

The Homebuyer Program offers low- and moderate-income first-time homebuyers and others the opportunity to get a competitive fixed-rate mortgage. It can be paired with down payment assistance for eligible buyers.

The Homebuyer Program offers

  • A competitive 30-year fixed-rate mortgage
  • Compatibility with either Forgivable Down Payment Assistance or Repayable Down Payment Assistance, based on homebuyer eligibility and availability of funds.

Requirements

To participate in the Homebuyer Program, you must

  • Have a credit score of 620 or higher for an Federal Housing Administration (FHA) loan, or 640 or higher for other types of loans.
  • Make a down payment of at least 3% to 5%, with the percentage depending on the type of home loan.
  • If buying a home in a targeted area (see a list of counties here) you must not own a home at the time the loan closes. If buying in a non-targeted area, you must be a first-time homebuyer, meaning you haven’t owned your main residence in the past three years.
  • Must be buying a home in South Carolina that is an eligible property type: a single-family home, an off-frame modular home, a townhome or a condo approved by the mortgage lender

How to apply

To get started with the Homebuyer Program, contact an SC Housing lending partner located in the county where you plan to buy a house. The lender can help you determine whether you qualify for the program and get you started on the application process.

Forgivable Down Payment Assistance

What is it?

The Forgivable Down Payment Assistance program offers down payment assistance in the form of a zero-interest loan that is forgiven over 10 years.

The Forgivable Down Payment Assistance program offers homebuyers:

  • A forgivable loan of $6,000 to assist with down payment, closing costs or other homebuying expenses

Requirements

In order to be eligible for Forgivable Down Payment Assistance, you must

  • Have an income of 80% or less of the area median income (AMI)
  • Buy a home that falls within home price limits for the program

How to apply

To find out if you’re eligible for Forgivable Down Payment Assistance, contact an SC Housing lending partner located in the county where you plan to buy. The lender will help to determine if you qualify for assistance and help you through the application process.

Repayable Down Payment Assistance

What is it?

The Repayable Down Payment Assistance program offers qualified buyers down payment assistance in the form of a very low-interest fixed-rate loan that is repaid in monthly payments over 10 years.

Repayable Down Payment Assistance offers homebuyers

  • Down payment assistance of $6,000 as a repayable second mortgage on the home
  • A fixed 2% interest rate on the second mortgage

Requirements

In order to be eligible for Forgivable Down Payment Assistance, you must

  • Meet income requirements and sales price limits set by the program
  • Make more than 80% of the AMI

How to apply

To find out if you’re eligible for Repayable Down Payment Assistance, contact an SC Housing lending partner located in the county where you plan to buy a home. The lender will help you figure out whether you qualify for assistance, and walk you through the application process.

Mortgage Credit Certificates

What is it?

The Mortgage Credit Certificate (MCC) program lets qualified buyers claim a federal income tax credit on part of the mortgage interest they pay on their home.

The MCC program offers

  • A yearly mortgage tax credit of up to half of the mortgage interest paid or $2,000, whichever is less
  • Buyers may get the credit every year for as long as they stay in their home
  • Program participants may either increase the size of their paycheck to reflect the credit by having their employer withhold less in taxes, or they can choose to get the amount back as a tax refund after filing their income taxes

Requirements

To qualify for the MCC program, you must meet these requirements:

  • If buying a home in a targeted county, you may not own a home or have ownership in a home at the time of loan closing.
  • If buying a home in a non-targeted county, you must be a first-time homebuyer, meaning you have not owned your main residence in the past three years.
  • Must meet income and house price limits for the program.
  • The home you are buying must be an eligible property located in South Carolina. An eligible property is a single-family residence where the homeowner lives and may include condos, townhomes, FHA-approved mobile homes and planned unit developments (PUDs).
  • Land value of the property must be equal to or less than 30% of the appraised property value.
  • Pay an MCC program fee, a maximum of $700, or work out a deal to have the house seller pay the fee.

How to apply

To find out if you’re eligible for the MCC program, contact an SC Housing lending partner located in the county where you plan to buy a home. The lender can help you determine whether you qualify for the program and get you started on the application process.

Palmetto Home Advantage

What is it?

Palmetto Home Advantage is a new program that offers down payment assistance for first-time and repeat homebuyers, along with a reduced mortgage insurance threshold to help lower monthly payments.

The Palmetto Home Advantage program offers

  • A Fannie Mae conventional mortgage
  • Forgivable down payment assistance of 3% to 5% of the home purchase price
  • The possibility of canceling mortgage insurance when you have 18% equity in the home

Requirements

To be eligible for the Palmetto Home Advantage program, you must meet these requirements:

  • A credit score of 640 or higher
  • An annual income of $87,500 or less

How to apply

To get started with the Palmetto Home Advantage program, contact an SC Housing lending partner located in the county where you plan to buy a home. The lender can check to see whether you qualify for the program and help you apply.

Hardest Hit Fund Down Payment Assistance

What is it?

The Hardest Hit Fund Down Payment Assistance program, funded by the federal Hardest Hit Fund, offers generous forgivable down payment assistance for homebuyers buying in specific ZIP codes within three South Carolina counties.

The Hardest Hit Fund Down Payment Assistance program offers

  • An FHA mortgage
  • Down payment assistance of $15,000 that is forgiven over 10 years

Requirements

To qualify for the Hardest Hit Fund Down Payment Assistance program, you must meet the following requirements:

  • A credit score of 620 or higher
  • Must be buying within one of these 24 ZIP codes in Richland, Lexington and Sumter counties
  • Must be buying an existing home, not building a new home
  • Must meet house price and income requirements set by the program
  • The homebuyer must live in the home as a main residence

How to apply

To get started with the Hardest Hit Fund Down Payment Assistance program, contact an SC Housing lending partner located in the county where you plan to buy a home. The lender can help you determine whether you qualify for the program and walk you through the application process.

National first-time homebuyer programs

Not sure you found a first-time homebuyer program that’s right for you? If you’d like to explore your options beyond the programs offered by the state of South Carolina, you might want to consider federal first-time homebuyer programs. Check out our general guide to first-time homebuyer programs for an overview of federal first-time homebuyer programs, including features, requirements and how the programs work.

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