South Carolina First-Time Home Buyer Programs of 2021

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By NerdWallet 
South Carolina First-Time Homebuyer Programs of 2018

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Officially known as the South Carolina State Housing Finance and Development Authority, SC Housing works with lenders, home builders and government officials to assist first-time home buyers in the Palmetto State.

SC Housing offers low-income and low- to moderate-income residents down payment and closing cost assistance to help make homeownership happen.

National first-time home buyer programs

While not specially targeted to South Carolina residents, these national programs help first-timers across the U.S. make the leap into homeownership.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

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SC Housing highlights and eligibility requirements

SC Housing enables 30-year, fixed-rate FHA, VA, USDA or conventional loans with down payment assistance up to $7,000. Local lenders make the mortgages, according to SC Housing guidelines. Loan costs include a 1% origination fee.

Each loan program has its own list of details, but here is an overview of some common characteristics.

Highlights

  • 30-year fixed-rate loans.

  • Down payment and closing cost assistance.

  • Reduced mortgage insurance premiums on some loans.

Eligibility

  • Completion of a home buyer education course is required for down payment assistance.

  • A minimum credit score of 620 may be required, depending on the program — though your qualifying credit score does not assure loan approval.

  • Borrowers can be first-time home buyers or repeat buyers, depending on the program.

SC Housing first-time home buyer programs

SC Housing home loans

Best for:

Low down payment, closing cost assistance, down payment assistance

What you need to know:

SC Housing offers 30-year fixed-interest rate loans and down payment assistance to first-time buyers through participating lenders, including conventional, FHA, VA and USDA mortgages. Qualifying requirements vary by loan program. Eligible South Carolina properties include single-family homes, modular homes, townhomes and lender-approved condominiums.

Forgivable down payment assistance

Best for:

Down payment assistance, closing cost assistance

What you need to know:

For households earning 80% of the local median income or less, $7,000 cash assistance is available as a forgivable second mortgage. There is no interest charged and no payments are due. After 10 years of residing in the home, the loan is forgiven. For households earning more than 80% of the local median income, the loan is forgiven after 20 years in the home.

Palmetto Home Advantage

Best for:

Down payment assistance, closing cost assistance, low mortgage insurance

What you need to know:

This program for first-time and repeat home buyers offers government-backed and conventional loans at market rates with forgivable down payment assistance up to 5% of the loan amount. Income and sale-price limits apply. Palmetto Home Advantage offers reduced rates on mortgage insurance, which can be canceled entirely when requirements are met.

Summary: 2021 SC Housing first-time home buyer programs

  • SC Housing home loans are combined with assistance programs and include conventional, FHA, VA and USDA mortgages.

  • Forgivable down payment assistance up to $7,000 is offered.

  • Palmetto Home Advantage offers government and conventional loans at market rates with reduced mortgage insurance rates, even for repeat buyers.

Although these programs are administered by SC Housing, locally authorized lenders do the paperwork and have varying qualifying guidelines. Shop around and compare offers from lenders to get the best terms for your particular circumstance.

For details on available loan and assistance programs, visit the SC Housing website.

To get started, consult the list of lenders who participate in SC Housing programs.

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