Down Payment Assistance Programs for First-Time Homebuyers in South Carolina

The “Palmetto State” is famous for its rich history, stunning landscapes, vibrant culture, and – of course – coastal beaches, such as Myrtle and Hilton Hand Island. As the 40^th-largest and the 23^rd-most populous state in America, South Carolina is home to lush mountains in the Upstate and historic urban centers of Charleston or Columbia. It’s especially famous for hosting 350+ golf courses and cultural festivals that’ll keep happening throughout the year.

If there’s one thing lacking in S. Carolina, it is a decent housing market. Despite the rapid urban growth of the Palmetto State, many millennials struggle to buy their first home there. The median home price rose by 3.7% between 2023 and 2024, selling at a whopping $383,000! It makes it very difficult for first-time homebuyers to get a space of their own in South Carolina. After all, the mortgage rate stands at a huge 6.04% for a 30-year fixed period (up from 5.79% this January!).

Feeling locked out of the housing market? Don’t let go of your homeownership aspirations. You should look into the down payment assistance programs provided by the South Carolina Housing Finance and Development Authority (SC Housing). These programs offer competitive fixed-rate mortgage loans and help you become a homeowner real quick. Whether you want to own a house on Sullivan’s Island or get a cheap place in Florence (SC), these programs will be of great help.

Looking for Assistance in a Specific Part of South Carolina?

This page provides an overview of the assistance programs available to first-time homebuyers in South Carolina. It covers statewide and local resources. For specific information on down payment assistance in your area, refer to the local resource provided here:

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Down Payment Assistance in South Carolina

South Carolina is in the midst of a housing affordability crisis; the yearly income required to own a home increased by 67.3% since the early days of 2020. Also, 52% of renter households are standing at risk of eviction (the highest in the nation). That’s why SC Housing partners with developers to offer affordable housing for first-time homebuyers. These initiatives include down payment assistance programs to give financial support to eligible people. Here’s a breakdown of some of these programs:

SC Housing Homebuyer Program

The SC Housing Homebuyer Program helps low-to-moderate-income people buy a house in S. Carolina. It gives a pathway to first-time homebuyers and eligible repeat buyers to secure a mortgage. It makes it a lot easier to secure a decent house in the state. Also, a second mortgage is available under this program, which gives you a 0% interest rate, a 15-year term, and no monthly payments.

Fundamentals

• Assistance type: 30-year fixed-rate mortgage
• Sponsor: South Carolina State Housing Finance and Development Authority
• Assistance amount: $6,000 in down payment assistance

Eligibility requirements

• You haven’t been a homeowner for the past three years.
• You should make this home your primary residence for a set number of years.
• You must have a credit score of 620 and 640 for FHA and VA/USDA loans, respectively.

SC Housing Palmetto Home Advantage

The SC Housing Palmetto Home Advantage Program helps both first-time and repeat homebuyers. It makes it easier for them to access affordable housing in S. Carolina. This program gives you financing options that include conventional, VA, FHA, USDA, and other loan types. Also, it’s comparable to the SC Housing Homeownership Program in the sense that you get a 10-year forgivable term with zero interest rate and no monthly payments.

Fundamentals

• Assistance type: Forgivable loans
• Sponsor: South Carolina State Housing Finance and Development Authority
• Assistance amount: Up to 4% of the loan amount

Eligibility requirements

• You need a credit score of 640 for all loan types.
• The debt-to-income rate can’t be more than 50%.
• The income limit is $127,000, no matter the size of your household.
• You can get a single-family home, townhome, or lender-approved condominium.

SC Housing Palmetto Heroes

The Palmetto Heroes Program helps first-time buyers who work in public service. These “Heroes” can be teachers, firefighters, military personnel, healthcare practitioners, law enforcement officers, etc. It will also work alongside the SC Housing Homebuyer Program. You’ll get a generous amount (up to $12,000 as a forgivable 15-year second loan) with a 0% rate of interest and no monthly payments.

Fundamentals

• Assistance type: Forgivable loans
• Sponsor: South Carolina State Housing Finance and Development Authority
• Assistance amount: $12,000 (at max)

Eligibility requirements

• You must have not owned a house in the past three years.
• You must have served in one of the many “Palmetto Hero” roles.
• You must have a fully executed sales contract for buying a house before locking the interest rate (as a borrower).

SC Housing County First Initiative

Around 20 counties in South Carolina fall under the SC Housing County First Initiative, aimed at rural and underserved areas of the state. It helps both first-time and move-up buyers in the state. You can access up to $8,500 in forgivable down payment assistance to cover not just down payments but closing costs as well. That’s how this program promotes homeownership and community stability in these areas.

Fundamentals

• Assistance type: Special fixed-rate financing options
• Sponsor: South Carolina State Housing Finance and Development Authority
• Assistance amount: $8,500  (at max)

Eligibility requirements

• The same income and purchase price limits are applicable here as the ones in the SC Homebuyer Program.
• Different housing types are eligible, including single-family homes, condominiums, townhomes, and modular homes.
• Only certain counties are included, such as Abbeville, Allendale, Bamberg, Chester, Clarendon, Dillon, Edgefield, Fairfield, Georgetown, Hampton, Jasper, Lee, Marion, Marlboro, etc.

South Carolina Down Payment Assistance Program FAQs

Here are some common questions from first-time homebuyers in South Carolina seeking assistance with down payments:

1.  What down payment assistance programs are available in South Carolina?

These programs are mainly offered through SC Housing (the state’s housing finance agency). Under SC Housing, you can find the Homebuyer Program and the Palmetto Home Advantage Program. Various cities and counties have local assistance initiatives as well.

2.  What are the income limits for SC down payment assistance?

Income limits for SC down payment assistance are based on the size of your household and the county in question. Larger families have higher income limits. For instance, the income limit for a family of 1 to 2 persons in Charleston back in 2023 was almost $93,000.

3.  Can I use down payment assistance with an FHA, VA, or USDA loan?

Yes, it’s possible to combine down payment assistance with VA, FHA, or USDA government-backed loans in addition to traditional financing. The minimum down payment is 3.5% for FHA loans and 0% for VA as well as USDA loans.

4.  How do I apply for SC down payment assistance?

You can apply by first getting pre-approved for a mortgage with a participating lender. Next, you should complete a homebuyer education course. The third step involves submitting an application to the ideal assistance program with all the necessary paperwork.

5.  How is the assistance structured?

Down payment assistance comes as a second mortgage or forgivable loan. If you reside in your home for the required period (let’s say fifteen years for SC Housing), there’s no need to repay the assistance taken from SC Housing. However, selling or refinancing the house will require you to pay a prorated portion to SC Housing.

6.  Are there any occupancy requirements?

Yes, these programs will ask you to stay in that home and make it your primary residence for a certain number of years. If you don’t fulfill this requirement, then you’ll have to repay the assistance. The years in question are determined by the amount you’re getting as assistance and the county in question.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.

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