Sunshine and warm weather all year round, some of the lowest property taxes in the nation and a mix of stunning coastlines, beaches, historic towns. Welcome to South Carolina with all of its charms, its slower pace of life and its quintessential Southern hospitality. Are you a first-time homebuyer ready to buy your first property in the Palmetto State?
With some careful planning on your part, homeownership is an attainable milestone in South Carolina. The state’s average home price is $162,300, which is much lower than the 2021 national average of about $269,000. The coastal state also has incredibly low property taxes, to the tune of just 0.57 percent of your property’s value. That’s one of the lowest rates across the United States.
But here’s the kicker: South Carolina has a series of statewide and local homeownership assistance programs that can help first-time homebuyers with key components of the homebuying process. These resources can help you with securing a low-interest, fixed-rate mortgage to even covering off a portion of your down payment and closing costs. Ultimately, these first-time homebuyer programs could save you tens of thousands of dollars.
Whether you’re homebuying in Charleston to Hilton Head and anywhere in between, read on to learn more about these programs, their eligibility requirements and how to apply.
Who Qualifies as a First-Time Homebuyer in South Carolina?
For a quick clarification, a first-time homebuyer in South Carolina is defined as any family or individual who has never owned a home, or at least not in the past three years depending on the region. Some of the statewide programs, for example, suggest residents are still eligible if they haven’t owned a home in the past three years or longer. It’s worth waiting it out if you’re nearing the three-year mark because these programs provide a significant financial boost.
As always, when you’re doing your research, read the fine print and any limitations we list below.
Statewide Homeownership Assistance Programs
Every state has its official housing authority that runs a series of homebuyer programs to help residents with buying a home. Here, it’s the South Carolina State Housing Financing Development Authority – or SC Housing.
SC Housing’s programs are tailored to help first-time homebuyers and repeat homebuyers who haven’t owned a home in the past three years and fall within income and home purchase price limits. Across the board, homebuyers need to complete a homebuyers’ education course. You must also have a minimum credit score of 620.
Here’s a closer look at each program’s details, how to apply as well as the fine print.
SC Housing Home Loans Program
SC Housing’s home loans program is the organization’s flagship resource, providing 30-year fixed-interest rate loans with reduced mortgage insurance premiums to save you some extra cash. The program also comes with down payment assistance, which you can read more about below.
You can secure a home loan if you’re a first-time buyer or repeat homebuyer who hasn’t owned a home in the past three years. You must also work with a participating lender.
Make sure your credit score is in good standing and at about 620 and that you’re sticking to income and home purchase price limits. The guidelines show that your home’s purchase price limit will range from a maximum of $225,000 up to $300,000 depending on the county, while income limits range from $53,050 to $114,100 and the size of your household.
Single-family homes, modular homes, townhouses and lender-approved condominiums are all fair game for this program.
Read more about SC Housing Home Loans here.
SC Housing Palmetto Home Advantage Program
The Palmetto Home Advantage is one of the newer programs to join the SC Housing’s roster of homeownership resources. In this case, the program is available to first-time homebuyers and repeat homebuyers alike shopping for a new home in South Carolina.
The Palmetto Home Advantage follow the same structure with offering a 30-year fixed-rate home loan set at a competitive interest rate. Homebuyers must stick to income, credit score and home purchase price limits, however the program differs slightly by providing additional financial assistance.
Eligible homebuyers can opt for a lower down payment, to the tune of 3 percent down so you don’t need to save up a small fortune. You can also choose a 5 or 8 percent down payment to lower your monthly mortgage costs.
The Palmetto Home Advantage program also comes with reduced mortgage insurance. If your down payment is less than 20 percent of your home’s purchase price, you need to pay for your lender’s mortgage insurance in case you default on your loan. With the Palmetto Advantage you may be eligible for reduced rates on this mortgage insurance expense.
Finally, homebuyers eligible for the Palmetto Advantage can receive financial help with their closing costs and other fees.
This is a pretty generous program worth exploring. To learn more, read the full details and the fine print on the Palmetto Home Advantage’s designated homepage.
SC Housing County First Initiative Program
The County First Initiative program is aimed specifically at helping South Carolina residents living in “undeserved” – or economically disadvantaged – areas of the state. You can check if your county is on this list here. Some of the counties include Abbeville, Allendale, Bamberg, Barnwell, Calhoun, Chesterfield, Clarendon, Colleton, Dillon, Edgefield, Fairfield, Georgetown, Hampton, Jasper, Marion, Marlboro and Newberry.
If your new home is in a targeted area, you may be eligible for the County First Initiative program, which offers fixed-rate mortgages that are set below market rate. You’re also eligible for up to $8,000 in down payment assistance to go towards your home purchase.
The program follows identical income, credit score and home purchase price limits. You also need to complete a homebuyers’ education course to be eligible.
This program is available for first-time and repeat homebuyers. In this case, the focus is on helping homebuyers in targeted regions. You can read more about the County First Initiative on its dedicated website.
SC Housing Forgivable Down Payment Assistance Program
We all know coming up with a 20 percent down payment is one of the biggest obstacles standing in the way to homeownership. SC Housing is trying to help homebuyers with this tricky part of the process via a Forgivable Down Payment Assistance Program (DPA) that can be paired with the Home Loans or Palmetto Home Advantage programs.
If your household earns 80 percent or less of your local median area’s income, you’re eligible for a $7,000 forgivable loan to help with your down payment. The loan is set at 10 years and a portion is forgiven each year. That means that if you use your home as your primary residence for a decade, you don’t have to pay back a penny.
If your household earns more than 80 percent of your local median area’s income, you’re eligible for a $7,000 loan set up as a 20-year-long second mortgage that’s forgiven over an extended period of time. There is no interest charged and no payments are made while you’re using the home as your full-time residence.
If you sell your home, the balance is due but it’s prorated depending on how long you’ve lived on the property.
To be eligible, you must first secure an SC Housing home loan via any of the programs above. You must also complete a homebuyers’ education course.
Read more about the SC Housing Down Payment Assistance Program.
SC Housing Mortgage Credit Certificate
Not all states’ housing authorities provide MCCs – luckily for homebuyers in the Palmetto State, SC Housing does.
The MCC provides eligible homebuyers a non-refundable federal income tax credit used with your mortgage. In a nutshell, it reduces your federal income taxes, creating additional income for you to use towards your mortgage payments and other household expenses.
Qualified homebuyers can credit up to 50 percent (up to a $2,000 maximum) of their annual mortgage interest paid against their year-end tax liability. The tax credit is allowed every year for the life of your original mortgage (up to 30 years).
The MCC can only be issued by SC Housing through a participating lender before closing and they’re typically set aside for low- to moderate-income homebuyers. Household income limits, and purchase price limits still apply.
SC Housing encourages homebuyers to double- and even triple-dip where possible. If you can secure an initial Palmetto Home Advantage loan with the lower mortgage insurance premiums, and Down Payment Assistance, you may still qualify for an MCC. At the end of the day, this trio of incentives could lead to thousands of dollars saved over the lifetime of your home loan. You can also double up with the original Home Loans program or the County First Initiative Program with down payment assistance and an MCC.
Read more about the Mortgage Credit Certificate.
Homebuyer Programs by Location in South Carolina
While SC Housing’s series of statewide programs listed above can put you on the path to homeownership, there are local homebuyer assistance programs across South Carolina worth doing your research on, too.
Read more for our list of local programs.
If you’re shopping for a new home in Charleston, you’re in luck. The vibrant city has a thriving real estate market with over 150 new home communities and there are local assistance programs available.
If you’re a first-time homebuyer or a repeat homebuyer who is in a low- or middle-income bracket, check in with the Housing Authority of the City of Charleston and the Charleston County Housing and Redevelopment Authority.
Both organizations offer programs to help homebuyers who face financial difficulty. They especially offer help to low-income families, single-parent families and seniors,
Homebuyers with their sights set on South Carolina’s capital city should look into Columbia’s string of financial assistance programs to help homebuyers, first-timers and repeat buyers alike.
For starters, the city runs an Affordable Housing Loan Program, offering down payment assistance in the form of a second mortgage that can be worth up to 20 percent of your home’s loan amount. Essentially, this second mortgage will completely cover your down payment, and it’s set at a rate of 1 percent below the market rate, fixed for 30 years by the city. You also waive the need for private mortgage insurance.
You must contribute $500 towards your down payment regardless of your home’s purchase price. You must stick to household income limits and purchase price limits, too. You must also complete homebuyers’ education coursework and financial counseling provided by the city.
You can read more about Columbia’s Affordable Housing Loan Program here, including details on how to apply, and income and purchase price limits.
The City also runs an Employee Mortgage Program, provided to city of Columbia employees who have been working there for at least 12 months. In this case, you’re eligible for a first mortgage of 75 percent of your home’s sales price at market rate for 30 years, followed by a second mortgage worth 25 percent of your home’s sales price set at 2 percent interest for 30 years. With this combination of loans, you’re off the hook for saving up for a down payment and can take your time repaying the city for your home purchase.
All single-family detached homes are eligible as long as they’re within City of Columbia limits.
You can check out the Employee Mortgage Program here.
Columbia also has a Bank On initiative to help residents access no-cost checking and savings accounts along with access to in-depth financial education. If you’re paying $10 to $20 or more for your every day banking, look into this program to help you waive these fees. It could save you hundreds of dollars that can go towards your mortgage instead. Bank On is partnered with Start Fresh, which is a free three-part financial education workshop teaching Columbians about budgeting, saving, building your credit and homeownership.
You can read more about Bank On and Start Fresh here.
Homebuyers from York County and into Lancaster County should look into the Fort Mill Housing Authority Down Payment Assistance Program. It provides down payment assistance of up to 8 percent of your home’s purchase price for any homes within Fort Mill limits.
Your home must be within purchase price limits ($177,175 in York County, and $172,632 in Lancaster County), and your home must be five years old or less. You must also contribute at least $500 of your own funds towards your home’s purchase.
In this case, you don’t have to be a first-time homebuyer to qualify. You must, however, complete eight hours of homebuyers’ education coursework.
If you’re interested in this Down Payment Assistance Program you can read more on the Fort Mill Housing Authority website.
If you have your heart set on moving to the Greenville-Spartanburg area in upstate South Carolina, there are two organizations you should contact.
The Greenville Housing Authority has a slate of programs, including low-income housing tax credits, homeownership assistance, and housing assistance for families, the elderly and disabled individuals. This includes homebuyers’ assistance and education, foreclosure prevention and home rehabilitation for existing homeowners who need help with renovating their home.
You can read more about these initiatives on the Greenville Housing Authority website.
If you’re in Spartanburg, you are in luck; the region’s housing authority runs a Housing Choice Voucher program to help low-income families shift their existing Housing Choice rental assistance voucher into a payment that goes towards their mortgage. In a nutshell, the program helps families own their own home.
To qualify, you must be a first-time homebuyer who receives a Housing Choice rental voucher to cover a portion of your existing monthly rent.
You must meet minimum income requirements and complete a homebuyers’ education course and counseling programs provided by Spartanburg Housing.
You read more about the Housing Choice Voucher program here.
If you’re a low-income household dreaming of buying a home in Myrtle Beach, look into the region’s Habitat for Humanity chapter. They build and sell homes – at no profit – every year with 30-year interest-free mortgages to make homeownership feasible for families facing financial difficulty.
To qualify, you must meet income requirements that demonstrate you’re priced out of the market. You must not have filed for bankruptcy in the past four or five years, and you must not have any collections, liens or judgments against you. You also must contribute at least $2,000 towards your home’s closing costs and have a credit score of at least 620.
Habitat for Humanity also requires that you add some sweat equity into your new home. You must volunteer 300 hours into its construction prior to moving into your home.
If you’re interested in this project and you’re living in or moving to the Myrtle Beach area, take a look at the Habitat for Humanity program.
Homebuyers with their sights set on Rock Hill can turn to the city’s First-Time Homebuyer Program, which offers down payment and closing cost assistance of up to $5,000. Occasionally, the city also offers larger amounts of financial assistance.
To be eligible, you must meet income limits set by the city – your income may not exceed 80 percent of the area median income. You must contribute $500 towards your home’s down payment.
You must also complete a homebuyers’ education course. Don’t worry about where to sign-up for that either – the city of Rock Hill provides a first-time homebuyers’ education program that comes with counseling.
The $5,000 is provided in the form of a second mortgage that’s forgiven annually over the course of five years.
Read more about the First-Time Homebuyer Program.
Ready to Buy a Home in South Carolina?
If you’re ready to call South Carolina home, get ready for a comfortable life in the birthplace of sweet tea and barbecue. You’ll be treated to a variety of housing options in the state’s real estate market, too.
Whether you’re thinking of settling down in charming Charleston or you prefer the busy, metropolitan life of Columbia, there is no shortage of housing options in the Palmetto State. You may even want to live by the coast and explore neighborhoods in Myrtle Beach.
And wherever you decide to hunker down, there are multiple programs to help you secure your home purchase.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.