First Time Home Buyer Loan Programs in South Carolina
The South Carolina State Housing Finance and Development Authority offers first time homebuyer programs designed to assist low-to-moderate-income families and individuals. These programs provide competitive fixed-interest-rate mortgage loans and, when available, offer down payment or closing cost assistance.
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SC Housing Homebuyer Program
The SC Housing Homebuyer Program offers various loan options like 30-year conventional, FHA, VA, and USDA loans with low, fixed interest rates. It also provides down payment assistance to make buying your first home more affordable. This program is available to first time homebuyers, as well as repeat buyers in specific targeted counties. Furthermore, single parents, veterans, or households with a disabled member may qualify for this program.
SC Housing Palmetto Home Advantage
The SC Palmetto Home Advantage program offers a variety of loan choices, including conventional, FHA, VA, and USDA options. These loans are open to first time, move-up, and repeat buyers, without any specific requirements for first time homebuyers. You could utilize these loans to buy new or existing homes, including manufactured housing (Conventional and FHA), in all 46 South Carolina counties.
South Carolina Forgivable Down Payment Assistance
South Carolina does not provide grants to first time homebuyers. Instead, it offers forgivable second mortgage loans to eligible applicants. These forgivable second mortgages are quite flexible, featuring 0% interest and no monthly payments. Their forgiveness period spans either 10 years or 20 years, depending on your household income. The loan will be fully forgiven at the end of this designated period.
10 Years: If your household income is at or below 80% of the area median income when you obtain the down payment assistance loan, then the loan will be forgiven after a decade, provided you reside in the home throughout this time.
20 Years: If your household income exceeds the 80-percent threshold, then the loan will be forgiven over a 20-year span. Again, living on the property for the entire 20-year term is a requirement for loan forgiveness.
The South Carolina Housing DPA Program
The SC Housing down payment assistance program can be used for down payments, closing costs, and prepaid items. Borrowers must meet sales price and income limits, as well as SC Housing’s primary mortgage requirements. South Carolina down payment assistance is available for new and existing homes, provided as a second mortgage with a 15-year term. It carries a zero-interest rate and requires no monthly payments. To qualify for full forgiveness, the borrower must occupy the property for the entire 15-year lien term.
SC Palmetto Home Advantage DPA
The Palmetto Home Advantage DPA program provides South Carolinians down payment assistance of up to 4% or 5% of the loan amount. To be eligible, a minimum credit score of 640 is required. Much like the SC Housing Homeownership Program, this assistance takes the form of a ten-year forgivable loan with no interest.
FHA 100% DPA
This program provides homebuyers with 100% financing without requiring a down payment. However, closing costs are still required. This is achieved through a combination of a 1st and 2nd mortgage. This DPA program can be used to obtain an FHA loan and the amount of the 2nd mortgage can be up to 3.5% of the sales price or the appraised value, whichever is less. The term for the 2nd mortgage is 10 years.
Eligibility for 100% FHA DPA
To qualify for the program, you need to have a minimum credit score of 620 and a maximum Debt-to-Income (DTI) ratio of 45%. You must complete a Homebuyer Education course. And the eligible properties for financing are defined by FHA guidelines based on the maximum HUD county limit. The program covers single-family homes, duplexes, manufactured homes, PUDs, townhouses, and condos.
SC Mortgage Tax Credit Program
The SC Mortgage Tax Credit Program provides eligible homebuyers with an annual federal income tax credit of up to $2,000. This credit can be utilized to lower tax payments, increase refunds, or bolster take-home pay. It can also improve mortgage eligibility and loan amounts. It’s essential to be aware that acquiring this credit comes with a $500 cost, and lenders may charge an additional $500 processing fee, which could be paid by either the borrower or the seller. While it works with different financing options, it’s important to note that it’s not compatible with certain SC Housing programs.
SC Housing County First Initiative
The SC Housing County First Initiative is a rural initiative aimed at assisting potential homebuyers in underserved communities facing challenging local economic conditions. It’s accessible to both first time and move-up borrowers, offering up to $8,500 in forgivable down payment assistance and special fixed-rate financing options. Borrowers have the flexibility to choose from FHA, Conventional, USDA, or VA mortgages.
If you reside in Abbeville, Allendale, Bamberg, Barnwell, Beaufort, Calhoun, Chester, Clarendon, Dillon, Edgefield, Fairfield, Georgetown, Hampton, Jasper, Lee, Marion, Marlboro, McCormick, Newberry, Orangeburg, Saluda, Union, or Williamsburg County, then don’t hesitate to inquire with your realtor or mortgage lender about the County First program.
FAQ’s About South Carolina First Time Homebuyer Programs
What do you need to qualify as a first time home buyer in SC?
To be classified as a first time homebuyer in South Carolina, you should either have never owned a home or not owned one in the past few years. Specifically, applicants are regarded as first time homebuyers if they haven’t owned a primary residence for at least the last three years.
Are these programs exclusive to first time homebuyers only?
These programs are not necessarily exclusive to first time homebuyers. Each program has its unique eligibility criteria. Other potential qualifiers include repeat buyers in specific targeted counties, single parents, veterans, households with a disabled member, and move-up buyers. Discuss with your loan officer which program you may be able to qualify for.
How do I apply for these programs?
To apply for these programs, start by reaching out to an approved lender like Direct Mortgage Loans, who is knowledgeable about the specific requirements. Your lender will guide you through the application process and help you determine which program best suits your needs.
Can I combine multiple programs to maximize benefits?
You can combine certain first time homebuyer and down payment assistance programs, but keep in mind that there are program specific requirements; some allow combination, while others do not. Review each program’s terms and conditions to see if combining them boosts your home buying benefits.
Do these programs only apply to specific areas within South Carolina?
Unfortunately, the answer isn’t the same for all South Caroling programs. For instance, the SC Housing program operates statewide, allowing eligible South Carolinians to apply to the program. In contrast, some South Carolina down payment assistance programs are exclusively available to buyers in specific targeted regions.
Based on 30 year fixed rate loans. Loans are subject to Eligibility. Eligibility and approval is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, Veteran status and underwriting requirements. . Direct Mortgage Loans, LLC NMLS ID# is 832799 (www.nmlsconsumeraccess.org). Direct Mortgage Loans, LLC office is located at 11011 McCormick Rd Suite 400 Hunt Valley, MD 21031. Equal housing lender.
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