From hiking the wooded trails of the Upstate to watching waves in Charleston or Hilton Head, living in South Carolina means loving the outdoors. The cost of buying a home in The Palmetto State has been on a fast uptick the last few years, but if you’re a first-time homebuyer, you have plenty of options to combat those rising prices. The South Carolina State Housing Finance and Development Authority — known simply as SC Housing — has been working to make homes more affordable in the state for the past 50 years.

South Carolina first-time homebuyer loan programs

SC Housing Homebuyer Program

SC Housing’s Homebuyer Program includes 30-year conventional, FHA, VA and USDA loans with competitive fixed interest rates and down payment assistance to lessen the sticker shock of getting into your first home. The program is open to first-time homebuyers, categorized as those who have not owned a home in the past three years, or repeat buyers in certain “targeted counties.” Single parents, veterans or those with a member of the household living with a disability might also qualify for the program.

Borrower requirements:

  • 3 percent down payment for conventional loan; 3.5 percent down payment for FHA loan; no down payment required for VA or USDA loan
  • 640 minimum credit score for conventional, VA and USDA loan; 620 minimum credit score for FHA loan
  • Must meet SC Housing income limits, which vary based on where you’re buying and how many will live in the household

Property requirements:

SC Housing Palmetto Home Advantage

SC Housing’s Palmetto Home Advantage program is not solely for first-time homebuyers, but you can use the offering for your first home purchase. The program offers competitive interest rates along with down payment assistance of up to 4 percent of the loan amount. If you need to pay mortgage insurance (an expense paid by most homebuyers who can’t put down 20 percent), the program offers a reduced insurance rate, as well.

To qualify, you’ll need a minimum credit score of 640 and to meet income limits, which vary depending on whether you’re obtaining a conventional, FHA, VA or USDA loan.

South Carolina down payment assistance

Both of SC Housing’s down payment assistance offerings come with an attractive disclaimer: You might not have to pay them back. These are second mortgages with no interest and no monthly payments and the option to forgive the loan altogether. That forgiveness happens at two different intervals based on how much you earn:

  • 10 years – If you earn 80 percent or less of the area median income (AMI) when you take out the down payment assistance loan, the loan will be forgiven after one decade, provided you live in the home the entire time.
  • 20 years – If you earn above the 80-percent threshold, the loan will be forgiven in 20 years. Again, you have to live in the property for the entire 20-year term.

SC Housing Down Payment Assistance

SC Housing’s standard down payment assistance program offers up to $8,000 that can be used to cover part of the down payment or your closing costs. The eligibility requirements are the same as those that come with the Homebuyer Program with one addition: You need to complete a homebuyer education course.

SC Housing County First Initiative

SC Housing’s County First Initiative is for both first-time and repeat homebuyers living away from the state’s dense urban areas. Through this program, borrowers can qualify for additional help with the down payment — up to $8,500 — if purchasing a home in these counties:

  • Abbeville
  • Allendale
  • Bamberg
  • Barnwell
  • Calhoun
  • Chester
  • Chesterfield
  • Clarendon
  • Colleton
  • Dillon
  • Edgefield
  • Fairfield
  • Georgetown
  • Hampton
  • Jasper
  • Lancaster
  • Lee
  • Marion
  • Marlboro
  • McCormick
  • Newberry
  • Saluda
  • Union
  • Williamsburg

The County First Initiative follows the same income and purchase price limits that apply to the Homebuyer Program.

Other first-time homebuyer loan programs

In addition to securing help at the state level, you might be able to find homebuying assistance through local programs. While SC Housing’s down payment forgiveness period is 10 to 20 years, some local options offer shorter timeframes for eliminating that second mortgage. In Greenville County, the CommunityWorks down payment assistance program offers up to $5,000 that can be forgiven in five years or up to $10,000 that can be forgiven in eight years. In Richland County — where the state capital Columbia is located — a homeownership assistance program offers up to $10,000 to help with down payment and closing costs, also able to be forgiven in five years.

Get started

As a first-time homebuyer, you might feel overwhelmed when you start browsing listings. Use SC Housing’s list of real estate agents to find one that can help you through the process. When you have a firm grasp of how much help you can receive and how much you’re prepared to spend on a home, you can compare interest rates and options from the agency’s approved lenders.