South Carolina First Time Home Buyer – 2023 Loan Programs
Are you a first time home buyer looking to purchase a home in South Carolina? On this page you can learn about the different types of mortgage programs that are available to first time home buyers. You may also view the different down payment assistance programs that are currently being offered in South Carolina.
South Carolina First Time Home Buyer Loans
Below are some mortgage programs that are available to first time home buyers.
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment. If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI). However, conventional loans also offer low down payment options, such as programs that only require 3% down.
- FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan. The qualification requirements for FHA loans are much more lenient than conventional loans. This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
- USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment. These loans are intended for borrowers with low-to-moderate income. In addition to not requiring any money down, you can also finance the closing costs into the loan. This means you can essentially buy a home with no money out of pocket!
- VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment. These loans are not available to the general public, but exclusively to military/veterans.
- Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan. You can lookup the 2023 conforming loan limits for your county using this conforming loan limits lookup tool. If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
- Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan. These programs are especially helpful to self-employed borrowers, and people with a variety of credit issues (such as low credit scores and/or a recent bankruptcy). Regardless of your situation, you may considering learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.
These are some of the mortgage options that are available to first time home buyers.
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Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in South Carolina. You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.
South Carolina Down Payment Assistance Programs
First time home buyers in South Carolina may be eligible to receive down payment assistance. This includes programs offered throughout the entire state, as well as several locally offered programs. You can learn more about these programs below. If you would like some help checking your eligibility for down payment assistance, please fill out this form. We will match you with a mortgage lender that specializes in helping first time home buyers find down payment assistance.
S.C. Housing Homebuyer Program
The South Carolina State Housing Finance and Development Authority offers up to $6,000 in down payment assistance. There are two potential options for assistance:
1.) If your income is above 80% of the median average for your county, the $6,000 in assistance provided must be paid back. It will be provided on a 10 year loan term with a 2% interest rate.
2.) If your income is below 80% of the median average for your county, the $6,000 in assistance will be provided as a forgivable second mortgage with a 10 year loan term with 0% interest. As long as you stay in the home for the term of the loan, the loan will be forgiven (not have to be paid back).
With either option, you must satisfy the other program requirements, which can be viewed on the S.C. Housing website.
Hardest Hit Fund Down Payment Assistance
First time home buyers have the opportunity to receive up to $15,000 in assistance if purchasing a home in specific zip codes within Richland, Lexington, and Sumter counties. The money received will be completely forgiven if you stay in the home for 10 years. In order to qualify for this program, you must meet the following requirements:
- You must purchase an existing home (new construction is not eligible).
- The minimum credit score allowed is 620.
- You must occupy the property as your primary residence (no investment properties allowed).
- It is required that you complete a homebuyer education course.
- You must meet the property sales price and income limits for your county.
To learn more about this program, visit the SC Housing website.
Richland County Home-Ownership Program
Richland County offers up to $10,000 in down payment assistance. The funds are received as forgivable loans, and can be used applied towards your down payment and closing costs.
- Must be a resident of South Carolina.
- You cannot have a contract on a home until after your have completed the program requirements.
- Your income must be below 80% of the average median, which these limits are outlined below.
- The maximum home price allowed for an existing home is $140,000. For a new construction home it is $224,000.
- 1 Person – $38,600
- 2 Persons – $44,100
- 3 Persons – $49,600
- 4 Persons – $55,100
- 5 Persons – $59,550
- 6 Persons – $63,950
- 7 Persons – $68,350
- 8 Persons – $72,750
To learn more about this program, visit the official website for Richland County.
City of Rock Hill First-Time Homebuyer Program
The Housing Development Corporation of Rock Hill offers up to $5,000 in down payment and closing cost assistance to eligible first time home buyers. The assistance is provided as a second mortgage that is forgiven in increments over the course of 5-20 years.
- You must purchase a home within the city limits of Rock Hill.
- Complete a home buyer education course.
- You must contribute $500 towards your down payment.
- Meet the income limits, which are outlined below.
- 1 Person – $44,250
- 2 Persons – $50,600
- 3 Persons – $56,900
- 4 Persons – $63,200
- 5 Persons – $68,300
- 6 Persons – $73,350
To learn more about this program visit the official website for Rock Hill.
South Carolina First Time Home Buyer Tax Credits
The state of South Carolina allows for certain tax credits for first time home buyers (or anyone who has not owned a home in the last 3 years). The SC Mortgage Credit Certificate program allows you to deduct money from your annual federal taxes. This credit will save you money on your annual taxes, and also assist in qualifying for a home loan by improving your debt-to-income ratios.
How this works is the South Carolina State Housing Financing Development Authority provides a Mortgage Credit Certificate (MCC) allowing you to deduct up to 50% of your annual mortgage interest. The maximum amount allowed to be deducted is $2,000.
The MCC tax credit is not to be mistaken with general tax deductions for interest paid on your mortgage. That is separate and allowed for any mortgage loan (and can also be used in addition to this special MCC program). This specific MCC tax credit is money that is directly taken off your tax liability. It is an actual dollar for dollar reduction in what you have to pay!
Are You Eligible for Down Payment Assistance?
A mortgage specialist can help you check your eligibility for down payment assistance. If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form. We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.
First Time Home Buyer Questions
Below are some of the most frequently asked questions about first time home buyer loans:
How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program. USDA and VA loans do not require any down payment. FHA loans only require a 3.5% down payment (and allow down payment assistance to be used). Conventional loans typically require either 3% or 5% down. The minimum down payment for a non-prime loan is usually at least 10% (or higher).
What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages. FHA loans have their own loan limits. This is not necessarily how much you can borrow though, but the maximum amount allowed in your location. The amount that you can personal qualify for will be based upon your income, and how much debt you have. For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges. The minimum credit score required for an FHA loan is 500. For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500. Non-prime loans also do not have any waiting periods after a bankruptcy.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
How do I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance. If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in South Carolina.