First-Time Homebuyer Programs in South Carolina

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The down payment on a new home is often the biggest hurdle for first-time homebuyers. In South Carolina, with an average home value of $296,987, you would need approximately $59,397 to avoid buying private mortgage insurance.

Fortunately, first-time homebuyer programs in South Carolina are available to help you achieve homeownership. Some mortgages even allow first-time homebuyers to put less down on a home, but these usually have income requirements and require mortgage insurance. MoneyGeek found several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

South Carolina First-Time Homebuyer Programs

South Carolina has grants and loans to assist first-time homebuyers in covering down payment and closing costs. Below, we compiled the first-time homebuyer programs offered by the South Carolina State Housing Finance and Development Authority to help you find the best option for your particular needs and situation.

Homebuyer Program

The Homebuyer Program by SC Housing provides affordable mortgage options and additional financial assistance to help low- and moderate-income individuals purchase homes in South Carolina.

  • FHA Loans: Require a 3.5% down payment with a maximum LTV of 96.5%, available for borrowers with a minimum credit score of 620.
  • Conventional Loans: Require a 3% down payment with a maximum LTV of 97% and a minimum credit score of 640. These loans also offer reduced mortgage insurance requirements.
  • USDA Loans: Provide 100% financing with no down payment required and are available to eligible borrowers with a minimum credit score of 640.
  • VA Loans: Also offer 100% financing with no down payment required, designed specifically for veterans and active-duty service members, with a minimum credit score of 640.
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ELIGIBILITY REQUIREMENTS

To qualify for the name under the Homebuyer Program, you must meet eligibility requirements:

  • Be a first-time homebuyer in non-targeted counties or not currently own a home in targeted counties
  • Purchase property as a primary residence in South Carolina
  • Meet minimum credit score requirements
  • Complete a SC Housing-approved homebuyer education course if using down payment assistance
  • Property must be an eligible site-built home, off-frame modular home, patio/townhome or FHA-approved condo
  • Adhere to SC Housing’s income and property sales price limits
  • Cover typical costs, including 1% origination fee and other customary closing expenses

Forgivable Down Payment Assistance

The Forgivable Down Payment Assistance (DPA) program by SC Housing offers qualified borrowers a forgivable second mortgage loan to help cover down payment, closing costs or other prepaid expenses. Available for both new and existing homes, this assistance has a 15-year term at 0% interest with no monthly payments.

Full forgiveness of the loan is granted if the borrower maintains the home as their primary residence for the entire 15-year period; otherwise, repayment may be required upon selling or transferring the property.

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ELIGIBILITY REQUIREMENTS

To qualify for the Forgivable Down Payment Assistance program in South Carolina, you must meet specific eligibility requirements:

  • Must meet income and property sales price limits set by SC Housing
  • Must use the property as a primary residence for at least 15 years to qualify for loan forgiveness
  • Completion of a SC Housing-approved homebuyer training course is required
  • Property must be located in South Carolina and meet SC Housing’s eligibility criteria, including site-built homes, off-frame modular homes, patio/townhomes and FHA-approved condos
  • Must be used in conjunction with an SC Housing first mortgage

South Carolina First-Time Homebuyer Programs by City

Aside from statewide first-time homebuyer programs in South Carolina, there are also city-specific programs available to help you pursue homeownership in a city of your choosing. Check out the table below for some of the cities in South Carolina that provide first-time homebuyer programs for potential residents.

City
First-Time Homebuyer Program

Columbia

Columbia has two City Lender Programs for income-eligible homebuyers purchasing a home in the city. City Lender I – Uplift offers loans up to $205,000, with a $500 down payment requirement and 4% interest rate. Meanwhile, City Lender II provides loans up to $318,000, with a $2,000 down payment requirement and 4% interest rate.

Qualifications include having a minimum credit score of 600 and getting pre-approved by a participating lender.

Rock Hill

Rock Hill's First-Time Homebuyer Program provides down payment and closing cost assistance of up to $5,000 to eligible first-time homebuyers. This assistance comes in the form of a second mortgage that is forgiven in increments annually over a 5 to 20-year period, depending on the program.

Qualifications include having a total household income at or below 80% of the area median income (AMI).

Zero-Down-Payment Loan Programs in South Carolina

Zero-down-payment loan programs in South Carolina allow you to purchase a home without putting money down. USDA and VA loans are two government-backed options that come with no down payment.

USDA Loans

USDA loans are designed to assist low- to moderate-income homebuyers in rural areas. They are issued by the U.S. Department of Agriculture through its Rural Development Guaranteed Housing Loan program.

USDA loans offer several benefits, including low interest rates and zero down payments. They are intended to make homeownership more accessible for those who might not qualify for conventional financing. The program also provides flexible credit guidelines to help more families achieve homeownership.

To be eligible for a USDA loan, your property must be 2,000 square feet or below and located in a USDA-eligible rural area with less than 35,000 people. You also must meet certain income limits, which vary depending on where you live. For example, in Coleton County, South Carolina, the income limit for a four-person household is $49,850. In contrast, Oconee County, South Carolina, has an income limit of $59,300 for the same household size.

VA Loans

VA loans are a type of mortgage option issued by the U.S. Department of Veterans Affairs and are designed to help veterans, active-duty service members and eligible surviving spouses become homeowners.

VA loans offer several advantages, including the absence of a down payment requirement. They also do not require private mortgage insurance (PMI), which can save borrowers a significant amount of money over the life of the loan. Additionally, VA loans come with lower interest rates compared to private loans. As of November 2024, the APR for a 15-year fixed-rate VA loan is 6.42%, while a 30-year fixed-rate VA loan is at 6.41%.

To be eligible for a VA loan, you must meet specific requirements related to your length of service or service commitment, duty status and character of service. You must also meet certain income limits depending on where you live and provide a valid certificate of eligibility (COE).

Low-Down-Payment Loan Programs in South Carolina

First-time homebuyers in South Carolina can take advantage of low-down-payment loan programs that allow them to finance their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

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    Conventional Loans

    Conventional loans are mortgage loans not insured by the government. There are two main types: conforming (which follows Freddie Mac or Fannie Mae guidelines) and nonconforming (which goes beyond the conforming limits).

    Depending on the lender, you can get a mortgage with a 3% down payment. However, putting down less than 20% means you'll have to pay for private mortgage insurance. Eligibility requirements include a minimum credit score of 620 and a debt-to-income ratio of 43% or lower.

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    FHA Loans

    FHA loans adhere to Federal Housing Administration policies and procedures. For 2024, the mortgage limit for single-family properties in South Carolina is $766,550. For two-family properties, it's $981,500. Eligibility requirements include a minimum credit score of 500 and a 3.5% down payment. Note that private mortgage insurance is required if you put down less than 20%.

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    FHA 203(k)

    FHA 203(k) loans allow you to roll the cost of renovations into the mortgage. There are two main types: Standard and Limited. You can obtain this mortgage with a 3.5% down payment. Eligibility requirements include a credit score between 500 and 580 and a front-end debt-to-income ratio of 31% or less. This loan is not limited to first-time homebuyers. Note that you can't have two FHA loans simultaneously.

FHA vs. Conventional Loan: Which Is Right for You?

FHA loans and conventional loans are the two most common types of mortgages. FHA loans require a minimum down payment of 3.5%, making them accessible for buyers with limited savings. Conventional loans can require as low as a 3% down payment for first-time homebuyers but generally have stricter credit score and debt-to-income ratio requirements than FHA loans.

Interest rates are another important factor to consider. As of November 2024, the current APR for a 15-year fixed-rate conforming loan is 6.03%. In comparison, the APR for a 15-year fixed-rate FHA loan is 6.43%. APRs on FHA loans can be higher because there tend to be more fees and extra costs associated with borrowing money on government-backed loans.

Use our FHA vs. conventional loan calculator to help you compare FHA and conventional mortgage programs and find the best option for you.

FHA vs. Conventional Loan Calculator

Compare FHA and conventional mortgage programs to better understand your loan opportunities in South Carolina.

Basic Details

Some basic details about the property and loan
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Interest Rate

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Calculation Results
Financial AnalysisFHAConventionalDifference
Monthly Payment (First Year)FHA$0Conventional$0Difference$0
Upfront Costs FHA$0Conventional$0Difference$0
Total 30-Year CostFHA$0Conventional$0Difference$0
Total 5-Year CostFHA$0Conventional$0Difference$0
Monthly Mortgage Insurance (First Year)FHA$0Conventional$0Difference$0
Down PaymentFHA$0Conventional$0Difference$0
Calculator results are rounded to the nearest whole dollar.
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RECOMMENDED CREDIT SCORES FOR FIRST-TIME HOMEBUYERS

Qualifying for first-time homebuyer programs often involves meeting minimum credit score requirements, which can vary depending on the loan program. Conventional loans typically require a credit score of 620, while government-backed loans like FHA loans may only need a minimum credit score of 500.

According to Experian, the average credit score in South Carolina is 699, suggesting that many residents may be well-positioned to qualify for various first-time homebuyer programs.

FAQ: First-Time Homebuyer Programs in South Carolina

We answered some frequently asked questions about first-time homebuyer programs in South Carolina to help you get closer to homeownership.

Does South Carolina have first-time homebuyer programs?

What qualifies me as a first-time homebuyer in South Carolina?

Can you buy a house in South Carolina with no down payment?

Who can help me with my down payment on a house in South Carolina?

Additional Resources for First-Time Homebuyers in South Carolina

Explore additional MoneyGeek resources for first-time homebuyers in South Carolina to help you with the homebuying process.

About Zachary Romeo, CBCA


Zachary Romeo, CBCA headshot

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.


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