First-Time Homebuyer Programs in South Carolina

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 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.

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.

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.

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.

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 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 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).

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.

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.

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

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