The state of South Carolina provides a program to help
residents of the state become homeowners. The information here is on
Georgetown, Horry, and Williamsburg counties. For details on other
Down payment assistance is available in
conjunction with State Housing's First Mortgage Program. The state works
through mortgage originators throughout the state to provide first
mortgages. There are a few qualifications:
- The price of the home must be no more than $225,000.
- The income for those living in the home must not be more than
$66,000 per year for one or two people or $77,000 for three or more
- The borrower(s) must not have an ownership interest in a
principal residence at the time of closing the loan.
- Eligible properties are stick-built single-family homes,
townhomes, condominiums, or off-frame modular homes (no steel
framing - double-wides do not qualify).
The down payment assistance will provide
up to $5,000 that can be applied to the down payment, closing costs, and
prepaid items (the borrower(s) may not receive cash back at closing
except for funds contributed to the transaction such as earnest money or
up-front fees). The assistance will be provided with a second mortgage
on the home. The interest rate will be 4%, but payments are deferred
until the third anniversary of the first payment on the first mortgage.
(This means that the second mortgage will not be counted in the
borrower's debt-to-income ratio.) No interest will be charged during the
three-year period. If the maximum $5,000 is taken, the payment will be
$92.08 per month for five years after the three-year period ends.
Here is even better news: for some, the
second mortgage is forgivable! The borrower must live in the home
for five years for the loan to be forgiven. The price of the home is limited to
$202,500. The income limits are lower and are based on the number of
people living in the home:
Those who are below the income limits in
this table are in what the state refers to as Category II. Those who are
above these limits but within the $66,000 or $77,000 limits mentioned
above are in Category I. The interest rate on the primary mortgage will
be determined by the Category. The rate is fixed after the loan is made,
but the rates do change from-time-to-time before that. See the state web
site for the current rates at
www.schousing.com. There is also a Category III with even lower
rates for those that are within somewhat lower income limits.