‘Palmetto Heroes’ is back

The S.C. State Housing Finance Authority program can help people like the Charleston County Rescue Squad volunteers and Charleston firefighters shown here, rescuing a woman with a medical condition from her flooded car on Ashley Avenue in 2013.

A South Carolina incentive program that offers homebuying assistance to cops, teachers, nurses, and people in certain other professions has returned for 2016, with up to $10,000 in downpayment assistance and low-interest mortgage loans.

The “Palmetto Heroes” program run by the S.C. State Housing Finance Authority has been through several iterations since its debut a decade ago, and nearly 1,200 people have benefitted, securing more than $132 million in home loans.

Palmetto Heroes is an enhanced version of SC Housing’s first-time homebuyer program, which I wrote about in this column April 17. The big differences between the two is that Palmetto Heroes offers a lower mortgage interest rate, 3 percent, and twice the amount of forgivable downpayment assistance for borrowers who meet income requirements ($10,000 instead of $5,000).

With both programs, you don’t really need to be a first-time buyer to qualify, and you don’t have to have a low income. What you can get is a low-interest 30-year mortgage, with downpayment assistance that’s either forgiven after 10 years, or treated as a 10-year, 2-percent-interest loan, depending on the borrower’s income.

The main advantage this initiative offers is help getting over the hurdle of coming up with a downpayment. With Palmetto Heroes a credit score of 640 or higher is good enough to secure a mortgage loan.

So, take a single teacher with no kids, living in Dorchester County or Berkeley County, who wants to buy a home. If they earn $37,000 or less, they could get $10,000 in downpayment assistance, a 30-year mortgage with a 3 percent interest rate, and the downpayment assistance would be forgiven after 10 years of home ownership.

If that teacher earns more than $37,000, they could get $5,000 in downpayment assistance, or $7,000 if the home is newly built, and would repay that assistance over 10 years.

There is a limit on how much you can earn and still qualify. The amount varies by county, but last year the maximum was more than $75,000 for one or two people — more than most families earn — in Dorchester or Berkeley counties. The limit was lower for Charleston County because it’s among a handful of “non-targeted” counties in the initiative.

There are also price caps on homes that can be purchased, which also vary by county but tend to be generous. In Dorchester and Berkeley, for example, a home costing up to $255,000 would qualify for these programs. In Charleston, $225,000.

With the current version of Palmetto Heroes, announced in late April, you have to be employed in one of these professions:

Law enforcement officers, full-time, with a state or local agency.

Correctional officers, employed by the state Department of Corrections.

Teachers with S.C. certification, employed as a classroom teacher, or with a contract to begin teaching and receive a paycheck within 60 days of closing on the home.

Nurses and certified nursing assistants with a nursing degree, employed in the profession.

Firefighters, full-time or volunteer, for a state or local agency.

Veterans who served full-time duty and were not dishonorably discharged.

Emergency medical services personnel, full-time or volunteer, for a state or local agency.

Active members of the S.C. National Guard, including the S.C. State Guard.

This is a solid helping hand for people who could afford the payments on a home — which could be less than the cost of renting — but need help with a downpayment. The 3 percent interest rate is also very attractive, and the relatively low credit score requirement opens to the door to more people.

Those who have good credit, and don’t need downpayment assistance, should alternatively consider the “mortgage credit certificate” incentive. It’s also available through SC Housing. A mortgage credit certificate allows you to claim a federal tax credit worth up to $2,000 every year you own a home, but you must obtain the certificate before buying.