In the past year a Berkeley County teacher, a Charleston County police officer and a Lexington County firefighter — all in their 20s — were among 64 state residents who got help buying a home through the Palmetto Heroes program.
That state-affiliated program is back for 2018, with $4 million more in funding than last year. Down payment assistance of up to $6,000 and a 4 percent interest rate on 30-year loans are the main features.
It can be an attractive choice for those with limited down payment resources. A FICO credit score of 620 or better is required.
Palmetto Heroes features low down payment loan options combined with down payment assistance — either a forgivable loan or a second mortgage. That eases the burden on buyers.
However, with low down payments buyers should consider they would have little equity in the home during the first several years of ownership.
Palmetto Heroes is similar to S.C. State Housing Finance & Development Authority's "home buyer program" but those in certain professions get a slightly better interest rate on loans through Palmetto Heroes.
- Law enforcement officers (full-time, state or local).
- Correctional Officers.
- Teachers (full-time classroom teachers with SC certification, or a contract to teach).
- Nurses and certified nursing assistants (state-licensed RN, LPN, APRN, and full-time CNAs listed in SC Nurse Aid Registry).
- Firefighters, emergency medical technicians and paramedics (full-time or volunteer)
- Veterans (who served on active duty).
- S.C. National Guard (active members; Army or Air and S.C. State Guard).
These home buyer programs do have income limits, and price limits on homes being purchased, but the limits are generous and the majority of people would qualify. For example, in most South Carolina counties an eligible applicant could earn up to $69,960, and buy a home costing up to $225,000.
Down payment assistance of up to $6,000 is either repaid over 10 years at a very low interest rate, or it's forgiven over 10 years for recipients with lower incomes who meet home-price limits.
In a dozen counties, including Charleston, Lexington and Richland, you can only use Palmetto Heroes if you haven't had an ownership interest in a residence in the three years prior to closing on the loan. That restriction is waived for single parents, veterans, and some borrowers with disabilities.
In most counties, you count as a first-time buyer as long as you don't own a residence at the time of closing on a loan to purchase a home through one of these programs.
Both Palmetto Heroes and the state's standard home buyer program can be ways to buy a home without having to save a huge down payment. To learn more visit schousing.com. To apply, find a participating lending partner on the website.
Those who don't need assistance, or want to buy a home costing more than $225,000, should check out the surprisingly underutilized Mortgage Credit Certificate program, also at schousing.com. That can get you a federal tax credit worth up to $2,000 every year you own the home.
This year there's $14 million available for Palmetto Heroes loans, but it will likely all be claimed within several months, so don't delay if you're interested.