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SC HOUSING REQUIREMENTS

General Loan Information

All South Carolina State Housing Finance and Development Authority loans are fixed rates with down payment assistance available for qualified borrowers. All loans are required to have an escrow account for the payment of insurance and taxes. All payments are due the first day of each month and considered late 15 days past the 1st.

Loan Types

  • Conventional, FHA or Guaranteed Rural Housing Loans

Mortgage Insurance Required

  • FHA loans must have FHA Mortgage Insurance
  • Conventional loans must be underwritten and insured by Arch, Essent, Genworth, MGIC, Radian or United Guaranty
  • USDA LNG required for Rural Housing loans

Minimum Credit Score

  • All loans delivered to SC Housing have minimum middle credit score requirements and must have acceptable AUS Findings. The minimum credit score does not automatically approve a borrower for a South Carolina State Housing Finance and Development Authority loan. This is the minimum requirement for SC Housing to review a loan application for a possible loan approval.

620 – FHA loans

640 – Conventional and USDA/RH

Qualification Ratios for Borrowers with no credit scores

  • If the borrower does not have traditional credit, meaning that they do not have enough credit to generate a credit score, alternative credit can be used. A borrower will need 4 credit items which should include rent, utilities and/or cell phone. These items must have a minimum of 12 months of history and have no late payments. The ratios below are minimum requirements; the “31” means the borrower’s total house payment cannot be more than 31% of the borrower’s total gross income. The “43” means the borrower’s total monthly payments such as credit card bills and loan payments and the borrower’s house payment cannot be more than 43% of the borrower’s total gross income. The 43% does not include utilities.
  • Manual underwriting only permitted on FHA insured loans.

Loan Term

  • 30 years

Down Payment

  • These funds can come from SC Housing’s down payment assistance, other housing agencies, non profit organizations, cash gifts or from your own savings. SC Housing does not allow down payment assistance to come from companies that require a donation to receive the funds. Gifts of equity are allowed when purchasing a home from a relative that has owned the home for five years or more.

Cash Back

  • Borrower(s) cannot receive cash back at closing but can receive any funds contributed to the deal, such as earnest money or upfront application fees.

Closing Costs

  • A lender can only charge a maximum of 1% origination fee. Prepaid items and usual and customary closing costs are allowed. The seller can pay up to 6% of the sales price for closing costs. The seller cannot pay any part of the borrower’s down payment.

Property Eligibility

  • Eligible properties are stick built single-family dwellings, townhouses, condominiums or new off-frame modular homes. All properties must be located in South Carolina.

Prepayment Penalty

  • None

Assumption

  • First mortgage loans are assumable by a qualified borrower.
  • Down payment assistance loans are not assumable.

Federal Recapture

  • Loans are subject to Federal Recapture. Effective with all loans closed on or after July 1, 2006, SC Housing will reimburse any borrower that is required to pay recapture to the IRS. (See manual for further information).

SC Housing Website

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