South Carolina FHA Loan Limits

fha loans in south carolina mortgage informationEveryone wants a home, but nobody wants to deal with getting a mortgage. Securing a home loan is seen as a tedious and difficult process, one which more often than not can end with you getting turned down. But for many folks, there’s an easier way: FHA Loans in South Carolina.

These types of loans, which are insured by the Federal Housing Administration have lower requirements for applicants and a much smaller downpayment.

Maybe that’s why they account for 30 percent of all mortgages in South Carolina.

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Have you been considering a South Carolina FHA loan? If so, you’re in the right place. We’ve compiled a complete guide to FHA home loans in South Carolina, from the general requirements to how you can actually secure a loan for yourself.

What is an FHA Loan?

FHA loans are still issued by private moneylenders and banks, but they’re insured by the federal government. This means that the Federal Housing Administration, backed by the taxing power of the US treasury, promises to pay back the lender if you can’t make your payments.

Because they are guaranteed to make their money back, lenders have much lower requirements for FHA loans. Sometimes they will even issue mortgages to applicants who would be otherwise rejected outright, which is good news for low income families, first time home owners, or those who just want to avoid a big down payment.

What are the different types of FHA loans in South Carolina?

There are three different FHA loan categories which homeowners in South Carolina can apply for. Look through and make sure to choose the one that’s right for you!

types of fha loans in south carolinaIf you’re concerned about making your first few payments, you need the 5-year adjustable rate FHA loan in South Carolina. This type of loan starts at an interest rate that’s (usually) 1 percent lower than the fixed rate at remains at that low rate for 5 years before increasing, giving you time to settle into the home and start setting money aside for the larger payments.

If you want to make reliable, predictable payments and aren’t too concerned with how long it takes to pay the loan off, you want the fixed-rate FHA loan in South Carolina, the most popular type of FHA loan. This type of loan has an interest rate that’s guaranteed not to change for the duration of the payback period, which is usually 30 years. So your payments shouldn’t change at all, except for minor deviations in insurance or property taxes.

There’s also the Condominium Unit FHA loan in South Carolina, which as the name implies is obviously for those who are buying condos instead of a conventional home. Condominium units are good for those who don’t want to commit to paying off a home and are popular with low-to-moderate income families, so maybe this unconventional choice is right for you.

What advantages do homeowners have with an FHA loan in South Carolina?

Because FHA loans are insured by the federal government, they have much more lenient requirements for acceptance and require less money up front. More specifically, the advantages for getting an FHA mortage in South Carolina are:

advantages fha loan south carolina

  • A much smaller down payment. Conventional mortgages usually require a down payment of twenty percent of the home’s total value, but an FHA mortgage only requires a down payment of 3.5 percent for most families.
  • Easier credit requirements. Conventional mortgages usually look for credit scores above 700. FHA mortgage loans in South Carolina usually only look for scores of 620, and they allow two thirty-day late entries on your credit report. Some FHA lenders may require no credit at all, as we’ll discuss in a later section.
  • No minimum income requirements.
  • Easier debt-to-income ratio requirements. Usually lenders require that your payment be no more than 31% of your income, but FHA lenders will often approve applicants with debt-to-income ratios as high as 50%.

What are the disadvantages for an FHA loan?

FHA loans come with many attractive advantages, especially for low-to-moderate income families, but they have disadvantages as well, which is why it’s always best to pick the mortgage program that’s right for you.

  • The funding fee. If you think of the government as providing insurance for your FHA loan, then the FHA funding fee is the premium you pay to protect their investment. This fee is usually 1.7 percent of the total mortgage, so you’ll still be paying less up front than a conventional down payment.
  • Slightly higher interest rates. Interest rates for FHA loans are usually higher than interest rates for conventional home loans in the state of South Carolina, so that the banks can make their money back from the smaller payment upfront.
  • Un-cancelable private mortgage insurance. Normally home owners are allowed to cancel their PMI after they have accrued equity equal to 20 percent of the mortgage, which makes monthly payments cheaper over time. With an FHA mortgage, you can’t cancel your insurance until the home’s paid off in its entirety.

What type of properties qualify for an FHA home loan?

Chapter 3 of the Department of Housing and Urban Development’s Handbook 4150.2 describes in 21 pages the exact requirements appraisers use to determine if a property is eligible for an FHA home loan. If you don’t want to read the whole checklist, let’s hit the high points.

type of properties fha south carolinaA property must have:

  • Non-faulty HVAC systems
  • No holes or leaks in the roof
  • Hot water
  • High water pressure
  • No sink, tub, shower, or toilet leaks
  • Access to and space in the crawl space

…among other concerns relating to safety and quality of life. The appraisal process to make sure a home is eligible may take a while, but trust us – you don’t want to buy a house that isn’t safe and/or that doesn’t have these key features!

How important is credit when applying for an FHA loan in South Carolina?

Credit is a factor when applying for any home loan, but it’s less important for an FHA loan than it is for other types of mortgages. In South Carolina, most FHA underwriters usually only require a credit score of 620 instead of 700, and they will want to see three open trade lines on your credit report that have been there for a minimum of 12 months, although they will allow two thirty-day late entries on your credit report.

FHA also makes allowances for those with no credit history, allowing applicants to instead demonstrate “alternative forms of credit” like proof that you paid recent utility bills. However, lower credit scores usually mean a higher down payment – sometimes as high as 10 percent.

What are the requirements for an FHA loan in South Carolina?

requirements for fha loan south carolinaTypical requirements for an FHA loan in South Carolina in 2018 are as follows:

  • A minimum credit score of 620 or two forms of alternative credit.
  • A property that has been appraised and meets the requirements of HUD Handbook 4150.2
  • A property that is worth less than $566,425
  • A debt-to-income ratio of 50 percent or less

However, lenders can set their own requirements, and you might find some that are slightly lower than these (or which are slightly higher but come with an even lower down payment.) It’s always worthwhile to do some research and find a lender that can meet your needs.

How do you receive an FHA loan in South Carolina?

The Federal Housing Administration doesn’t originate these loans, but they can refer you to a list of lenders they work with in your area. As with any other type of loan, the lender will assign an underwriter to screen your credit, income, debt, and more. If you meet the requirements of the lender as well as the minimum state and federal requirements outlined in the last section, your application will be designated “Clear to Close” and you’ll be on your way to buying a home!

What are the FHA loan rates for South Carolina?

That depends! Lenders will offer different rates for FHA loans all across the state, which is why it’s important to “shop around” and research the rates of different lenders in your area.. In addition, loan rates are affected by economic indicators of the real estate market, which is in a constant state of flux, so they often change daily.

Do you have to be a first-time home buyer for an FHA loan in South Carolina?

This is a common misconception, but nope! FHA loans usually appeal more to first-time home buyers because of the reduced requirements for securing the mortgage, but anyone who meets the federal minimum requirements described above can apply for an FHA mortgage, regardless of how many homes they’ve owned before!

What is the maximum income limit for FHA loans?

There isn’t one! This is is another common misconception – just because FHA loans are usually preferred by low-to-moderate income families doesn’t mean that you have to fall below a maximum income to apply for one.

 

County Name One-Family Two-Family Three-Family Four-Family Median Sale Price MSA Name MSA Code
ABBEVILLE $271,050 $347,000 $419,425 $521,250 $92,000 GREENWOOD, SC 24940
AIKEN $271,050 $347,000 $419,425 $521,250 $185,000 AUGUSTA-RICHMOND , GA-SC 12260
ALLENDALE $271,050 $347,000 $419,425 $521,250 $23,000 NON-METRO 99999
ANDERSON $271,050 $347,000 $419,425 $521,250 $169,000 GREENVILLE-ANDERSON-MAULDIN, SC 24860
BAMBERG $271,050 $347,000 $419,425 $521,250 $34,000 NON-METRO 99999
BARNWELL $271,050 $347,000 $419,425 $521,250 $42,000 NON-METRO 99999
BEAUFORT $350,750 $449,000 $542,750 $674,500 $253,000 HILTON HEAD ISLAND-BLUFFTON-BEAUFORT, S 25940
BERKELEY $333,500 $426,950 $516,050 $641,350 $290,000 CHARLESTON-NORTH CHARLESTON, SC 16700
CALHOUN $271,050 $347,000 $419,425 $521,250 $162,000 COLUMBIA, SC 17900
CHARLESTON $333,500 $426,950 $516,050 $641,350 $290,000 CHARLESTON-NORTH CHARLESTON, SC 16700
CHEROKEE $271,050 $347,000 $419,425 $521,250 $60,000 GAFFNEY, SC 23500
CHESTER $280,600 $359,200 $434,200 $539,600 $244,000 CHARLOTTE-CONCORD-GASTONIA, NC-SC 16740
CHESTERFIELD $271,050 $347,000 $419,425 $521,250 $64,000 NON-METRO 99999
CLARENDON $271,050 $347,000 $419,425 $521,250 $94,000 NON-METRO 99999
COLLETON $271,050 $347,000 $419,425 $521,250 $95,000 NON-METRO 99999
DARLINGTON $271,050 $347,000 $419,425 $521,250 $125,000 FLORENCE, SC 22500
DILLON $271,050 $347,000 $419,425 $521,250 $18,000 NON-METRO 99999
DORCHESTER $333,500 $426,950 $516,050 $641,350 $290,000 CHARLESTON-NORTH CHARLESTON, SC 16700
EDGEFIELD $271,050 $347,000 $419,425 $521,250 $185,000 AUGUSTA-RICHMOND , GA-SC 12260
FAIRFIELD $271,050 $347,000 $419,425 $521,250 $162,000 COLUMBIA, SC 17900
FLORENCE $271,050 $347,000 $419,425 $521,250 $125,000 FLORENCE, SC 22500
GEORGETOWN $327,750 $419,550 $507,150 $630,300 $200,000 GEORGETOWN, SC 23860
GREENVILLE $271,050 $347,000 $419,425 $521,250 $169,000 GREENVILLE-ANDERSON-MAULDIN, SC 24860
GREENWOOD $271,050 $347,000 $419,425 $521,250 $92,000 GREENWOOD, SC 24940
HAMPTON $271,050 $347,000 $419,425 $521,250 $45,000 NON-METRO 99999
HORRY $271,050 $347,000 $419,425 $521,250 $172,000 MYRTLE BEACH-CONWAY-NORTH MYRTLE BEACH, 34820
JASPER $350,750 $449,000 $542,750 $674,500 $253,000 HILTON HEAD ISLAND-BLUFFTON-BEAUFORT, S 25940
KERSHAW $271,050 $347,000 $419,425 $521,250 $162,000 COLUMBIA, SC 17900
LANCASTER $280,600 $359,200 $434,200 $539,600 $244,000 CHARLOTTE-CONCORD-GASTONIA, NC-SC 16740
LAURENS $271,050 $347,000 $419,425 $521,250 $169,000 GREENVILLE-ANDERSON-MAULDIN, SC 24860
LEE $271,050 $347,000 $419,425 $521,250 $37,000 NON-METRO 99999
LEXINGTON $271,050 $347,000 $419,425 $521,250 $162,000 COLUMBIA, SC 17900
MARION $271,050 $347,000 $419,425 $521,250 $78,000 NON-METRO 99999
MARLBORO $271,050 $347,000 $419,425 $521,250 $59,000 BENNETTSVILLE, SC 13500
MCCORMICK $271,050 $347,000 $419,425 $521,250 $150,000 NON-METRO 99999
NEWBERRY $271,050 $347,000 $419,425 $521,250 $108,000 NEWBERRY, SC 35140
OCONEE $271,050 $347,000 $419,425 $521,250 $140,000 SENECA, SC 42860
ORANGEBURG $271,050 $347,000 $419,425 $521,250 $69,000 ORANGEBURG, SC 36700
PICKENS $271,050 $347,000 $419,425 $521,250 $169,000 GREENVILLE-ANDERSON-MAULDIN, SC 24860
RICHLAND $271,050 $347,000 $419,425 $521,250 $162,000 COLUMBIA, SC 17900
SALUDA $271,050 $347,000 $419,425 $521,250 $162,000 COLUMBIA, SC 17900
SPARTANBURG $271,050 $347,000 $419,425 $521,250 $125,000 SPARTANBURG, SC 43900
SUMTER $271,050 $347,000 $419,425 $521,250 $108,000 SUMTER, SC 44940
UNION $271,050 $347,000 $419,425 $521,250 $125,000 SPARTANBURG, SC 43900
WILLIAMSBURG $271,050 $347,000 $419,425 $521,250 $26,000 NON-METRO 99999
YORK $280,600 $359,200 $434,200 $539,600 $244,000

Additional Resources

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