03/16/2026
lets learn a thing or 2 about this "Palmetto Heroes Program"
Here is why getting that 10k now as assistance may not be a great idea for some buyers.
If you are a Veteran, and already getting a 0 down loan, closing costs could be covered by the seller instead of using that 10k from state housing. What happens in 2 years if you are stationed somewhere else, have to sell the home you just bought? You have to PAY that 10k when you sell, and if your house does not have enough equity in it after paying realtor fees, closing fees, and 10k back to the state housing, guess what - that comes out of your pocket.
USDA loan -same as above
It is only free money if you own the property for 15 years as your primary residence and keep the same loan.
This means on a FHA loan, you can not refinance into a conventional loan to get rid of mortgage insurance within 15 years because if you do - you are paying back that 10k just to get rid of mortgage insurance.
If you close conventional, you have to wait for the mortgage insurance to naturally drop off which will take approximately 12 years. If you refinance before then to try to get rid of mortgage insurance because of the natural rise in home prices giving you more equity, then guess what, you are paying back that 10k when you refinance.
If rates drop, you cannot refinance into a lower rate without paying the 10k back.
If you want a home over 450k, you cannot qualify.
If you make over 110,900 and are buying in Charleston County, you do not qualify.
If you make over $133,080 and want to buy in Dorchester or Berkeley, you do not qualify.
If you want to buy a manufactured home, you do not qualify.
If you want a rate buy down, you do not qualify. There is one rate with State Housing 4.75% FHA and 5.00 Conventional. (I just locked someone into an FHA loan at a 4.25% on a 5 year ARM because they only plan to live in the home 5 years or less and then sell).
Before you decide on state housing, consider, how long am I going to be in this home? If your realtor can negotiate 10k from the seller, and you have a VA or USDA loan already, take that as a win. You will never have to pay that back.
If you do not have money for your own down payment, consider gift money, retirement funds that may be able to be liquidated or saving up a bit longer to meet your minimum down payment. For most buyers, State Housing is a short term solution that later turns into a financial dilemna unless this is their "forever home" and they don't mind paying mortgage insurance for 15 years on USDA, Conventional, FHA.
This is how State Housing sucks you in - they are making that money back when the buyer sells, or refinances. Who these days usually owns the same home for 15 years?? Especially not first-time home buyers!
State Housing is also not for a quick close. They are underwritten by the lender, and they reviewed again by SC Housing. Minimal 40 days is usually the turn time on these programs.
Make sure your Realtor & Your Lender are explaining the Pros & Cons of this program!
-written by Arona Muckenfuss for Kemp & Co / RE/MAX Southern Shores
