Is South Carolina Down Payment Assistance Forgivable? (2026)
Partly. The SC Housing Homebuyer Program's down payment assistance is forgivable, and Palmetto Home Advantage works a little differently. Here is the straight answer on what you repay and what you do not.
What makes the assistance repayable
South Carolina calls this assistance forgivable, and it is — over a ten-year term. But SC Housing is blunt in its own program guide that forgivable is not the same as free:
Down Payment Assistance is available with a 0%, 3% or 4% of the total first mortgage loan amount … through a forgivable second mortgage with a 10-year term and zero percent-no payment interest rate. This is not a grant. … DPA must be paid in full upon sale, refinance, or if property is no longer the borrower's primary residence prior to maturity. Subordination of the DPA is not permitted.
PA-020 Palmetto Home Advantage Program Guide, effective 08.11.2026.
The three triggers
| Event | Before year 10 |
|---|---|
| You sell the home | Paid in full |
| You refinance the first mortgage | Paid in full |
| The home stops being your primary residence | Paid in full |
PA-020 gives no partial credit
PA-020 treats the full amount as due on a trigger before maturity and gives no pro-rata reduction. On that wording, staying eight years does not earn a partial write-off. We have read the program guide, not the note you would sign, so confirm the exact schedule on your own documents before you rely on it. That differs from Missouri, where nothing is forgiven for five years and the balance then clears at 1/60 a month.
The one most likely to catch you
Refinancing. “Subordination of the DPA is not permitted” means the second cannot stay in place behind a new first mortgage, so any refinance repays it in full. A borrower who did everything right and simply refinanced for a better rate in year four repays the whole amount at that closing.
None of this makes the assistance a bad deal. It makes it a decision with a known cost attached, and one worth taking with the schedule in front of you rather than discovering at a settlement table. Ask us to run it against your actual plans.
The straight answer
South Carolina’s main program offers forgivable help. Through the SC Housing Homebuyer Program, the down payment assistance is a second mortgage you do not repay it only if you keep the home as your primary residence, do not sell and do not refinance for the full term — PA-020 makes the balance payable in full on any of those in the home, it forgives over time. That is different from states where the down payment second is always a loan you pay back. For a first-time buyer whose barrier is cash, forgivable assistance is the most valuable kind, because you likely never repay it. Palmetto Home Advantage, the more flexible program, provides percentage-based assistance with its own terms.
Confirm the current amounts
Here is the honest caveat. SC Housing sets the exact down payment assistance amounts, the forgiveness schedule, and the income and price limits, and they change periodically. So rather than quote a figure that may be out of date, we confirm the current numbers directly with SC Housing before you plan around them. What does not change is the structure: the Homebuyer Program is forgivable, Palmetto Home Advantage is the flexible option, and first-generation buyers can add extra help.
The first-generation layer
One more piece worth knowing. On top of the forgivable Homebuyer Program, South Carolina runs a First-Generation Homebuyer Program, extra down payment help for buyers whose parents did not own a home. For a first-generation buyer, that can stack with the forgivable assistance to make ownership genuinely reachable. If you would be the first in your family to own, it is worth checking, see our First-Generation page.
Common questions
Is South Carolina down payment assistance forgivable?
The SC Housing Homebuyer Program's down payment assistance is forgivable, a second mortgage you do not repay it only if you keep the home as your primary residence, do not sell and do not refinance for the full term — PA-020 makes the balance payable in full on any of those in the home, forgiven across the program's term — 15 years on the Homebuyer Program and 10 on Palmetto Home Advantage per SC Housing's 2026/2027 limits sheet. Palmetto Home Advantage provides percentage-based assistance with its own terms. Confirm the current amounts and rules at SC Housing.
Do you repay SC Housing down payment assistance?
The SC Housing Homebuyer Program's assistance is forgivable, so you do not repay it if you stay in the home. Palmetto Home Advantage terms vary. Confirm the current forgiveness rules with SC Housing before you plan.
What is the SC First-Generation Homebuyer Program?
It provides extra down payment help to first-generation homebuyers, buyers whose parents did not own a home, on top of the standard SC Housing assistance. Confirm the current amount and eligibility with SC Housing.
Ready to see your options?
Tell us your county, credit range, and price target, and we’ll map your South Carolina path in a no-pressure 20-minute call. No obligation.