The average 30-year mortgage loan interest rate was 6.11 percent this past week according to Freddie Mac, but South Carolina’s housing agency was offering loans at 5 percent or less for certain homebuyers.
Launched in 2007, the Palmetto Heroes program from SC Homes is back with the lowest borrowing costs offered in years and up to $10,000 in forgivable downpayment assistance.
It’s available to educators, law enforcement and corrections officers, firefighters, emergency medical technicians, paramedics, military members and reservists, and licensed medical professionals — broad categories that range from game wardens to speech language pathologists.
And there are income limits, but they’re pretty high, from between $90,500 and $135,000 for a household of one or two — higher for larger households — depending on the county.
SC Housing says it’s the agency’s most popular homebuyer program, so time is of the essence for those looking for downpayment money and a great loan rate.
In 2025 the funding for Palmetto Heroes was exhausted in less than seven weeks. Last year’s program was similar to this year’s, but with slightly higher mortgage interest rates.
The mortgage rate is going to be a big attraction for this year’s program, with 5 percent conventional loans and 4.75 percent FHA/VA/USDA loans.
If someone were to borrow $300,000 for 30 years at 5 percent interest, their monthly mortgage payment would be $1,610 — $189 less each month than if the interest rate was 6 percent.
Lower rates allow borrowers to build equity faster, because most of the payments on a mortgage go toward interest in the early years. Home equity is the value of the home minus any loan balance.
After five years of payments, the 5 percent borrower would still owe $275,486 of the $300,000 they borrowed. Someone borrowing the same amount at 6 percent would still owe $279,163.
So, even with paying less each month, the 5 percent borrower would be paying off more of the loan.
The $10,000 in downpayment assistance also helps home buyers meet the challenge of saving up lots of money. That money is provided as a forgivable zero-interest loan, which is fully forgiven after 15 years of owning the home. Recipients must attend a first-time homebuyer training course.
The program is designed for first-time buyers, but in most South Carolina counties that only means that the borrower can’t own a home at the time their loan for a home purchase is processed. In a dozen counties, being a first-time buyer means not having had an ownership interest in a principal residence for three years prior to the loan closing date — in Aiken, Anderson, Charleston, Greenwood, Greenville, Lancaster, Lexington, Oconee, Pickens, Richland, Spartanburg and York.
Some version of Palmetto Heroes usually returns each year. When Palmetto Heroes isn’t available, there are other homebuyer assistance offers from SC Housing, and also from the Federal Home Loan Bank in Atlanta.
While Palmetto Heroes is a popular program, there are several others and some of them aren’t as well known. You may have read about them in previous columns about the County First Initiative, Palmetto Home Advantage, mortgage credit certificates, and Federal Home Loan Bank funds for purchases and home repairs.
Teachers, first-responders in SC can get 5 percent mortgages
