U.S. Department of Agriculture (USDA) Rural Development loans expand home ownership in rural areas in South Carolina. Loan eligibility depends on your income and where you plan to build. Check to see if you qualify. If you do, you can finance construction without making a down payment.
Approved lenders give Single-Family Housing Guaranteed Loans, while Single-Family Direct Loans come straight from the South Carolina Rural Development State Office. You’ll need building plans and costs to apply. USDA loans have more appeal than traditional construction loans, but income requirements restrict eligibility. Most of South Carolina is rural land, so it’s not hard to find USDA-loan-eligible land to build on.
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Can You Get a USDA Rural Development Loan to Build in South Carolina?
USDA loans help people build or buy homes in rural areas. While USDA loans are for buying or building homes in rural areas, sprawling suburban areas may qualify, so check your address against the USDA’s eligibility map.
You can only get a USDA loan for your primary residence. The house must meet the USDA’s energy efficiency standards and other requirements.
Single-Family Housing Guaranteed Loan
To qualify for a Single-Family Housing Guaranteed Loan, your household must fall within income limits for its county and size.
For example, a two-person household in Chester County with a max income of $112,450 qualifies for a USDA Single-Family Housing Guaranteed Loan. A six-person household in the same county would qualify with income up to $148,450.
Income limits adjust annually. If you didn’t qualify last year, you might now, especially with changes to your family’s size or income.
Single-Family Direct Loan
Single-Family Direct Loans have stricter eligibility requirements and are for applicants with low or very low income.
Applying for USDA Loans in South Carolina
Once you know your eligibility for a Single-Family Housing Guaranteed Loan, you can apply through a USDA-approved lender. You can find these throughout South Carolina. Take your time to vet lenders and pick one you feel comfortable with.
When applying, you have to tell the lender what you plan to do with the loan. That can include purchasing a piece of land in rural South Carolina or building on one. You’ll need detailed house plans and building costs for the application for a Columbia, SC Custom Home Builder.
You can get pre-qualified for a USDA loan before you’ve found a lot to build on. Once you know how much you’re approved for, you can decide how to divide that between lot purchasing and building costs.
Applications for Single-Family Direct Loans go to the South Carolina Rural Development State Office for approval.
Should You Get a USDA Loan or a Construction Loan in South Carolina?
USDA loans have much better terms than traditional construction loans. First, USDA loans don’t require down payments, while traditional construction loans require a sizeable down payment, around 20%. The USDA offers a 90% loan note guarantee for Single-Family Housing Guaranteed Loans through approved lenders.
Interest rates for USDA loans may be lower, too. Government-backed USDA loan interest rates range from one to three percent, whereas construction loans from private lenders have interest rates about triple that.
USDA loan terms are about 30 years, much like traditional mortgages. Standalone construction loans only last about a year. You can get a construction-to-permanent loan that becomes a traditional mortgage once construction is done if you don’t qualify for a USDA loan.
Financing your build with a USDA loan comes with its restrictions. You can’t use USDA loans to fund lavish custom homes, and you might face size limitations. You can use a USDA loan to finance a comfortable, safe home for your family, and we can make sure house plans match your vision.
Which Areas of South Carolina Are Eligible for USDA Rural Development Loans?
Much of South Carolina is considered “rural” by the USDA’s standards. Places that aren’t rural include big cities, like Columbia, Charleston, Greenville, Spartanburg, and coastal hot spots like Myrtle Beach.
Once you get out of the cities and past the suburbs, you hit USDA-loan-eligible areas. Wooded areas around the Sumter National Forest and Francis Marion National Forest qualify. You can nestle your cabin-inspired home into the pines here after confirming plans with us.
Lake Marion and Lake Moultrie are surrounded by USDA-loan-eligible land, too. Lakefront properties have clear appeal. You can incorporate the environment into the house plans, adding large custom windows to take advantage of your view.
Building near the Sand Hills State Forest may qualify you for a USDA loan as well. South Carolina is mostly rural, so as long as you’re not near any cities, the location may not be an issue.
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