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What Home Max Does and How It Works in South Carolina

By Constance Obi · Culture & Recreation Writer

Home Max is a mortgage program that helps South Carolina homebuyers with down payments and closing costs

Home Max is a state-backed mortgage program run by the South Carolina Housing Finance and Development Authority (SCHHFDA). It combines a conventional or FHA loan with a second mortgage that covers part of your down payment and closing costs, so you do not have to save as much money upfront to buy a home.

The program works by pairing you with a lender who offers the first mortgage at a competitive rate. SCHHFDA then provides a second mortgage—called a silent second—that you do not have to repay as long as you stay in the home for a set period. If you sell or refinance before that time is up, the second mortgage becomes due.

Home Max is designed for first-time homebuyers and repeat buyers with moderate incomes who meet the program's income and credit requirements. It is not a grant or a gift; it is a loan structure that reduces your out-of-pocket costs at closing.

Key Takeaways

  • Home Max combines a first mortgage with a second mortgage that covers down payment and closing costs, reducing what you pay upfront.
  • The second mortgage is silent, meaning you make no monthly payments on it as long as you remain in the home for the required period.
  • The program has income limits and credit score minimums that vary by county and family size in South Carolina.
  • You must work with a lender approved by SCHHFDA to use Home Max, and not all lenders participate.
  • If you sell or refinance before the silent second matures, you must repay that portion of the loan.

Income and credit requirements for Home Max

Home Max has income limits that depend on your county and household size. South Carolina divides counties into tiers based on median income, so the ceiling for a family of four in Charleston County differs from the ceiling in a rural county. You can find your county's current limits on the SCHHFDA website or by calling their loan officer line.

Most lenders require a credit score of at least 620 to 640, though some approved lenders may work with scores as low as 580 if other factors in your application are strong. You will also need to show stable employment history, typically two years with the same employer or in the same field, and a debt-to-income ratio that does not exceed 43 to 50 percent depending on the lender.

First-time homebuyer status is not required—repeat buyers can use Home Max—but you cannot have owned a home in the past three years. SCHHFDA defines first-time homebuyer broadly to include single parents, divorced individuals, and people who owned a home but have been without ownership for at least three years.

How the silent second mortgage works

The silent second is the core feature of Home Max. Instead of saving 10 or 20 percent for a down payment, you might put down 3 to 5 percent on the first mortgage. SCHHFDA then funds a second mortgage for the remaining down payment amount and your closing costs—typically 2 to 5 percent of the purchase price.

You do not make monthly payments on the silent second as long as you live in the home as your primary residence. The loan sits in the background; your monthly payment covers only the first mortgage. If you sell the home or refinance the first mortgage before the silent second matures—usually after 5 to 10 years depending on the program year—you must repay the full balance of the second mortgage from your sale proceeds or refinance funds.

Because the second mortgage is forgiven if you stay in the home long enough, it functions as a down payment subsidy. The trade-off is that you carry two mortgages on your credit report, and your total debt load is higher, which affects your borrowing power for other loans during the silent period.

Finding an approved Home Max lender

Not every mortgage lender in South Carolina is approved to offer Home Max. You must work with a lender on SCHHFDA's approved list to use the program. The SCHHFDA website maintains a current directory of participating lenders, organized by region.

When you contact a lender, tell them you are interested in Home Max specifically. Some lenders promote it heavily; others offer it but do not advertise it. A lender can tell you in one conversation whether you meet the basic income and credit requirements and what your estimated down payment and closing costs would be under the program.

You can also contact SCHHFDA directly at their main office in Columbia or through their website to ask for lender referrals in your area. They can tell you which lenders are actively taking Home Max applications and which ones have the fastest turnaround.

Down payment and closing cost amounts

The amount SCHHFDA will cover through the silent second depends on the purchase price of the home and the specific Home Max product you use. Generally, the program covers enough to bring your down payment down to 3 to 5 percent of the purchase price, plus closing costs that typically run 2 to 5 percent of the loan amount.

On a $200,000 home purchase, for example, you might put down $6,000 to $10,000 yourself (3 to 5 percent), and the silent second would cover the remaining down payment plus closing costs—potentially $8,000 to $15,000 or more depending on the lender's fees and your loan structure.

Your lender will provide a detailed breakdown before you commit. The Loan Estimate you receive within three business days of application will show the first mortgage amount, the silent second amount, your out-of-pocket down payment, and all closing costs. Review this carefully to understand your total debt and monthly payment.

What happens if you sell or refinance

The silent second becomes due in full if you sell the home or refinance the first mortgage before it matures. Most Home Max silent seconds mature after 5 to 10 years; check your loan documents for your specific maturity date.

If you sell, the proceeds from the sale go first to pay off the first mortgage, then to pay off the silent second, and any remainder goes to you. If the home sells for less than you owe on both mortgages combined, you may owe money out of pocket—a situation called being underwater.

If you refinance the first mortgage before the silent second matures, you must pay off the silent second at that time. Some borrowers refinance to a lower rate on the first mortgage but find they cannot afford to pay off the second, so they stay locked into the original loan. Discuss this scenario with your lender before you close.

Comparing Home Max to other down payment programs

South Carolina offers other down payment assistance programs, including conventional loans with lower down payments (3 percent down) and FHA loans (3.5 percent down). Home Max is strongest when you want to minimize your upfront cash and you plan to stay in the home for at least 5 to 10 years.

Conventional loans with 3 percent down require mortgage insurance (PMI) until you reach 20 percent equity, which adds to your monthly payment. FHA loans also require mortgage insurance for the life of the loan if you put down less than 10 percent. Home Max avoids mortgage insurance but saddles you with a second mortgage that you cannot pay down early without refinancing.

If you have a larger down payment saved (10 to 20 percent), a conventional loan may cost less over time. If you plan to move or refinance within five years, the silent second maturity date becomes a hard deadline. Talk through these scenarios with your lender to see which structure fits your situation.

Frequently Asked Questions

Can I pay off the silent second early without refinancing?

Most Home Max silent seconds do not allow early payoff. You can only eliminate the second mortgage by refinancing the first mortgage or selling the home. Check your loan documents or ask your lender about prepayment options before you close.

What if my income changes after I close?

Income changes after closing do not affect your Home Max loan. The program only checks income at the time of application. If you lose your job or take a pay cut, your mortgage payment remains the same, but you may struggle to pay it—that is a personal cash flow issue, not a program issue.

Does Home Max work with FHA loans or only conventional loans?

Home Max works with both FHA and conventional first mortgages. FHA loans allow lower credit scores and down payments, which makes Home Max more accessible to some buyers. Ask your lender which option has the lower total cost when you compare the first mortgage rate, PMI (if any), and the silent second terms.

Can I use Home Max if I am buying a manufactured home or a condo?

Home Max typically works with single-family detached homes and some townhomes. Manufactured homes and condos have stricter rules depending on the lender and the property type. Ask your lender whether your specific property type qualifies before you spend time on the application.

How long does it take to close on a Home Max loan?

Home Max loans close on the same timeline as conventional mortgages—typically 30 to 45 days from application to closing. SCHHFDA does not slow down the process, but your lender's workload and the complexity of your application can affect speed. Ask your lender for an estimated closing date when you apply.