South Carolina’s housing agency wants to help build 30 new homes around the state, offering them to buyers for $175,000 or less. (File photo by Dan Reynolds Photography via Getty Images)
COLUMBIA — The state’s housing agency wants to help build 30 new homes around South Carolina that sell for far less than most.
In an effort to increase the number of affordable homes on the market, the state Housing Finance and Development Authority is seeking builders to participate in a pilot program to construct homes that can be sold for $175,000 or less.
While that might sound like a lot of money for some, SC Housing Executive Director Richard Hutto said, finding a home for less than $200,000 in the Palmetto State is difficult to do.
The median listing price of a home in South Carolina is $350,000, according to data from the U.S. Federal Reserve Bank.
But the cost can be much higher depending on the region. The most expensive county to buy a home is Beaufort, where the median price in January for homes sold was $432,000, according to the latest report from the state Association of Realtors.
The state needs three builders willing to build 10 homes each. The homes must be at least 1,000 square feet. There are no restrictions or specific goals on their location.
To help with the cost, the state is offering builders $10,000 for each home built.
“We have to find solutions to the current lack of workforce housing for those who are ready to become homeowners,” Hutto said.
“It’s a complex problem and will require the efforts of not only builders and lenders, but of legislators, local governments and city planners as well,” he continued. “SC Housing is bringing its financial resources to the table to show that this type of housing program is possible and needed throughout the state.”
To be eligible to buy the home, a family must have an annual income of $127,200 or less.
The state also will require buyers to take out a 30-year mortgage from one of the state housing authority’s participating lenders.
“There is no better way to build wealth and to pass on wealth to future generations than to have affordable housing,” Sen. Darrell Jackson, D-Hopkins, said when he first heard about the state housing authority’s efforts.
The head of the Home Builders Association of South Carolina, Mark Nix, said he’s glad to see the state trying something new to make homes more affordable.
But he also warns it likely won’t be easy.
Land is expensive, and many cities and counties in the state have enacted strict requirements on how small they’ll allow lots to be for new home construction, Nix said.
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Building a smaller home on a half-acre lot isn’t cost effective, so builders will likely need variances from cities, he said.
“The biggest part is the land and the zoning to go along with it,” Nix said.
Interested homebuilders have until April 23 to submit an application.
Nix suspects charitable organizations such as Habitat for Humanity or builders that already specialize in low-income housing will be the most likely to apply.
The state housing authority also will aid homebuyers, offering up to $25,000 in down payment assistance for those that fall below income limits. The agency will forgive the loan for that assistance if the buyer remains in the home for five years.
The agency is funding the pilot program with reserves it has on hand. If it’s successful, the housing authority will seek more funding from the Legislature to expand it.