Comparing FHA, Conventional and USDA Loans Across South Carolina Markets — Palmetto Passage
Updated October 2026
A $325,000 home outside Columbia can qualify for different financing than a similarly priced Charleston condo. Property location, credit, household income and project eligibility determine whether FHA, conventional or USDA financing delivers the best combination of cash needed and monthly cost.
Compare the loan, not just the down payment
| Feature | FHA | Conventional | USDA guaranteed |
|---|---|---|---|
| Typical minimum down payment | 3.5% with qualifying credit | 3% for eligible programs | Zero for eligible borrowers |
| Mortgage insurance or guarantee fees | Upfront and annual premiums | Usually PMI below 20% down | Upfront and annual fees |
| Geographic restriction | No rural requirement | No rural requirement | Eligible rural address required |
| Income restriction | No general program income cap | Some affordable programs have caps | Household income limits apply |
FHA can suit borrowers whose credit makes conventional mortgage insurance expensive. Conventional financing may offer lower lifetime costs because borrower-paid PMI can eventually end. USDA preserves savings, but an eligible address alone does not establish borrower eligibility.
For 2026, the baseline conforming limit is $832,750 throughout South Carolina. FHA uses county-specific limits: the Charleston-North Charleston metro has limits above the $541,287 one-unit floor. Check FHFA Loan Limits and HUD FHA Mortgage Limits before choosing a price ceiling.
South Carolina costs can change the winner
A primary residence approved for the 4% legal-residence assessment ratio also receives exemption from school operating taxes. A property still assessed at 6% can carry a substantially higher bill, sometimes roughly 2.5 to 3.5 times the approved owner-occupied amount. The assessment ratio is not the tax rate.
Coastal buyers should obtain wind, hail and flood quotes before comparing payments. Coverage through SCWHUA may address wind and hail where available, but flood insurance is separate. Include required premiums in the monthly payment calculator, alongside mortgage insurance and HOA dues.
Match assistance to the financing
SC Housing offers the Homebuyer Program and Palmetto Home Advantage. Depending on the current offering, assistance may be structured as forgivable, zero-interest funding using percentage amounts such as 4% or 5%, or fixed-dollar awards. Palmetto Heroes targets designated occupations and service groups, including eligible teachers, first responders, veterans and nurses.
Compare assistance terms, first-mortgage pricing and repayment triggers together. South Carolina closings require attorney supervision; the deed recording fee is $1.85 per $500, typically paid by the seller. Use the closing cost estimator to separate closing expenses from the down payment.
Editorial Methodology & Primary Sources
Verification date: Not recorded; check the primary source and lender timestamp before relying on an estimate.
Rate comparisons use participating lender feeds, not a whole-market survey or guaranteed offers. Freddie Mac PMMS is a market benchmark, not a personalized quote. Calculator models rely on published regulatory formulas and disclosed assumptions rather than fabricated first-person loan testing.
Monthly principal and interest use the amortization formula P × r / (1 − (1 + r)−n), where r is the monthly note rate and n is the number of payments; at zero interest use P / n. PITI adds monthly property taxes and homeowners insurance; PMI is separate. APR includes applicable finance charges under Regulation Z and is not the note rate used for payments. Compare lender Loan Estimates for actual APR and fees.
- Consumer Financial Protection Bureau (CFPB) — Loan Estimates, APR and borrower disclosures; Regulation Z.
- U.S. Department of Housing and Urban Development (HUD / FHA) — FHA program guidance.
- U.S. Department of Veterans Affairs (VA) — VA loan eligibility and benefits.
- Freddie Mac Primary Mortgage Market Survey (PMMS) — published rate benchmarks.
- U.S. Census state tax collections — state property tax benchmarks; confirm parcel-specific assessments and exemptions with the state revenue department and local assessor.
- SC Housing — state housing finance and property tax authority.
- South Carolina Department of Revenue — state housing finance and property tax authority.
The payment snapshot uses illustrative annual taxes of 1% of home price, $1,200 insurance and 0.5% PMI below 20% down, not verified local quotes. Other calculators disclose their inputs and assumptions. Published guidance and lender feeds may change independently; confirm current program rules, taxes and offers before a decision.