South Carolina Mortgage Relief: Help and Alternatives for Homeowners

Finding a South Carolina mortgage relief program is a critical step for homeowners facing financial hardship. Although major state-led initiatives like the SC Homeowner Rescue Program have ended, a strong network of support and alternative resources is still available for residents.

Understanding the current landscape of assistance provides a clear path forward. From free professional counseling to federal and local aid, options exist to help you navigate financial challenges. The top priority for any homeowner struggling with payments is to connect with these active resources to avoid foreclosure and secure their housing.

The Current State of Mortgage Relief in South Carolina: What Homeowners Must Know First

Navigating mortgage assistance requires understanding which programs are currently active and which have ended. In South Carolina, two major, widely known programs are now permanently closed after providing significant aid to residents. Being aware of their status is the first step in directing efforts toward currently available and effective solutions.

SC Homeowner Rescue Program (HAF) is Closed

The SC Homeowner Rescue Program (SC HRP) has officially closed after exhausting all its allocated funds. This program was part of the federal Homeowner Assistance Fund (HAF), created by the American Rescue Plan Act to help homeowners impacted by the COVID-19 pandemic.

Administered by the South Carolina State Housing Finance and Development Authority (SC Housing), the SC HRP provided over $119 million in aid to more than 14,500 households in the state.

What the Program Provided

The program offered vital support for those who experienced a pandemic-related financial hardship after January 21, 2020. Assistance included help with:

• Mortgage payments and reinstatement
• Delinquent property taxes
• Homeowner's insurance
• Utilities
• Down payment assistance loans

Applications officially stopped being accepted in April 2023 as the program began its wind-down process. Both SC Housing and the National Council of State Housing Agencies (NCSHA) confirm the program is permanently closed and will not reopen. Be cautious of any solicitations claiming to be from the SC Homeowner Rescue Program, as these are not endorsed by SC Housing and may be scams.

SC HELP Program is Also Permanently Closed

Before the HAF program, South Carolina had another assistance program called the SC Homeownership and Employment Lending Program (SC HELP). Launched in 2011, SC HELP aided families affected by the earlier economic downturn. The program was sponsored by the U.S. Department of the Treasury's Hardest Hit Fund and administered by SC Housing Corp., a non-profit division of SC Housing.

SC HELP offered several types of assistance to responsible homeowners facing circumstances beyond their control. These included:

• Monthly Payment Assistance: For unemployed homeowners seeking new employment.
• Direct Loan Assistance: To bring delinquent mortgages current for homeowners who had recovered from a hardship.
• Modification Assistance: A one-time payment to help homeowners qualify for a loan modification.

Like the SC Homeowner Rescue Program, SC HELP is now permanently closed and is not accepting new applications.

The Path Forward: Where to Turn for Help Now

The closure of these large-scale programs marks a significant shift in mortgage relief for the state. Homeowners no longer apply to a single state fund. The focus has moved to a service-oriented approach involving multiple agencies.

SC Housing and other official bodies now direct homeowners toward a different set of resources. The primary recommendation is to seek guidance from trained professionals who can offer personalized advice and advocacy. The most crucial next steps are to contact a HUD-approved housing counselor and explore legal services for foreclosure prevention.

Your First Call: Free, Expert Guidance from HUD-Approved Housing Counselors

When facing mortgage delinquency or foreclosure, your most effective first step is contacting a HUD-approved housing counseling agency. These non-profit organizations offer free, confidential, and unbiased assistance from trained professionals.

This service is not a loan or grant. It is expert advice tailored to your financial situation, designed to empower you with a clear plan of action.

The Role of a Housing Counselor

A housing counselor acts as a homeowner's advocate and guide. Their primary goal is to help individuals and families find the best possible solution to their housing challenges. They are equipped to provide a wide range of critical services, including:

• Financial Assessment and Budgeting: Counselors help homeowners create a realistic household budget to understand their income, expenses, and what they can truly afford for a monthly mortgage payment.
• Explaining Foreclosure Alternatives: They can explain complex options such as loan modifications, forbearance agreements, repayment plans, and other potential solutions offered by lenders.
• Lender Communication: Counselors can help homeowners prepare for conversations with their mortgage servicer and, in some cases, participate in those calls to help negotiate a workable solution.
• Application Assistance: If any local or federal assistance programs are available, a counselor can help determine eligibility and assist with preparing the necessary applications and documentation.
• Avoiding Scams: They are trained to recognize and help homeowners avoid predatory loan modification scams that target vulnerable individuals.

How to Connect with a Counselor

Finding a HUD-approved housing counselor is straightforward and accessible through several official channels. Homeowners can seek help from anywhere in the country or find an agency located directly in their community.

• Nationwide Hotline: The HOPE Hotline, available 24/7, connects homeowners with trained counselors from non-profit agencies across the country. The number to call is 888-995-HOPE (4673). 
• U.S. Department of Housing and Urban Development (HUD): HUD provides an online search tool to locate approved agencies by state or zip code. Homeowners can also call their toll-free number at 800-569-4287 for assistance.
• Consumer Financial Protection Bureau (CFPB): The CFPB also offers a reliable online tool for finding local housing counselors and can be reached at 855-411-CFPB (2372).

Directory of HUD-Approved Housing Counseling Agencies in South Carolina

For homeowners who prefer to work with a local organization, South Carolina has numerous HUD-approved agencies ready to provide free assistance. Contacting a local agency can provide a more direct connection to community-specific resources.

Federal Mortgage and Housing Programs for SC Homeowners

Even though statewide emergency funds have ended, several federal programs still offer assistance. Agencies like the U.S. Department of Agriculture (USDA) continue to help eligible homeowners.

It is crucial to understand the purpose of these programs. They are not direct mortgage bailouts but can provide significant financial relief for housing costs, especially in rural areas.

USDA Rural Development Programs

USDA Rural Development offers a suite of programs aimed at supporting homeowners in eligible rural and suburban areas. Eligibility for these programs is often determined by location, household income, and ability to obtain credit elsewhere. Homeowners can check both property and income eligibility using the official USDA Eligibility Site.

Section 504 Home Repair Loans & Grants: For Repairs, Not Mortgage Payments

The Single Family Housing Repair Loans & Grants program, commonly known as Section 504, is a vital resource for maintaining safe and sanitary housing. However, its purpose is frequently misunderstood by those seeking mortgage relief. The funds from this program are strictly designated for home repairs and cannot be used to pay a mortgage.

• What it Offers:
• Loans: Very-low-income homeowners can receive loans of up to $40,000 at a fixed 1% interest rate with a 20-year repayment term. These loans can be used to repair, improve, or modernize a home, or to remove health and safety hazards.  
• Grants: Elderly homeowners (age 62 or older) who are very-low-income and cannot repay a loan may be eligible for grants of up to $10,000. These grants must be used exclusively to remove health and safety hazards. In some cases, loans and grants can be combined for up to $50,000 in assistance.  
• Key Eligibility Requirements:
• The applicant must be the homeowner and occupy the house.
• Household income must not exceed the very-low-income limit for the county.
• The applicant must be unable to obtain affordable credit from other sources.  
• Important Clarification: How This Program Helps While Section 504 funds cannot pay your mortgage, they can ease financial pressure. By covering the cost of critical repairs, you can free up your own money to stay current on mortgage payments. This includes major expenses like a new roof, electrical system updates, or accessibility modifications.

Section 502 Direct Home Loan Program: For Purchasing, Not Refinancing an Existing Mortgage

The Section 502 Direct Loan Program helps low- and very-low-income households purchase a home in an eligible rural area. A key feature is its "payment assistance" subsidy, which can lower the mortgage payment by reducing the effective interest rate to as little as 1%.

This payment assistance is only for new loans originated through the USDA program. It is not a benefit that can be applied to an existing mortgage with another lender. This program helps families buy a home, but it cannot modify or provide relief for a pre-existing mortgage.

Disaster Assistance from FEMA and SCEMD

If your financial hardship is the direct result of a natural disaster, like a hurricane or flood, other assistance may be available. After a Major Disaster Declaration by the U.S. President, the Federal Emergency Management Agency (FEMA) can provide aid to eligible households.

This assistance is coordinated by the South Carolina Emergency Management Division (SCEMD). It can include:

• Temporary Housing: Funds for renting an apartment or motel.
• Housing Repair or Replacement: Grants for uninsured repairs to your primary residence.
• Other Needs Assistance: Funds for disaster-caused expenses like medical costs, personal property, and transportation.

FEMA funds cannot be used for mortgage payments. However, they can cover repair or temporary housing costs, freeing up your money to pay your mortgage. Apply at DisasterAssistance.gov or call FEMA at 800-621-3362.

State, County, and Non-Profit Resources for Foreclosure Prevention

Even though the main statewide mortgage relief programs are closed, help is still available. A network of state, county, and non-profit organizations provides crucial support to homeowners facing hardship.

These resources focus on foreclosure prevention through counseling, legal aid, and local financial programs. To find the right help, you need to know where to look in your community.

SC Housing's Continued Commitment to Homeowners

SC Housing is still a central hub of information for all South Carolina homeowners. While it no longer runs a direct mortgage relief fund, the agency remains committed to helping residents avoid foreclosure.

If you have an SC Housing mortgage, their website has resources and contact information for the loss mitigation department. For all other homeowners, SC Housing acts as a primary referral source. They will direct you to the network of HUD-approved housing counseling agencies across the state.

Free Legal Assistance for Foreclosure Cases

Facing foreclosure involves a legal process, and homeowners have rights that need to be protected. For low-income residents who cannot afford an attorney, several non-profit organizations in South Carolina may offer free legal services. These organizations can provide advice on foreclosure defense, negotiate with lenders, and ensure homeowners are treated fairly.

• South Carolina Legal Services: A non-profit law firm that provides free civil legal assistance to protect the rights and represent the interests of low-income South Carolinians.
• Appleseed Legal Justice Center: An advocacy organization that fights for systemic change and provides legal support on issues affecting low-income families, including housing stability.
• United Way 2-1-1: By calling 2-1-1 or texting "Rescue" to 211211, residents can be connected with legal service providers and other community resources in their area.

County and City-Specific Assistance Programs

Many South Carolina counties and cities run their own housing programs. These are often funded by federal grants like the Community Development Block Grant (CDBG) or the HOME Investment Partnership Program.

These programs vary by location and may not offer direct mortgage payment assistance. However, they are a critical part of the local support system for homeowners.

• Greenville County: The Greenville County Human Relations Commission offers foreclosure prevention counseling and workshops. The county also partners with the Greenville Housing Fund on a Mortgage Rescue Loan Program and a Homeowner Preservation Program for home repairs.
• Richland County: The Richland County Homeownership Assistance Program (RCHAP) provides up to $24,500 in down payment and closing cost assistance to eligible first-time homebuyers as a deferred, forgivable second mortgage.
• Charleston County: The Charleston County Community Development department has previously offered financial assistance for mortgage and utility payments. The Charleston Area Urban League, a HUD-approved agency, is a key local partner for foreclosure prevention support.
• Horry County: The county's Community Development office uses CDBG and HOME funds primarily for housing rehabilitation for low- to moderate-income homeowners to ensure homes are safe and sanitary.

Key Non-Profit Organizations Offering Support

Beyond government agencies, a network of non-profit organizations and Community Development Financial Institutions (CDFIs) plays a vital role in housing stability.

• Origin SC: This Charleston-based non-profit is a HUD-approved counseling agency that specializes in foreclosure prevention counseling, providing homeowners with expert guidance and individualized action plans.
• Community Works Carolina: As a statewide CDFI, Community Works provides financial wellness coaching that can be invaluable for families working to stabilize their finances and sustain homeownership.
• United Way of South Carolina: Through its local chapters, the United Way is a critical connector to resources. It partners with local agencies to host foreclosure prevention workshops and operates the 2-1-1 helpline.

Essential Actions: Communicating with Your Lender and Avoiding Scams

In addition to seeking outside help, every homeowner in financial distress must take two critical actions. First, communicate directly with your mortgage servicer. Second, learn how to identify and avoid foreclosure rescue scams.

These proactive steps can greatly improve your outcome and protect you from more financial harm.

Proactive Communication with Your Mortgage Servicer

Your mortgage servicer is the company that collects your monthly payments. Contact them as soon as you think you might have trouble paying, even before you miss a payment. Ignoring their calls and letters will only make the problem worse and limit your options.

When you call, ask for the "loss mitigation" or "home retention" department. They specialize in helping borrowers who are struggling to make payments. Be ready to explain your financial hardship and provide details about your income, expenses, and other debts.

Lenders may offer several options to help homeowners avoid foreclosure. The availability of these options depends on the type of loan, the investor who owns the loan, and the borrower's specific circumstances. Common solutions include:

• Forbearance: A temporary pause or reduction in mortgage payments. The missed amounts must be repaid later.
• Repayment Plan: Spreads the past-due amount over several months, adding it to the regular mortgage payment until the loan is current.
• Loan Modification: A permanent change to your loan terms, such as lowering the interest rate or extending the repayment term, to make the monthly payment more affordable.

Warning: Identifying and Avoiding Foreclosure Rescue Scams

Vulnerable homeowners are often targeted by criminals running foreclosure rescue scams. These fraudulent companies prey on fear and charge high fees for services that are either useless or available for free elsewhere. It is critical to recognize the warning signs of a scam.

Legitimate help is available from HUD-approved housing counseling agencies at no cost.

Red Flags of a Foreclosure Scam

Be extremely wary of any person or company that:

• Guarantees to Stop a Foreclosure: No one can guarantee this outcome. It is a fraudulent claim.
• Charges High Upfront Fees: It is illegal for companies to charge a fee before providing a service. Legitimate HUD-approved counselors provide their services for free.
• Asks for Payments to Be Made Directly to Them: Never send a mortgage payment to anyone other than your official mortgage servicer.
• Instructs You to Cut Off Contact with Your Lender: This is a major red flag. A legitimate helper will encourage open communication with your servicer.
• Pressures You to Sign Unclear Documents: Scammers may try to trick you into signing over the deed to your property. Never sign any document without fully understanding it.

If you suspect a scam, report it immediately. You can file reports with the South Carolina Department of Consumer Affairs, the Consumer Financial Protection Bureau (CFPB), and the Federal Trade Commission (FTC). Protecting yourself from these scams is just as important as finding real help.

Frequently Asked Questions