Program Opens South Carolina's Rural Housing Market to First (and Second) Time Buyers
Isn’t it interesting how differently the following two phrases sound:
- A little house in the country.
- Affordable rural housing.
They’re the same thing, really. But perceptions about life in the country depend almost entirely on whether someone with choices opts to buy a house there or someone without choices tries to buy in.
For low-income earners, which rural counties tend to have plenty of, the obstacles to buying a property abound. For one thing, rural markets are usually defined by lack of inventory.
Claude Spurlock, who oversees homeownership issues at the South Carolina Housing Finance and Development Authority, or SC Housing, says that rural properties often don’t change hands. Properties often belong to families and get passed down, meaning they don’t enter the real estate market.
It’s also common for rural property owners to rent out their old houses for retirement income when they downsize. This also keeps rural properties from entering the market, thus keeping rural inventories tight – especially at the more affordable end, where moderate-range earners could afford to buy.
The historical snag in rural inventory is that, well, it’s rural. There’s no development like in a city. That’s what makes it rural. So the only way to keep rural housing markets breathing is to have more affordable houses (defined here as a those properties that would be within reach of the typical wage earned in an area) become vacant.
That’s actually hard to make happen. Owners of lower-priced homes don’t always have the resources to level up to more expensive properties. But here’s the thing – they often would be able to afford the mortgage on a larger home if they could get their hands on a downpayment.
And first-time buyers could similarly afford a starter home mortgage but don’t always have the resources (or great credit) to land one.
So SC Housing has launched the County First initiative to meet that particular problem. County First provides up to $8,000 in forgivable downpayment assistance and low-fixed-rate financing to income-qualified first-time buyers and move-up buyers in 20 rural South Carolina counties. The program also allows for a less-than-stellar 620 credit rating to qualify.
Clamentine Elmore, executive director of the Housing Authority of Florence, says the attention on not-just-first-time buyers, but on established homeowners as well is a welcome approach.
“I think it’s great,” she says. “Some people don’t have to have the starter home. Some people can move up.”
Elmore says the initiative could be an effective check against homelessness – an increasingly looming problem for South Carolinians, given that the coronavirus pandemic has squashed or greatly reduced income for service workers in particular.
Eviction moratoria have kept a lot of people in their homes, but the cost of unpaid rents will eventually catch up to tenants faced with eviction and landlords who’ve lost substantial amounts of income.
“What can affordable housing do? It can stop homelessness,” Elmore says.
A big hurdle, though, is stigma. Elmore dislikes terms like “the projects” and “Section 8” because of the negative connotations they evoke. And she dislikes how easily people evoke them anyway, even though there is no real evidence to suggest that lower-income people, rural or not, just want a free house.
And adding to the long list of issues that tend to plague rural properties, there’s the state of disrepair so many rural homes are in. Samuel D. Bass, executive director of the Chesterfield-Marlboro Economic Opportunity Council, or CMEOC, says that between lack of investment and lack of resources by rural property owners, even those houses that do crack the market are frequently not livable.
The County First initiative does not provide for rehab funding, which Bass says would help get more properties open. SC Housing does, however, provide access to rehab funds through other programs.
Bass says he’s happy the County First initiative exists and that it certainly helps. But he does wish that SC Housing worked more closely on the financing front with agencies like his, which help develop loan packages. The issue is, the CMEOC is not a certified lender and SC Housing works with certified lenders.
James Hillian, who oversees the CMEOC’s weatherization programs, agrees that more programs need to address the condition of rural houses that fall into disrepair.
But he also agrees that County First is a good idea that’s more than a bit overdue.
“It’s a good start for those who need that start,” he says.