The SCCFHDA is the state agency responsible for providing financing for the state’s housing development. The agency is responsible for selling the home to the purchaser, and it acts as an intermediary between the seller and the buyer to ensure the transaction is a success.
The SCCFHDA can’t fund the projects they approve because it’s not a state agency, so most of the money goes to developers who either build their own housing or rent it out as condos. The agency has a lot of control over the home loan and home purchase process, and it can make some pretty drastic decisions.
When buying a home in the south, the SCCFHDA basically has to agree to a specific set of terms, but they also have the power to veto any and all deals that the seller and buyer agree to. The agency can also decide to approve or deny the deal right away – like for instance they can demand to see the seller’s credit report. It also has the power to demand a down payment and can force a seller to buy a home without financing.
The agency deals with a lot of different issues and this is a good example of how it can go wrong. The agency was the first to adopt the “first-mortgage-to-market” (FTM) mortgage system, which basically required the home buyers to make half of the down payment up front for a FTM mortgage, and the other half when it was time to sell the home.
This is a bad setup because half the down payment can’t be used on a mortgage. It also doesn’t require the seller to sell the home without financing, which requires a loan for the seller to sell the home. So what happens when the buyer can’t sell the home without financing? He would have to pay the difference in the price paid for the home versus the home’s market value. That will put the home’s sales price above the seller’s loan.
This also means that the seller cant sell the home without financing. The way this is handled in most states is that the seller decides to finance the home and the buyer pays for it out of pocket. So if the home sells for less than the loan amount, the seller has to pay the difference in the price paid for the home versus the homes market value. That will put the homes sales price above the sellers loan.
A seller will never pay more than the amount financed for a home. To get the full amount financed, the seller must pay the difference in the price between the home sale price and the homes market value, minus the difference in home loan amount, which is the difference between the buyers loan and the seller loan. So a home that looks as good as it might from the outside is likely to take longer to sell than a home that is undervalued.
In addition to being a state housing finance and development authority, South Carolina is also one of the least-known in the nation. It has been the country’s most popular non-profit and has a $1.2 billion operating budget, but its $2 billion gross revenues are in the region of $15 billion. And according to the Census, South Carolina ranks third in the nation in sales of housing. The average home construction is $1.3 million.
Given that the market is pretty strong, it might be understandable why South Carolina could be considered an attractive state for home buyers. But a couple of years ago, the state was considered one of the nation’s “lowest” in terms of home price appreciation. According to the Census, the state’s home prices increased 10.6% from September 2012 to September 2013. This is slightly lower than the average gain of only 9.4% for the nation as a whole.
This is a great problem-solver and a great problem-solver-in-chief for the state. Because the SCCDA is so cheap to operate, it can get around this problem by allowing counties to make their own rules about how much they can give out to a developer. These rules could be set by developers like us that are selling homes in the state, or counties like the one where we live.