The Assessment Ratio Is the South Carolina Trap
South Carolina assesses property differently depending on how you use it, and the difference is large enough to change whether a deal works.
Owner-occupied property claiming legal residence status is assessed at a 4 percent ratio. Investment property and second homes are assessed at 6 percent half again as much on the same house.
That is not a rounding error. Two identical houses on the same street can carry substantially different annual tax bills purely because one is a rental. And because taxes sit inside both your debt-to-income calculation and any debt service coverage ratio, a property that pencils on the seller’s owner-occupied tax bill can fail entirely once it converts to investment use.
Underwrite at the 6 percent ratio, not the seller’s bill. If a listing shows a low tax figure, the odds are good it reflects legal residence status you will not inherit. This is the South Carolina equivalent of the Texas assessment reset, and it catches out-of-state investors constantly.
When the reassessment pushes a property below DSCR floor, a 1099 loan qualifying on your documented income is the path that still works.
The Lenders
Select Home Loans
Select Home Loans is a Non-QM mortgage broker (NMLS #2384002) writing 1099 investor loans across South Carolina. Coastal insurance appetite and short-term rental underwriting vary considerably between wholesale investors, which is exactly what a broker resolves a Hilton Head or Myrtle Beach file that stalls at one shelf routinely moves at another.
We quote DSCR and bank statement alternatives alongside the 1099 program so you can compare paths on the same property.
Get a quote · (888) 550-3296
Other lenders worth calling — listed in no particular order:
Mbanc A direct lender publishing detailed South Carolina-specific Non-QM analysis across bank statement, 1099, DSCR, asset utilization, and foreign national, including handling of South Carolina’s assessment ratios and deed recording. Also offers second-lien Non-QM up to $500K for borrowers preserving a low first mortgage.
OnPoint Mortgage Pro (NMLS #2134550) A brokerage licensed in South Carolina with a self-employed and Non-QM focus, publishing detailed analysis of bank statement expense factor negotiation.
Angel Oak Mortgage Solutions One of the largest dedicated Non-QM investors nationally, with a purpose-built 1099 income program. Reached through a broker.
Griffin Funding Publishes qualifying on 90 to 100 percent of gross 1099 income, 620 minimum credit, and loan amounts to $4 million.
Deephaven Mortgage A long-established Non-QM lender with DSCR and alternative documentation programs across the Southeast.
NQM Funding A wholesale Non-QM lender publishing South Carolina-specific broker guidance, including foreign national second-home file structuring. Broker channel.
South Carolina’s local Non-QM bench is underrepresented in these results. Verify current licensure before relying on any listing see the disclaimer at the end of this page.
The Coast Is Three Different Markets
South Carolina’s coastal investment inventory is often discussed as one thing. It is not, and the financing differs.
Charleston and Mount Pleasant attract high-net-worth inbound relocation and second-home demand. Prices have run well ahead of long-term rents, so DSCR on a long-term rental frequently fails. This is a strong 1099 case and also a strong asset-utilization case for borrowers arriving with substantial brokerage wealth.
Hilton Head, Kiawah, and the Sea Islands are second-home and resort markets where values are set by buyers whose income comes from elsewhere. The same decoupling as Charleston, more pronounced.
Myrtle Beach and the Grand Strand operate as a genuine short-term rental investment market with volume, documented platform income, and comparatively affordable acquisition. This is where DSCR works on the coast lenders will underwrite trailing platform income or Form 1007 projected market rent, and peak-season rates support strong annualized figures.
All three carry the same insurance problem. Wind and named-storm deductibles sit separate from base hazard coverage, and flood is separate again in the designated zones. Three premiums, all inside your qualification math. Get a real binder on the specific property before you finalize price a national estimate will understate the coast substantially.
How Qualifying Works
A 1099 loan qualifies you on income documented on your 1099 forms rather than the net profit shown after deductions. Appraisal, assets, credit, reserves, and ability-to-repay analysis all work normally.
Programs split into two camps. Some apply 90 percent or more of gross 1099 income with no expense deduction. Others apply an expense factor of 10 to 25 percent first.
On $180,000 of annual 1099 income:
| Method | Qualifying income |
|---|---|
| 90% of gross | $162,000/yr — $13,500/mo |
| Gross less 20% expense factor | $144,000/yr — $12,000/mo |
| Net profit from your tax return | frequently under $80,000 |
Model your payment with our mortgage calculators using the 6 percent assessment ratio.
One year or two
One-year suits growing income or a recent shift to independent work with prior experience in the same field.
Two-year suits tourism and hospitality operators whose year concentrates seasonally, and construction tied to project cycles.
The two-year self-employment history requirement is separate from the two-year income lookback. Ask about both.
South Carolina’s 1099 Population
Charleston hospitality, culinary, and creative professionals a genuinely large self-employed class in a small city, with Schedule C figures that bear little relation to earnings.
Real estate agents and brokers, in coastal markets where transaction values are high and commission income lumpy.
Construction and specialty trades, across a state absorbing sustained in-migration, with heavy documented business expense.
Healthcare contracting around the Charleston, Columbia, and Greenville medical systems.
Manufacturing and industrial contractors in the Upstate around the Greenville–Spartanburg corridor.
Property managers and short-term rental operators along the coast, whose own income is frequently 1099.
Inland South Carolina Behaves Differently
Columbia supports steady state government and university rental demand at prices where DSCR works comfortably.
Greenville and the Upstate have absorbed substantial manufacturing investment and support solid rent-to-price ratios with a growing employment base.
Rock Hill and the York County corridor function partly as Charlotte metro if your portfolio crosses the line, confirm your lender is licensed in North Carolina too.
Rural counties are where loan minimums bind, with inventory below common Non-QM floors of roughly $75,000 to $150,000.
Other South Carolina Specifics
Non-judicial foreclosure is not the norm. South Carolina foreclosures generally proceed through the courts, which lengthens timelines and makes investors somewhat more conservative on leverage than in a power-of-sale state like Georgia or Tennessee.
Deed recording and closing practice follow specific South Carolina conventions; use a closing attorney who works in the state routinely.
Foreign national investment is unusually active here, particularly on the coast. If that applies to you, foreign national programs exist and are fully underwritten say so at the outset.
Short-term rental regulation varies by municipality, and several coastal jurisdictions have moved to restrict or license. Verify the specific address.
Investment Property Terms
- Down payment: 20–25 percent typical, better pricing at 25 percent and above
- Credit: 620 floor at most investors; real improvements at 680, 700, 740
- Reserves: 6–12 months PITIA
- Prepayment penalties: common on investment property, typically 1–3 years, often buyable at a quarter to a half point
Compare with our purchase loan options and refinance loan options.
1099 or DSCR?
Use DSCR in Columbia, Greenville, and the Upstate on long-term rentals, and on Myrtle Beach short-term rentals with documented trailing platform income.
Use a 1099 loan in Charleston, Mount Pleasant, Hilton Head, and the resort islands where prices have decoupled from rents; where the 6 percent assessment or a coastal insurance premium has sunk the ratio; on properties needing work first; or where you are also buying a primary residence.
If you already hold South Carolina rentals, a DSCR refinance works where the ratio supports it.
Questions to Ask
- Are you underwriting taxes at the 6 percent investment assessment ratio or the seller’s 4 percent legal residence bill? (Ask this first.)
- Do you qualify on gross 1099 income, or apply an expense factor?
- Have you closed a coastal file recently, and how did wind and flood coverage underwrite?
- For Myrtle Beach do you underwrite trailing platform income, and how many months?
- Are you licensed in North Carolina too? (Ask this in York County.)
- Can you quote DSCR on the same property?
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Disclaimer
The lenders described on this page are listed in no particular order. Select Home Loans appears first because we publish this page and originate these loans; we have a commercial interest in this category. No lender listed has paid for placement.
This page reflects our opinion based on publicly available information at the time of writing. It is general information, not a recommendation, an endorsement, or an offer of credit. Lender programs, guidelines, licensure, pricing, and availability change frequently and without notice, and nothing here guarantees that any lender is currently licensed in South Carolina, currently offers the program described, or will approve your file.
Assessment ratios, millage, insurance availability, and short-term rental ordinances vary by property and jurisdiction and change; verify independently. Consult a licensed mortgage professional and where appropriate a tax advisor, attorney, or financial advisor before making any borrowing decision. Verify any lender’s licensure through NMLS Consumer Access at nmlsconsumeraccess.org.
Select Home Loans, NMLS #2384002. Equal Housing Opportunity.
