HELOCs and Second Mortgages on Hilton Head Island, SC: What an Island Home Can Borrow

Work on the red and white striped Harbour Town Lighthouse began in 1969 and was finished in the spring of 1970, and Lighthousefriends' history of the light says critics called it Fraser's Folly. The lighthouse is at Harbour Town inside Sea Pines, one of the island's gated communities, so an owner there lives under an association's rules. An owner in Forest Beach, which has no gate and an owners' association you can join or skip, does not.

On Hilton Head Island, how much you can borrow against your home depends first on how you use it, because the lenders I use allow less on a second home or investment property than on a home you live in.

I'm Jeff Moran, NMLS #483943, a mortgage broker licensed in South Carolina through C2 Financial Corporation, and I have been in the mortgage business since 1996. I work from Bluffton, on the other side of the bridges. My page on Hilton Head Island itself covers the island's history and communities, the Hilton Head-Bluffton area page covers the region, and the home equity page explains HELOCs and second mortgages in general. This page is about borrowing against a home inside the Town of Hilton Head Island. The lender terms below come from the second-mortgage lenders I work with, in matrices dated May 2026, and they change, so please read them as the shape of the options and not as a quote.

A primary home, a second home and an investment property

Lenders sort a home by how it is used, and the sorting changes the limits. A primary home is the one you live in. A second home is one you keep for your own use. An investment property is one you rent out. South Carolina's property tax law draws a similar line. A home you own and live in as your legal residence is assessed at 4% of its value, so each mill of tax costs $4 for every $100,000. Other property, which takes in a second home, is assessed at 6%, so each mill costs $6. If you rent the home out for short stays, the Town's short-term rental FAQ says every owner needs a short-term rental permit as well as a business license. The Town's ordinance page says the permit application must be in a person's name, so an LLC cannot apply for it.

Please tell me early how the home is used, and how often it is rented if it is. That tells me which column of each lender's matrix applies, and the column changes the limit.

A Hilton Head name or address does not always mean a home on the island. Sun City Hilton Head, for one, is on the mainland and straddles the Beaufort and Jasper county line. Beaufort County's property records show whether a property is inside the Town. If the home turns out to be on the mainland side, my Bluffton page is the better place to start.

A HELOC or a home equity loan on an island home

Both of these are second mortgages. The new loan comes behind your first mortgage, and the first mortgage stays exactly as it is.

A home equity line of credit, or HELOC, is a credit line you borrow from as you need it during a draw period, with interest-only payments, and then pay down during a repayment period. On one lender's matrix, dated May 1, 2026, the rate follows the Prime Rate, you draw for 10 years and repay over 20, and lines run from $25,000 to $750,000. A second lender's matrix, dated May 8, 2026, offers draw periods of 3, 5 or 10 years and starts at $125,000. That second lender also offers a home equity loan, which its sheet calls a closed-end second: one lump sum at a fixed rate, from $100,000 to $750,000, repaid over 10, 15, 20 or 30 years.

If you would rather replace the first mortgage and take cash out in the same loan, cash-out refinancing in South Carolina covers that route.

Borrowing limits on an island home, with an example

Lenders measure this with the combined loan-to-value ratio, or CLTV: your first mortgage balance plus the new line, divided by the home's value. For the example, say a home is worth $900,000 and the first mortgage balance is $400,000. Those are round figures to show the arithmetic, and they say nothing about island prices. The table shows the ceiling the first lender's May 1, 2026 matrix allows for each use of the home.

Illustration: $900,000 home, $400,000 first mortgage	Max CLTV	All loans combined	Room for the new line
Primary home, credit score 720 or higher	95%	$855,000	$455,000
Primary home, score 680 to 719	90%	$810,000	$410,000
Primary home, score 660 to 679	80%	$720,000	$200,000 (the line cap)
Primary home, score 640 to 659	80%	$720,000	$100,000 (the line cap)
Second home, score 680 or higher	90%	$810,000	$410,000
Investment property HELOC, score 680	80%	$720,000	$250,000 (the line cap)

Some rows are limited twice. The 80% CLTV would leave $320,000 of room, but that lender caps the line at $200,000 for a score of 660 to 679 and at $100,000 for 640 to 659. Its investment property HELOC runs from $50,000 to $250,000, with a 5-year draw and a 10-year repayment. A second home with a score of 640 to 679 also tops out at 80% CLTV, under the same line caps.

The other lender's matrix reads differently. Its HELOC on a second home or an investment property goes up to $400,000 at 80% CLTV with a 720 score, which on the same home is $320,000 of room. Its closed-end second on those homes goes up to $500,000 at 70% CLTV with a 720 score, which on the same home is $230,000. Its closed-end second on a primary home allows 90% CLTV at a 680 score for loans up to $400,000, or at a 720 score for loans up to $500,000. That difference is why I look at more than one lender before I tell you how much you can borrow.

All of these are ceilings. Your income, your credit and the value the lender arrives at for the home decide where you land under them.

Second homes and investment properties on the island

Two limits on the first lender's sheet matter most for a second home. Second homes are restricted to one unit, and the combined loan amount tops out at 90% where a primary home can reach 95%. An investment property has the narrowest box: its own HELOC product, a smaller line, a credit score of 680 and a limit of 80% CLTV.

The way the home is titled matters too. One of my lenders does not allow a home vested in an LLC, a corporation or a partnership, and it does not allow irrevocable trusts. If your island home is titled that way, please tell me at the start. The Town's short-term rental permit also goes to an individual rather than an LLC, so it is worth reading title and permit side by side before you plan around either one.

Inside a gate, the association's covenants decide what you can rent or change, and a community's rules can go further than the Town does. If rental income is part of your plan, you will want to check the association's rules on renting before you borrow with that plan in mind.

Gated communities, clubs and associations

Dues and club charges depend on the community. Gated communities such as Sea Pines and Palmetto Dunes have their own owners' associations. In a club community the club can be part of the bill: Long Cove Club's fees page says its annual dues give property owners use of the community amenities and include traditional HOA and POA fees. I do not print dues here because they change. The figures that apply to your home are in the association's resale documents and in the MLS listing, and I go through them with you because association charges are part of your monthly costs.

Flood zones and flood insurance on an island home

The Island Packet reported that FEMA's 1986 maps put about 75% of the island in a high-risk flood zone, and the 2021 maps put about 25% of the land area there. The Town's flood zone page explains the zones: VE and AE are high-risk, and zone X is low-risk. The first lender above is a credit union. The federal flood rule for credit unions says it cannot make a loan secured by a home in a high-risk zone unless the home is covered by flood insurance for the term of the loan. Please look up the zone on your specific home before you apply. The Town says it has been in FEMA's Community Rating System since 1991, holds a Class 5 rating, and that owners can see a discount of up to 25% on flood insurance premiums.

Costs and recording in South Carolina

South Carolina has no mortgage recording tax. The state's recording fee, which is based on value, applies to deeds that transfer real estate and not to a mortgage. The Town's taxes and fees page sets its real estate transfer fee at 0.25% of the sale price, collected by Beaufort County for the Town. That is a fee on selling and buying, and borrowing against a home you keep is not a sale, so I do not expect it to come up on a line of credit. The Town's code is where I confirm it on a specific file. The cost of the loan itself is in the lender's fee schedule, and I go through it with you line by line. My South Carolina page covers the state's attorney-closing rules.

Your first mortgage statement and a few facts about the home

Please provide your most recent first mortgage statement, all pages, even if the last page is intentionally left blank, so I can start from your real balance and not an estimate. Please also tell me how you use the home, how it is titled and, if it is in a gated community, which one. You are welcome to call me and talk it through before anything else.

Nothing on this page is a loan approval, a denial or a commitment to lend, and it is not tax or legal advice. The lenders' matrices are dated May 2026 and change, and the value of your home, your credit and your income decide where you land under them.

Common questions

How much can I borrow against my Hilton Head Island home?

It depends on the combined loan-to-value ratio the lender allows for how you use the home. Take your home's value, multiply by the CLTV limit, and subtract your first mortgage balance. The table above works that out on an example island home. On a primary home with a credit score of 720 or higher, the first lender's matrix allows up to 95%, and on an investment property it allows 80%.

Can I get a HELOC on a second home or investment property on Hilton Head Island?

Yes, with lower limits than a primary home. On the first lender's matrix a second home is limited to one unit, with 90% CLTV at a score of 680 or higher and 80% at 640 to 679. An investment property HELOC has a 5-year draw, a 10-year repayment, a smaller maximum line, a score of 680 and 80% CLTV. The other lender allows 80% CLTV with a 720 score on a second home or an investment property. The line sizes for both are in the borrowing limits section above.

Can I borrow against an island home that is held in an LLC?

One of the lenders I work with does not allow a home vested in an LLC, a corporation or a partnership, so the title matters before anything else. Please tell me how the home is titled at the start, and I will tell you which lenders are still open. The Town's short-term rental permit also goes to an individual rather than an LLC.

Does the Town's 0.25% transfer fee apply to a HELOC?

The Town describes the fee as 0.25% of the sale price on real estate in the Town. A line of credit on a home you keep is not a sale, so I do not expect it to come up. South Carolina also has no mortgage recording tax. I confirm both against the Town's code and the lender's fee schedule on your specific file.

Do I need flood insurance for a HELOC on Hilton Head Island?

If the home is in a high-risk flood zone, VE or AE, plan on it. The credit union lender I use cannot make a loan on a home in a high-risk zone without flood insurance under the federal rule for credit unions. About 25% of the island's land is in a high-risk zone on FEMA's 2021 maps, as the Island Packet reported. Please look up the zone on your specific home first, because the zone decides whether a policy is required.