Reverse Mortgages in Sun City Hilton Head, SC: Association Dues, Two Counties and the 2026 HECM Limit

In August 1995, the first 100 residents moved into Sun City Hilton Head, on land that Union Camp had used as a pine tree farm for paper manufacturing, according to the association's own history. The association marked the 30th anniversary in 2025 with a trivia game called "30 Questions for 30 Years". This page is for the owner here who is wondering what a reverse mortgage would ask of them.

A Sun City Hilton Head homeowner who is 62 or older can use FHA's reverse mortgage, called a HECM, to turn part of the home's value into cash with no monthly mortgage payment. That holds as long as the home stays your principal residence and the property taxes, insurance and association dues keep getting paid. 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, down US-278 from the main gate.

My page on Sun City Hilton Head covers the community itself, and the Hilton Head-Bluffton area page covers the region. My home equity page puts a HECM next to a HELOC, a home equity loan and a cash-out refinance, which is worth reading first, because a reverse mortgage is right for some clients and wrong for others. Every HUD fact below comes from HUD's Handbook 4000.1, the HECM regulation, 24 CFR Part 206, or a HUD mortgagee letter, as of October 30, 2026.

The HECM in plain terms, and what it asks of you

A HECM is, in HUD's words, "a non-recourse, reverse mortgage" with "no corresponding monthly mortgage payment." Because you do not make a monthly mortgage payment, the interest and the mortgage insurance premium are added to what you owe. The balance grows over the life of the loan. I would rather say that plainly before anything else.

The loan has a few price tags. HUD Mortgagee Letter 2017-12 sets the up-front mortgage insurance premium at 2% of the maximum claim amount, which is the lesser of the appraised value, the sale price on a purchase and HUD's national limit. The annual premium is 0.50% of the outstanding balance, charged monthly from closing. Under the Handbook, the interest rate can be fixed, adjustable once a year with a 2% annual cap and a 5% lifetime cap, or adjustable monthly with a lifetime cap of 10 points over the starting rate.

In exchange, the loan is non-recourse: the regulation says you have no personal liability for the balance, and the lender can collect only through a sale of the home. You keep the home in good repair, you pay the property charges, and you insure it, with flood insurance where it is required. If property charges go unpaid, the loan can be called due.

The HECM rules that matter inside the Sun City gates

You must be 62 or older, and the home must be your main home. Everyone on the loan has to be at least 62 on the closing date, and HUD sets no maximum age. The home has to be your principal residence, meaning the home where you spend the majority of the calendar year, and a person can have only one. Vacation homes are not eligible. For a Sun City owner who splits the year between the Lowcountry and somewhere else, that test comes first, because a home used for part of the year may not qualify.

Your spouse can be younger than 62, and Sun City has its own age rule too. HUD lets a spouse who is not on the loan be under 62. Sun City Hilton Head has a separate age rule. The association's 2026 Schedule of Fees and Community Rules says each household must be occupied by at least one qualifying occupant, age 55 or older. It also says a co-occupant may stay if the qualifying occupant leaves, and that children under 19 may not be residents. A client who is 62 or older meets the 55-or-older part alone. The loan does not change the association's rules, and the recorded covenants answer any question about who can live in the home.

A spouse who is not on the loan has protection, with conditions. After the last person on the loan dies, the due date is deferred for a qualifying spouse. That spouse was married to the person on the loan at closing and stayed married, was named in the loan documents, and lives in the home as a principal residence. Within 90 days that spouse has to establish legal ownership or a legal right to stay for life, and keep meeting the loan's obligations. The loan pays out nothing during the deferral.

The property has to meet HUD's property rules. HUD's list of eligible homes includes one-to-four unit homes where you live in one unit, detached and semi-detached homes, townhouses, and manufactured housing that meets HUD's standards. Co-ops are not eligible. Before approval the lender also reviews your credit history, cash flow and residual income, and any extenuating circumstances or compensating factors.

Sun City's dues are a property charge, and they keep coming

Under the regulation, property charges include taxes, hazard and flood insurance premiums, ground rents, condo, PUD and HOA fees, and special assessments. A HECM does not stop any of those bills, and unpaid ones can lead to the loan being called due with HUD's approval.

The association's 2026 fee schedule puts the base assessment at $2,820 a year, billed quarterly at $705. Some neighborhoods add their own assessment on top of that, from $792 a year at Plymouth Cottages to $5,640 at Summerplace Village, and the schedule says all fees can change. With the base added, those two neighborhoods come to $3,612 and $8,460 a year at today's rates.

The HECM has a tool for taxes and insurance, called a Life Expectancy Set-Aside, or LESA. HUD's Handbook 4000.1 describes it as a portion of what you could borrow that is set aside to pay property taxes, hazard insurance and flood insurance where it applies, and says it is not an escrow account. Association dues are not on that list, so those stay a bill you pay yourself. A reverse mortgage on a Sun City home makes sense only if the dues, taxes, insurance and upkeep fit your monthly budget for as long as you live there.

The tax bill is different on each side of the county line

Sun City is in two counties. According to the Beaufort and Jasper county parcel records, the older southern part, around the halls, Okatie Creek and Hidden Cypress, and Riverbend are in unincorporated Beaufort County. The northern sections, including the East Argent and Sun City West sections off Sundance Drive, are in Jasper County and inside the City of Hardeeville, which my Hardeeville page covers. The tax bill follows that line, and my Sun City page covers confirming which side an address is on.

South Carolina assesses a home you own and live in as your legal residence at 4% of its value, and living in the home as your principal residence is also what a HECM requires. Beaufort County's 2026 millage card for the Sun City district adds up to 121.9 mills at the 4% rate. On the Jasper side, the county, school and City of Hardeeville levies come to 219.6 mills at 4%, before a Jasper credit that lowers the bill. Hilton Head Area REALTORS' August 2026 report for Sun City and Riverbend puts the median MLS sale price at $506,500. On that price, my own arithmetic gives about $2,470 a year on the Beaufort side and about $4,449 on the Jasper side before the credit. Those are estimates and not a bill, so a real address needs its real tax record. The taxes are the owner's bill under a HECM, on either side of the line.

Buying into Sun City with a HECM for Purchase

A client selling a larger home elsewhere to move into Sun City, without taking on a monthly mortgage payment, is what a HECM for Purchase is for. You use the HECM to buy an existing one-to-four unit home, you live in one unit as your principal residence, and everyone on the loan has to move in within 60 days of closing.

On a resale, the association's 2026 schedule lists a $3,500 Community Enhancement Fee, a $300 administrative transfer fee, and a New Member Fee of two-thirds of 1% of the sales price. The association's governing documents put the New Member Fee on the seller unless the contract says the buyer pays it, and put the Community Enhancement Fee on the buyer. A HECM purchase needs cash for these, so I add them to the plan from the first conversation. South Carolina Code sections 12-24-10 and 12-24-90 also set a deed recording fee of $1.85 per $500 of value: $1.30 to the state and $0.55 to the county. That fee applies to a deed that transfers real estate, so it shows up on a purchase, and a HECM on a home you already own has no deed to record.

The 2026 limit against Sun City prices

HUD Mortgagee Letter 2025-22 sets the 2026 maximum claim amount at $1,249,125, for case numbers assigned between January 1 and December 31, 2026. It is one national figure, the same in Beaufort County, Jasper County and everywhere else. Del Webb's base prices for new Sun City homes run from $335,990 to $715,990, and the August median MLS sale price was $506,500. So the limit does not hold back a typical Sun City home. How much a client can borrow depends on the youngest person's age, the interest rate and the home's value, and I work that out on a real scenario, never from a rule of thumb.

Counseling is required, and no fee is collected until it is done

Before a HECM goes forward, the client, any spouse who is not on the loan and any other owner who is not on the loan must receive counseling from a HUD-approved HECM counselor. The lender gives you a list of approved agencies at first contact, and you contact the agency yourself. HUD's counselor locator is the place to start. HUD's Handbook 4000.1 lets a lender take an application and give disclosures before counseling is finished, but the lender cannot collect any fee until it has the signed counseling certificate.

Heirs and the day the loan comes due

A HECM comes due when the last person on the loan dies and the home is not the principal residence of a surviving person on the loan, or when everyone on the loan conveys title. With HUD's approval, it can also be called due in four situations. The home stops being the principal residence for a reason other than death. Someone is away for more than 12 consecutive months because of illness and no one else on the loan lives there. Property charges go unpaid. Or another obligation of the loan is not met.

At that point, the client, the spouse who qualifies for the deferral, the estate or the heirs can pay the balance, sell the home, sign a deed in lieu of foreclosure, or cure the default. A sale does not have to bring more than the amount HUD sets, and the regulation says that amount "shall not exceed 95 percent of the appraised value." Because the loan is non-recourse, the heirs do not owe more than the home brings in a sale. The balance will have grown, though, so what is left for them is smaller than with no reverse mortgage.

Common questions

Can I get a reverse mortgage on a home in Sun City Hilton Head?

Yes, if the youngest person on the loan is 62 or older at closing, the home is your principal residence, the home meets HUD's property rules, and you complete counseling with a HUD-approved counselor. The Sun City age rule of 55 or older is separate, and a client who is 62 satisfies it. Beaufort County and Jasper County share the same HECM limit.

Do I still pay the Sun City association dues and property taxes with a HECM?

Yes. The regulation lists taxes, insurance premiums, HOA fees and special assessments as property charges, and an owner has to keep paying them. A LESA can be set aside for taxes and insurance, but association dues are not part of it.

Can my spouse stay in the home if they are younger than 62?

A spouse who is not on the loan can be under 62 under HUD's rules, and the due date can be deferred after the last person on the loan dies if the spouse meets the conditions above. Sun City's own age rule is a second question, and the answer for a spouse under 55 is in the recorded covenants.

Can I use a HECM to buy a home in Sun City?

Yes, through HECM for Purchase, on an existing one-to-four unit home that you will live in as your principal residence. Everyone on the loan has to move in within 60 days of closing, and you need cash at closing for your share of the price and the costs, including Sun City's resale charges and the deed recording fee. The home equity page compares the HECM with other options, and I can walk through a purchase with you by phone.

What happens to the loan when I pass away or move out?

The loan comes due when the last person on the loan dies and the home is not the principal residence of a surviving person on the loan, or when everyone on the loan conveys title. A qualifying spouse can have the due date deferred. With HUD's approval, it can also be called due if the home stops being your principal residence for a reason other than death. Your heirs can pay the balance, sell the home, sign a deed in lieu, or cure the default, and because the loan is non-recourse they never owe more than the home brings in a sale.

Does my credit score decide whether I get a HECM?

Not by itself. The Handbook says credit scores are not a criterion for processing or evaluating a HECM. The lender still reviews your credit history, cash flow and residual income, so a history of unpaid property charges can matter. My South Carolina page covers the state, and I am glad to look at your situation with you before you decide anything.