HOA and condo association loans in South Carolina
South Carolina has no comprehensive community association act, and the power to borrow does not come from either of its association statutes. It comes from whether your association is incorporated.
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Whether you are incorporated matters more than what kind of community you are
South Carolina has two community association statutes: the Horizontal Property Act, which governs condominium regimes, and the South Carolina Homeowners Association Act of 2018, which reaches both planned communities and condominium regimes. Most boards expect the condominium-or-HOA split to be the one that matters.
It is not the one that decides whether you can borrow. Neither statute grants an association the power to borrow money, and neither mentions it. That power comes from the Nonprofit Corporation Act, and it reaches your association only if your association is incorporated under it. Here that is a choice rather than an automatic consequence: the statute says a council of co-owners may incorporate.
Incorporation is where the borrowing power comes from
A South Carolina nonprofit corporation has the power to make contracts and guaranties, incur liabilities, borrow money, issue notes, bonds and other obligations, and secure any of its obligations by mortgage or pledge of any of its property, franchises or income.
Income is the word that matters for an association. It is what lets assessment revenue secure a loan, and association loans are typically secured by assessments rather than real estate. The grant applies unless the articles of incorporation provide otherwise, so the articles are read first.
S.C. Code Ann. § 33-31-302(7), re-read October 12, 2026 on scstatehouse.gov.
Your governing documents carry more weight here than in most states
We read both South Carolina community association statutes in full. Neither the Homeowners Association Act nor the Horizontal Property Act contains any provision on borrowing, on pledging assessments, or on association indebtedness, and neither imposes a reserve study or a reserve funding requirement.
That is not a gap to work around. It means the declaration, the master deed and the bylaws are the operative authority, and a lender will read them closely because there is no statute standing behind them. A board that has those documents to hand at the first conversation saves the most time.
S.C. Code Ann. tit. 27, ch. 30 and ch. 31, both read in full September 23, 2026 and re-checked October 12, 2026.
Condominiums: after damage, the statute's default is to rebuild
Where property in a condominium regime is damaged or destroyed, the council of co-owners must repair or replace it promptly unless the repair is illegal under a state statute or local health ordinance, or eighty percent of the co-owners vote not to rebuild. The bylaws may require a percentage greater, but not less than, eighty percent.
So rebuilding is the default, and rebuilding has to be funded. Section 27-31-250 makes the cost of repair or replacement above insurance proceeds and reserves a common expense. An older section, 27-31-260, says rebuilding costs that insurance does not cover are paid by the co-owners directly affected by the damage, or as the bylaws provide, so ask your attorney how the two apply to your regime. That shortfall is where a board starts weighing a loan against a special assessment.
S.C. Code Ann. § 27-31-250 and § 27-31-260, re-read October 12, 2026 on scstatehouse.gov.
The budget notice rule, and who it does not apply to
Before a homeowners association takes action to increase an annual budget, it must give homeowners at least forty-eight hours' notice of the meeting at which that decision is made. Notice may be posted in a common area, on the association's website, by email, or by whatever method the bylaws provide that ensures actual notice.
This is a notice requirement. It is not a vote threshold and it is not a cap on the increase, which is a difference worth knowing if you have read about other states. The Act's definition of a homeowners association covers one that manages a condominium regime as well as a planned community. The rule does not apply to an association incorporated under the South Carolina Nonprofit Corporation Act.
S.C. Code Ann. § 27-30-120(6) and § 27-30-140, re-read October 12, 2026 on scstatehouse.gov.
This section summarizes South Carolina law current as of October 2026, read from the statutes themselves rather than from secondary sources. We place loans and we do not practice law, so treat this as general information and confirm with your association’s attorney how it applies to your community.
Boards also ask
Should we take a loan or levy a lump sum special assessment?
They fund the same project and feel completely different to owners. A lump sum special assessment asks every owner for a large payment at once, which is where boards meet the hardest resistance and where owners on fixed incomes get hurt. A loan spreads the same cost over years, so the monthly impact per unit is far smaller, and it does not depend on every owner having cash available. The tradeoff is interest: over the life of the loan you pay more in total. Some communities are better served by a phased project or a smaller assessment paired with a smaller loan. We model all of them side by side so your board decides with the same numbers in front of everyone.
Why do associations borrow money?
To fund major capital projects, cover emergency repairs, or avoid a lump sum special assessment that asks every owner for a large payment at once. Waiting is also a decision. Deferred work rarely gets cheaper, and an unsafe condition can force the timeline for you.
How do we get an HOA loan?
Five steps. You tell us about the project and send your financials; we review what your association can realistically support and confirm your borrowing authority; we take your project to the lenders most likely to approve a community like yours and bring back what they offer; your board selects one and completes the approval process your documents require; the loan closes. From application to closing it usually runs 30 to 90 days, and some loans take longer for a variety of reasons.
HOA loans are all we do.
We strategize, organize, and place your loan where it’s most likely to succeed.
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