HOA and condo association loans in South Carolina.
South Carolina has no single community association act, and the power to borrow does not come from the homeowners association statute. 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 governs condominiums and other communities under two separate statutes: the Horizontal Property Act of 1967 for condominium regimes, and the Homeowners Association Act of 2018 for everything else. That is the split most boards expect to matter.
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, which is the structure nearly every association loan uses. The grant applies unless the articles of incorporation provide otherwise, so the articles are read first.
S.C. Code Ann. § 33-31-302(7), read 23 September 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 23 September 2026.
Condominiums: the rebuild vote is the one threshold in the statute
Where a condominium regime is damaged, the co-owners vote on whether to rebuild, and the bylaws may require a percentage greater, but not less than, eighty percent of the co-owners to vote not to rebuild.
In practice the default is that you rebuild, and rebuilding has to be funded. The cost of repair or replacement above what insurance and reserves cover is a common expense, which is the point at which most boards start pricing a loan against a special assessment.
S.C. Code Ann. § 27-31-250, read 23 September 2026.
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. It also does not apply to an association incorporated under the South Carolina Nonprofit Corporation Act.
S.C. Code Ann. § 27-30-140, read 23 September 2026.
This section summarizes South Carolina law current as of 23 September 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 competing proposals; your board selects one and completes the approval process your documents require; the loan closes and funds draw as the work proceeds. Most boards spend a few hours of their own time across the whole process. From application to closing it usually runs 30 to 90 days.
HOA lending is all we do.
We strategize, organize, and place your loan where it’s most likely to succeed.
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