South Carolina S 1027: Community development corporations

Bill Text

2025-2026 Bill 1027 Text of Previous Version (Mar. 18, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 1027

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS 
BY ADDING SECTION 6-1-200 SO AS TO AUTHORIZE COMMUNITY DEVELOPMENT 
CORPORATIONS, TO DEFINE TERMS, TO ESTABLISH LENDING AUTHORITY, CONDITIONS AND 
LIMITATIONS, AND EXEMPTIONS, AND TO PROVIDE A SUNSET CLAUSE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Article 1, Chapter 1, Title 6 
of the S.C. Code is amended by adding:

 Section 
6-1-200. (A) For purposes of this 
section:

 (1) "Community Development Corporation" 
or "CDC" means a nonprofit corporation that:

 (a) is chartered under Chapter 31, Title 
33 or the laws of another jurisdiction authorized to do business in this State;

 (b) was created by, or was created at 
the direction of, a county or municipality of this State pursuant to a formal 
action of the governing body of that county or municipality; and

 (c) has as its primary mission the 
economic and community development of a defined geographic service area within 
this State.

 (2) "Designated service area" means the 
geographic area described in the CDC's enabling ordinance, resolution, or 
charter, within which the CDC is authorized to carry out its community 
development mission.

 (3) "Improvement" means any 
construction, reconstruction, rehabilitation, repair, renovation, historic 
preservation, or other physical betterment of real property including, but not 
limited to, residential, commercial, mixed-use, and community facility 
improvements.

 (4) "Interest in real property" means 
any ownership interest, ground lease, conservation easement, deed restriction, 
option to purchase, right of first refusal, or other legally recognized 
interest held by the CDC in real property.

 (5) "Qualified borrower" means an 
individual, partnership, limited liability company, corporation, nonprofit 
corporation, or other legal entity that proposes to make an improvement to real 
property located within the CDC's designated service area or on real property 
in which the CDC holds an interest.

 (B) Subject to the conditions set forth 
in subsection (C), a CDC may lend money to a qualified borrower for the purpose 
of financing an improvement to real property located:

 (1) within the CDC's designated service 
area; or

 (2) on real property in which the CDC 
holds an interest. Such loans may be made from funds lawfully available to the 
CDC including, but not limited to, funds received by grant, donation, 
appropriation, or investment.

 (C) The lending authority granted by 
this section is subject to the following conditions:

 (1) The CDC must adopt written loan 
policies and procedures before making any loan under this section. Such 
policies must address, at minimum: loan application requirements; underwriting 
standards; interest rate parameters; loan terms; collateral requirements, if 
any; and default and collection procedures.

 (2) The rate of interest charged on any 
loan made under this section may not exceed the maximum rate permissible under 
applicable South Carolina law for similar transactions, or as otherwise 
authorized by the governing body of the county or municipality that created the 
CDC.

 (3) No loan made under this section may 
be used for purposes other than an improvement as defined in subsection (A)(3), 
and no loan proceeds may be disbursed until the CDC has verified the purpose 
and location of the proposed improvement.

 (4) The CDC must maintain adequate 
records of all loans made under this section, including the identity of each 
borrower, the amounts and terms of each loan, the real property to be improved, 
and the repayment history. The loan records are subject to inspection by the 
governing body of the county or municipality that created the CDC upon 
reasonable notice.

 (5) The CDC must report annually to the 
governing body of the county or municipality that created it regarding all loan 
activity conducted under this section, including the aggregate number and 
dollar amount of loans made, the types of improvements financed, the geographic 
distribution of loans within the designated service area, and the loan 
repayment status.

 (6) Nothing in this section should be 
construed to authorize a CDC to accept deposits from the public, to issue 
certificates of deposit, or to engage in any activity that would require 
licensure as a bank, credit union, or other depository institution under state 
or federal law.

 (D) The making of loans by a CDC in 
accordance with this section, in furtherance of its nonprofit community 
development mission and consistent with the conditions set forth in subsection 
(C), does not constitute engaging in the "business of lending"