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HOA Loans and Condominium Association Loans Have Advantages Over Special Assessments

Condominium associations and HOAs will enjoy many advantages from obtaining an HOA loan or a condominium association loan to meet their capital improvement needs. Avoiding special assessments is chief among those advantages as special assessments can be difficult to get approved and just as difficult to collect.

When funds are needed immediately for a capital improvement project, an HOA loan or condominium association loan removes the need for a large, lump-sum special assessment. Routinely, condominium unit owners and HOA residents rebel against such a fee as many owners are simply able to afford it. By providing an alternative, an HOA or condominium association relieves financial stress on its members and gets the money it needs to perform its duties.

By spreading the payments out over a longer period of time, many condominium association and HOA members view the loan repayment as just another part of their monthly common fee payment. Since the payments are spread out over time, there is no large balloon payment as there would be with a special assessment.

The HOA loan or condominium association loan is also more appealing to contractors who are concerned that they may not be paid if a special assessment is required. With proceeds from the HOA loan or condominium association loan in hand, an HOA or condominium association can seek out competitive bids and terms for payments of services. This can lead to substantial savings for the HOA or condominium association.

Depleting an HOA’s or condominium association’s reserve fund is never a good idea. In fact, FHA lending guidelines could penalize members of a condominium association for depleting reserves by not allowing mortgages to be made within the property. An HOA loan or condominium association loan is a liability to the association but it does not deplete the reserve fund, which needs to stay intact in case emergent situations arise within the HOA or condominium association.

When your HOA or condominium association is faced with the challenge of raising money for a capital improvement project, an HOA loan or condominium association loan has all of these advantages over levying a special assessment on your HOA or condominium association members. Apply for your loan today at HOALendingSolutions.com.