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The problem is one that is more common than one would think… A Condominium Association needs repairs and maintenance work but lacks the necessary funds to complete that work.   Although your Condominium Association collects assessments from its members, those funds are intended for the regular operating expenses of the Association.  So, if your Community does not maintain reserve accounts, it is very likely that it will not have sufficient funds to cover the costs of deferred maintenance and repairs to the property.   In these situations, borrowing funds is most likely the best and least financially burdensome method of obtaining the funds your Community so desperately needs. 

Associations typically borrow from banks (conventional lenders), with the promise to pay back the full principal loan amount, along with interest. Some banks specialize in loans to HOAs and condo associations and will market themselves to your Board. However, you’ll need to contact your Association’s legal counsel to ensure that your Governing Documents do not contain any restrictions on borrowing funds.  For example, your Association’s Governing Documents may contain restrictions on the amount that may be borrowed or may require membership approval in order to borrow funds.  

When does a Condo Association need to consider borrowing funds?

The answer is simple: when the Association does not have sufficient funds on hand to cover the expenses related to your building, or when Special Assessments would impose a burden on the membership.  

Borrowing funds relieves the immediate financial burden on the Association and its members, as borrowing allows immediate access to needed funds while allowing repayment over a longer period of time than a typical Special Assessment.  

Find the funds you need with CondoHOALoans

If your Association is in need of funds to complete much-needed capital projects, fund reserve accounts, or provide adequate cash flow, we can help!  Representatives at CondoHOALoans are available to discuss your Community’s specific circumstances, as well as its challenges and goals. We’ll then assist your Board in creating a workable plan to overcome those challenges and achieve those goals – helping your community to identify funding options for the necessary repairs, maintenance, reserves, and cash flow to ensure your Community’s long-term financial stability.  Contact us today, and let’s get your Condo or HOA started on the path to financial success.