Condo Association Loan FAQs

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Condo Association Loan FAQs

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Our association's dam is in need of repair and we would like to get a condo association loan for doing the repairs. What is a likely rate for a condo association loan?

The exact interest rates are a function of several variables. However, the approximate range in today's market is 6.75% to 7.25%. For a current condo association loan rate quote you can submit the Free Loan Proposal Request Form

We are a Co-Op. Do we qualify for an Association Loan?

Yes, Community Association Lending is for all types of Associations including: Condominiums, Homeowner Association's, Town-homes, Cooperatives, Timeshares.

Are there any restriction to what our HOA can use a loan for?

Lenders usually work with associations to provide innovative loan structures to just about any application. Typical reasons for Home Owner Assocation (HOA) loans are to support capital maintenance projects, construction defect litigation, insurance premium financing, purchasing real estate or equipment, land lease buyouts.

Other solutions include an Association Line of Credit which HOA's can tap at their discretion to increase their cash flow.

What's the difference between an Association Loan and a Line of Credit?

When a Condo Association takes out a loan, the lender provides all the funds in one lump sum. With a line of credit, a Condo Association qualifies for a credit limit, which they can draw down on and pay back at any time.

Top 5 Reasons for a Condo Association Loan

1. Increase cash flow

2. Capital improvements or repairs

3. Purchase of additional property

4. Purchase of units from owners

5. Construction defect litigation

Comments

Thank you. This article gave me the information I,ve never get from my HOA boarding in 10 (ten) years.

Posted @ Saturday, September 06, 2008 4:56 PM by Joao Rita

Hello,

We have a small Condo Association of 3 units. We need a new roof and our estimate is 8K. There is only about $900 in the accout. None of us individually can come up with the money. How can we go about getting the funds?

Thanks.

Posted @ Tuesday, October 07, 2008 7:47 PM by Chelsea

Chelsea, although fixing the roof of your condo building is a good reason for an association loan, your condo association's number of units doesn't meet the minimum requirement for loans to a condo associations. Community lenders will not look at providing a loan to condo associations with less than 15-20 units in the building or as part of the HOA.

I'd recommend seeing if you and your neighbors can personally qualify for an Home Equity Line of Credit (HELOC).

Posted @ Wednesday, October 08, 2008 10:01 AM by Roger

Our condo board is out of control with expensive projects. Now the board want to get a bank loan. Is there anyway at bank level to kill this loan. Texas

Posted @ Thursday, October 30, 2008 7:46 AM by texas

If other condo association members feel the same way about a condo association loan, you and the other members may have better luck trying to remove board members.

HOA and condo association loans are very specific in what they can be used for. If your association is creditworthy and the loan is for a capital improvement, your condo association may get the bank loan.

Posted @ Thursday, October 30, 2008 9:50 AM by roger

What is the individual owner's liability? Also, is the HOA able to deduct the interest payments when filing as a non-profit even if the individual owner cannot?

Thanks,

Posted @ Thursday, December 18, 2008 6:06 PM by Carolin

Condo Association loans are secured by the HOA lender's right to assess the association's unit owners and would fall under whatever assessment right's the association in entitled to. Each state can be different. Make sure you check with a lawyer, as to the personal liabilities in your state.

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