A Condo Association loan or HOA loan can be approved rapidly once the loan application is received in full. When a condo association loan or HOA loan is approved, the commitment letter from the bank will be sent to the Association Board, Property Manager and Attorneys. The Condo Association or HOA must be in compliance with their governing documents as well as the state laws. This may require certain votes and possibly amending the declaration.  

A Condo Association or HOA can save time by consulting with their attorney at the beginning of the HOA loan process.

After this stage is complete, the condo association loan or HOA loan will close as quickly as the attorneys act. This may require persistence on both the borrower and bank's part. Lastly, once the condo association loan or HOA loan is closed, the Association may submit their request for advances, supported by invoices, to obtain funds to pay for the project.

HOA Loan Rates

1. Interest rates are set based on a spread above U.S. Treasury Rates or Wall Street Journal Prime Rate. Rates are negotiated.
2. During the Condo Association credit line period or HOA credit line period (project build out phase), interest rate floats with the Prime Rate as an Index.
3. During the period of principal pay down, the interest rate can be fixed for different increments of time.
4. Rates are negotiated based on risk, relationship and compensating balances provided (if any).

HOA Loan Collateral (How loan is secured)

1. Assignment of Association or HOA Common Charges/Assessments. (Please Review the details of this with your counsel.)
2. No personal guarantees.
3. No liens on individual units.
4. If the condo association loan or HOA loan request is to purchase real estate, a mortgage lien may be requested.
5. In some circumstances, a pledge of some amount of cash balances may be requested.