There is no longer one single factor that qualifies or disqualifies a condo
association for obtaining HOA financing (having said this, it is important
to note that owner-occupancy levels continue to be a very strong factor
in most bankers' decision making process).
In the past, a bank would grant a HOA loan with a particular capital
improvement project in mind. Bankers today consider lines of credit for
condominium associations. Again, familiarity has led to greater latitude in looking at how condos manage their finances,
specifically in the areas of borrowing and debt repayment. This is a
distinct advantage to a well run, credit-worthy condo
association. An available line of credit can allow a condo association the
flexibility of developing a long-range plan for property maintenance.
It can also augment a condo association reserves in the event of an
emergency or help even out the monthly cash flow when vendor payments
do not match cash inflows from condo fees.
As more and more bankers discover the strong cash flows which
condo associations represent, competition for these types of loans will
increase. The good news for condo associations is that with
increased competition usually comes better pricing and greater
flexibility in loan terms. All of which can make the trustees' job of
managing their condo association's financial situation easier.
Learn More About HOA Loans and Condo Association Insurance
