Question:
Many boards have the need to obtain an HOA loan for critical repairs or capital improvements. The advantage of HOA loans includes the ability to complete improvement processes up front, in an efficient manner. HOA loans also enable homeowners to spread repayment over many years.
So, what is the typical HOA loan process?
The HOA loan process consists of several key steps:
* Identifying the basic HOA loan requirement (amount, repayment preferece, etc...)
* Understaing Board/Homeowner support for the HOA loan
* Submitting basic financial information to bank (3 yrs financials, project details, assessment receivable report)
* Review bank term sheet related to HOA loan
* Provide additional information, obtain loan approval
* Close loan, complete project, and initiate re-payment of HOA loan
The HOA loan process can be as short as 3-4 weeks, but more commonly, the HOA loan process extends over a period of several months since HOA Boards typically meet only on a monthly basis.
For a brief white paper on the HOA loan process, click here.
Note: The term "HOA loan" is utilized, but it is interchangable with "condo association loan".
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