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How Do We Qualify For HOA Loans?

Roger Chase on Apr 8, 2009 10:36:00 AM


While some of these items are non-negotiable, HOA lenders have been able to overcome other items with creative HOA loan structuring.

  • The Developer (Declarant) may not be in voting control of the HOA Board and may not have ownership of anything more than 10% of the annual HOA budget.
  • HOA unit owner delinquency rate to the HOA cannot be more than 7% of the total number of units being more than 60 days past due.
  • The minimum number of units per HOA property should be at least 25 units in order for Bank to distribute its risk.
  • Absentee HOA owners should not exceed 40% of the community. Absentee is defined as investor ownership distinguished by a long term lease relationship between an owner and a tenant. There is not intent by the owner to have personal use of the unit.
  • HOA ownership concentrations in their summation should not exceed 30% of all owned units. No one unit owner should have control of over 10% of the units.
  • Proposed budget increase to service the HOA loan should not exceed 100%. In the event it does, the increase should be put in place for a minimum of 4 billing cycles without 60 day delinquencies exceeding 7% of units.


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