Why choose HOA Loans or Condo Association Loans?
Loans Offer an Alternative to Spending Reserves. The capital outlay for major repairs and improvements can overtax a condo association's reserves, requiring special assessments to pay for specific projects or to rebuild reserves. While special assessments may make economic sense, they also impose financial hardship on members and may be difficult to get approved.
Once approved, the association may have difficulty collecting payments from all its members. Directors may then defer maintenance work - although this can leave them open to charges of negligence, particularly if there are health or safety issues involved. Or, they may try spreading the work out over time - which can raise the final cost of the work, as well as inconvenience residents.
On the other hand, borrowing money for repairs or improvements makes all needed funds available more quickly. And since financing work through a loan generally requires only a small increase in monthly assessments to cover debt servicing, there are fewer objections from homeowners.
Did you know HOA Loans and Condo Association Loans are sometimes referred to as Homeowners Association Loans too?