Will Our Community Association or Timeshare Qualify for a Loan?

Borrowingisanoption

Many traditional banks are ill-equipped to even accept a loan application from a community association, timeshare, homeowner’s association, or any other commonly owned interest group. While there are a variety of reasons this is true, the reality is that lending to a well-qualified community association, timeshare, homeowner’s association, or any other commonly owned interest group is a sound business practice that our firm has embraced for quite some time.

Qualifying for a community association, timeshare, homeowner’s association, or any other commonly owned interest group loan is really not so different from the way in which a business qualifies for a business loan. The community association, timeshare, homeowner’s association, or any other commonly owned interest group needs to show an ability to repay the loan and demonstrate that it has the credentials to seek the loan on behalf of its members. Other factors, such as creditworthiness, length of time incorporated, size and value of property, etc. go into the final determination but, for the most part, there is a lending solution for every community association, timeshare, homeowner’s association, or any other commonly owned interest group.

Are you ready to secure your community association, timeshare, homeowner’s association, or any other commonly owned interest group loan? Simply fill out our contact form and one of our experts will be in touch to discuss your community’s qualifications.

Questions and Answers about HOA and Condominium Association Loans

article_6_lg

Is an HOA Loan or Condominium Association Loan the same as a Mortgage?

Not even close. A mortgage is typically offered to an individual property buyer and is secured by the lender taking an interest in the real estate being procured with the mortgage. An HOA loan or condominium association loan is much more like a business loan or even a municipal loan. The HOA loan or condominium association loan is secured with future cash flow produced by common fees from the condominium association. Also, the HOA loan or condominium association loan lender protects its interest by reserving the right to assess the HOA or condominium association should it get behind on servicing the loan.

Why would an HOA or condominium association need an HOA loan or condominium association loan?

Any project that requires a large outlay of initial funds can cause the need for an HOA loan or condominium association loan. The most common reason an HOA or condominium association would seek a loan is to perform capital repairs and improvements to buildings and common areas. Common examples of this type of HOA loan or condominium association loan include replacement of a roof or replacing or repairing driveway asphalt.

Another common reason for an HOA or condominium association to seek a loan is to fund litigation against developers and building material manufacturers. Construction defect litigation has grown tremendously over the past few years and, as you might expect, can be rather costly upfront. The process of extended litigation routinely takes years to resolve. An HOA loan or condominium association loan provides the capital to get through the process without burdening community members with the immediate costs.

Will HOALendingSolutions.com lend money to my condominium association?

HOALendingSolutions.com is in the business of lending money to condominium associations like yours. We are very specialized in this form of lending so we are in a position to help you get the money your condominium association needs. Our lending professionals deal exclusively with condominium associations so we already understand the special challenges faced by Property Managers, Board Members, Condominium Association Presidents, and all of the other folks that live and work in condominium associations.

Once my HOA or condominium association applies for a loan, how long before the money is available?

There are many factors that determine the exact time to process an HOA or condominium association loan. However, experience has shown that most HOAs or condominium associations will require one to three months to complete the necessary tasks of providing financial data, seeking legal counsel on the legal ability of the HOA or condominium association to borrow money and assign future common fees to the lender, and for an opinion on the HOA’s or condominium association’s overall fiscal well-being and its creditworthiness. The good news is that HOALendingSolutions.com will assist you with every step of the process. Fill out our simple loan application form today to get the money your HOA or condominium association needs for tomorrow.

Is an HOA Loan or Condominium Association Loan the same as a Mortgage?

Not even close. A mortgage is typically offered to an individual property buyer and is secured by the lender taking an interest in the real estate being procured with the mortgage. An HOA loan or condominium association loan is much more like a business loan or even a municipal loan. The HOA loan or condominium association loan is secured with future cash flow produced by common fees from the condominium association. Also, the HOA loan or condominium association loan lender protects its interest by reserving the right to assess the HOA or condominium association should it get behind on servicing the loan.

Why would an HOA or condominium association need an HOA loan or condominium association loan?

Any project that requires a large outlay of initial funds can cause the need for an HOA loan or condominium association loan. The most common reason an HOA or condominium association would seek a loan is to perform capital repairs and improvements to buildings and common areas. Common examples of this type of HOA loan or condominium association loan include replacement of a roof or replacing or repairing driveway asphalt.

Another common reason for an HOA or condominium association to seek a loan is to fund litigation against developers and building material manufacturers. Construction defect litigation has grown tremendously over the past few years and, as you might expect, can be rather costly upfront. The process of extended litigation routinely takes years to resolve. An HOA loan or condominium association loan provides the capital to get through the process without burdening community members with the immediate costs.

Will HOALendingSolutions.com lend money to my condominium association?

HOALendingSolutions.com is in the business of lending money to condominium associations like yours. We are very specialized in this form of lending so we are in a position to help you get the money your condominium association needs. Our lending professionals deal exclusively with condominium associations so we already understand the special challenges faced by Property Managers, Board Members, Condominium Association Presidents, and all of the other folks that live and work in condominium associations.

Once my HOA or condominium association applies for a loan, how long before the money is available?

There are many factors that determine the exact time to process an HOA or condominium association loan. However, experience has shown that most HOAs or condominium associations will require one to three months to complete the necessary tasks of providing financial data, seeking legal counsel on the legal ability of the HOA or condominium association to borrow money and assign future common fees to the lender, and for an opinion on the HOA’s or condominium association’s overall fiscal well-being and its creditworthiness. The good news is that HOALendingSolutions.com will assist you with every step of the process. Fill out our simple loan application form today to get the money your HOA or condominium association needs for tomorrow.

Does Your Business Specialize in Lending to Condominium Associations?

article_5_lg

That’s a question we get a lot. Believe it or not, lending to Condominium Associations and other common interest communities is our ONLY business. In the United States alone, Condominium Associations and other commonly owned properties make up more than 20% of the value of all residential real estate. There is more than 40 billion dollars spent annually on operating revenue. And the numbers are actually increasing. We think that is a market worth selling and servicing to.

The largest challenge facing this evolving industry is the lack of dedicated and specialized financial service professionals to service the growing demand for lending to Condominium Associations and other common interest communities. That is where we come in. We have seen the future of Condominium Associations like yours and we know that you will need lending solutions that are as unique as your community. Simply fill out our contact form and one of our experts will be in touch to discuss your Condominium Association’s Lending needs.

Condominium Association and HOA Loan Challenges

article_7_lg

Condominium associations and HOAs are charged with the duty to collect common fees on a regular, usually monthly, basis. Included in these common fees are funds set aside for future expenses of the condominium association or HOA. These funds are generally said to be “in reserve” and are commonly referred to as “reserve funds”. The specific use of these monies is to maintain and upgrade the common areas of the condominium association or HOA. Condominium associations and HOAs are routinely chock full of commonly owned elements. Among the more common are pavements, roofs, decks, building exteriors, amenities like swimming pools and tennis courts, club houses, commonly owned landscaped areas, and parks. In theory, keeping enough funds in reserve means that there is money available to maintain and repair these common elements, either on a prepared schedule or as they fall into disrepair.

Unfortunately, most condominium associations and HOAs do not hold enough funds in reserve to do this properly. One recent estimate indicated that as many as 90 percent of all condominium associations lack sufficient reserve funds to handle these repairs and replacements. If you find your condominium association or HOA needs to borrow money to handle repairs, maintenance, or legal issues, clearly you are not alone. HOA Lending Solutions was formed to supply condominium associations and HOAs with the needed capital to supplement the reserve funds of typical condominium associations and HOAs.

In a typical commercial loan, collateral is required for the lender to even consider the loan. Since condominium associations and HOAs do not typically have collateral, lenders look to legal right of the condominium association or HOA to levy condominium unit owners or HOA residents. These levies come in the form of assessments and/or monthly condominium or HOA fees. This is why it is so critical that a condominium association or HOA keep easy to read and easy to understand financial records. These financial records will be reviewed as part of the lending process.

Because condominium associations and HOAs are run by elected volunteers who routinely change seats, the loan is made to the condominium association or HOA rather than to the Board of Directors. For this reason, the legal documents are also of great importance and impact every unit owner within the condominium association or HOA.