Understanding Loan Documents
When it comes to HOA management, your association may require improvements, resulting in needing to get a loan. Understanding the documents that come with this process is essential because you want to make sure you are making a decision that works for your association. HOA Capital wants to take the guesswork out of it, so we have created this article to help give some clarification on loan documents.
One of the first steps before applying for the loan is understanding the association's governing documents. These documents will list the rules and regulations for how the community will be run, and they are in place for efficiency, structure, and safety for everyone involved.
Reviewing these will help give you a better understanding of how the loan will affect the overall status quo and allow for an appropriate decision for the situation to be remedied.
Double Check the Information
Another consideration is making sure that you are double-checking any of the loan documents that have items like fees, terms, rates, and amortization listed. When you agree to the loan, you have a specific set of requirements that must be met, so making sure they are correct is imperative.
Are there Covenants Associated with the Loan?
In almost every HOA lending scenario, covenants will be placed inside the loan documentation. These covenants are similar to promises representing what will happen if a specific action does not occur. These could be seen as an equitable servitude that comes with the property and will be granted to the HOA members, so understanding them is essential.
Closing the Loan
As you approach closing the loan, there are a few other considerations, including any final items that will be needed from the bank or how the funding will take place. In addition, the documentation also needs to clarify where the funds will go after the loan closes.
Checking with an Attorney
In conclusion, always checking with an attorney is advised. This is because the documents will directly affect the homeowners and the HOA, making them legally bound to what is in the contract, so having a professional thoroughly look at the loan specifics is recommended.
We Offer Precise Solutions and Honest Communication
Getting an HOA loan can help make necessary improvements and upgrades for your association, and understanding the documents can help give you peace of mind knowing you're making the right choices. If you are looking for professional loan services, HOA Capital is here with streamlined solutions to meet our client's needs in Minnesota. We offer assistance with creating a capital improvement plan for our clients and offer HOA loan rates our clients trust.
We want to help you create a living environment that your residents love, so message us online or call us at 952-836-9593 today.