Why HOA Loans Are More Manageable Than Special Assessments
Anyone who resides in an HOA community will have dues they are required to pay. The fees cover operating costs and renovations, but there are some scenarios when there isn't enough funding for unexpected projects. HOA Capital is your local expert, and we understand that a loan can be more manageable than a special assessment, and here's why.
What are Special Assessments?
Special assessments are nothing new for communities, and the need to utilize them rises periodically, especially if there's an emergency or disaster. Special assessments are an extra fee that the association charges the homeowners in case there isn't enough funding for the repair that needs to be resolved.
There are many reasons why a funding shortage can occur, including:
- Improper calculation of expenses
- Default of homeowners on monthly dues
- Unexpected repairs from natural disasters not covered by insurance
- Upgrades or replacements for amenities
Typically, the monthly dues to cover these issues will be budgeted by the board, but without enough funding, a special assessment will happen sporadically. This means the homeowners won't be expecting the additional charges, which can cause them extra financial strain and stress. And without the funding, the result is that the damage or renovation will not be repaired, which can affect the value and operations of the association.
How is an HOA Loan a More Manageable Option?
The alternative to a special assessment is an HOA loan. This means you will receive quick funding, support in lowering the homeowner dues, and help the board run more effectively. The special assessment will also immediately impact the finances and homeowners, which is why the loan is considered a better option, especially if the budget is severely underfunded.
One of the biggest reasons why an HOA loan is more manageable than a special assessment is because the money can be paid back over the years instead of having to come up with a large sum immediately. The loan helps decrease the structural gaps in the operations and keeps the community running smoothly and attractive to new homeowners. Understanding the best choice depends on the project, and if it is a sizable investment that requires thousands of dollars, it may be wiser to choose a loan.
Serving Our Clients Through Expert Services and Education
When disaster strikes, you need funding to help keep your homeowners happy and your property in the best condition possible. One of the biggest benefits of working with HOA Capital is our experience and efficiency in streamlined options in Minnesota. So, whether you want to invest in an HOA clubhouse or need HOA maintenance, our team of experts is here to help you.
We can customize a loan to fit your needs by scheduling an expert consultation, so contact us online or call us at 952-836-9593 today.