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How Long Does the HOA Loan Process Take?
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How Long Does the HOA Loan Process Take?

HOA loans offer immediate funding that can be used as a resource to help with repairs, renovations, and capital improvements in your association. They don't require waiting, and it avoids needing the homeowners to come up with a large amount of money immediately to address the association's needs.

HOA Capital is a leading HOA lending resource, so let's break down the loan process and how long it can take.

How Can HOA Loan Money Be Used?

There are several scenarios where the loan can be used, including repair of structural problems, common area improvements, or any unexpected expenses.

The HOA loan can also be used to pay the annual insurance premiums, and all needed improvements can be performed quickly at current prices.

What are the Lender Requirements?

Not every lender is going to be the same, but there are a few standard documents they will need to receive, including:

  • The number of units and how many are owner occupied vs second homes or rental properties
  • If monthly assessments are going to be increased to compensate for the loan, or a special assessment is going to be passed
  • If there are any delinquencies and how much is owed
  • What the cash flow of the HOA looks like, and how long they plan to repay the loan

What Costs Can Arise With the Loan?

Every lender and request type will be different, but there are a few possible fees:

  • Interest (over the life of the loan)
  • Recording Fees
  • Origination Fee
  • Attorney's Fees
  • Closing costs
  • Cost of supporting documents

How Long Is the HOA Loan Process?

The process has several steps; On average, it will take anywhere from 1 month to 6 months. This will depend on varying factors such as, regulations, Board’s ability to make decisions at the meetings, special meetings, homeowner votes, etc.

Consider a few things that can alter the timing..

Whether membership approval is required by the governing documents.

These can include an association map and rights of access for easements, as well as:

  • A declaration that lists restrictions, conditions, and covenants for property improvement rules and assessments
  • The articles of incorporation
  • Any bylaws on how the HOA is run
  • Board adopted policies to enhance provisions and any other documents

Whether a special assessment is required.

This is a designated amount of money that all owners in the association will pay for the needed improvements.

The lender may require membership approval.

The approval can range from the authority to obtain a loan to any special requirements or qualifications needed by the association.

Expert HOA Lending Through Streamlined Solutions

Issues can arise without notice, especially when you have an association to run. Between capital improvement projects and repairs, it can be a confusing and frustrating experience, which is why HOA Capital is your trusted source for lending solutions.

Our team wants your HOA to be successful, whether that means a new HOA clubhouse or needed repairs. Working with our lending team can help make that happen!

Having a well-thought-out plan to fund your association's needs is our specialty, so call us at 952-836-9593 or message us online today.

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