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How Do HOA Loans Work?
HOA Capital

How Do HOA Loans Work?

When it comes to running a homeowners association, the dues collected are dispersed to specific areas of the property that need upgrades and maintenance. When the costs are beginning to outweigh the stream of funds coming in or the community needs significant renovations, there may be a need to seek an outside source for temporary assistance.

When it comes to HOA loans, you want to have as much information as possible, so HOA Capital is here to help you understand the process.

What Does an HOA Loan Cover?

An HOA loan is traditionally taken out from a lender, which will be a bank in most cases. This form of loan is no different than a traditional one because it needs to be paid back in a certain amount of time with interest. 

In most cases, the association will generally have the funds required to run the corporation, but unforeseen circumstances such as delinquency can strain the budget. Improper practices can also be problematic, so a loan may be required if funds are not set aside for certain expenses.

The loan can be beneficial for much-needed capital improvement projects or help cover extra costs. In addition, because the funds come right away, this can allow any funding that's been reserved to stay available for special circumstances.

What Are the Steps to Apply for an HOA Loan?

To qualify there for an HOA loan, there can be certain documents required, and in some cases, there may be a vote from the other members to approve the decision.

There are a few pieces of information that you will need to have to move forward with an application, and depending on the company you choose, some examples may be:

  • How many housing units are there?
  • How much are the monthly assessments?
  • How many units are occupied?

Once approved, the loan will have a set amount of time to pay back the total, so it is essential to ensure that budgeting is in place for the payments.

HOA Capital: Precision Through Experience

When it comes to applying for an HOA loan, it is imperative that you have a company that understands the logistics of offering HOA lending to create a streamlined process for you.

HOA Capital works hard to offer solutions for our clients that provide an educational experience and HOA loan options to meet our client's needs. We pride ourselves on serving the Eden Prairie area and would love to help you with a free consultation.

If you would like to set up an appointment or have any questions, please give us a call at 952-836-9593 or contact us today.

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