Effects of Reverse Mortgages on Condos and HOAs

Many condominiums and HOAs are filled with units and homes that are financed with bank-held mortgages. Reverse Mortgages are available to home and condo unit owners over the age of 62 who would prefer to draw money from the equity in their home or condo unit. These mortgage owners can either take a lump sum or periodic payments from the equity in their home. The mortgage holder gets paid back when the home is sold or liquidated upon the death of the mortgage owner. The Federal Housing Administration, better known as FHA, is the leading insurer of these mortgages. Banks prefer to offer mortgages to borrowers and real estate that… Read More

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What’s the difference between a bank loan and an HOA loan?

I was recently presented with the following question from one of my clients. I am publishing it here, along with my answer, in hopes of sharing the knowledge. It is a common question that all of us within the HOA lending field should be able to answer. Question: What are some differences between a construction loan or line of credit from a “normal” bank and an HOA loan or line of credit as a specialized lending option? I’m having trouble understanding the pros and cons between them. Answer: The differences are very stark. A construction loan handled by a traditional bank reflects that there is real estate involved. The financing provided might be to construct… Read More

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