FHA Approval Can Raise Property Values…Don’t let Condo Delinquencies Stand in the Way

FHA Approval Can Raise Property Values…Don’t let Condo Delinquencies Hurt

Despite all the lovely roads and fire trucks we encounter every day, people still like to complain that their taxes aren’t being put to good use. It would seem they’ve never heard of an FHA loan. These aren’t mortgages issued by the Federal Housing Authority, rather ones insured by them. This insurance enables the lender to offer terms with significantly reduced down-payments, sometimes as low as 3.5% of the purchase price. And while the program explicitly exists to aid home buyers and not investors, it can still provide a significant boost to property values.  FHA approval is critical so don’t let condo delinquencies hurt you. If a building has FHA approval, the… Read More

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Will Our Community Association or Timeshare Qualify for a Loan?

Many traditional banks are ill-equipped to even accept a loan application from a community association, timeshare, homeowner’s association, or any other commonly owned interest group. While there are a variety of reasons that this is true, the reality is that lending to a well-qualified community association, timeshare, homeowner’s association, or any other commonly owned interest group is a sound business practice that led to the creation of HOALendingXchange. Qualifying for a community association, timeshare, homeowner’s association, or any other commonly owned interest group loan is really not so different from the way in which a business qualifies for a business loan. The community association, timeshare, homeowner’s association, or any other commonly… Read More

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A Loan for Your Community Association – Some Real World Mechanics

As we head into budget season it is time to think about where all the money for all of the maintenance and capital improvements is going to come from. A primary activity of operating a community association is planning for the repair and maintenance of the property and budgeting for those large cost capital improvements that will be demanded. I am a major proponent of having a Reserve Study performed and updated at least every 3 years. I further believe that community associations should be required by regulation to properly fund themselves based on that Reserve Study. Of course, that is a utopian concept that rarely exists in the real… Read More

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HOA Loan Structures & Long Term Budget Shortfalls

HOALendingXchange.comhas made financing for community association capital maintenance needs easily accessible.  Financial institutions that are truly skilled in serving this unique industry can be particularly flexible to the differing needs of each community. Not only does each association have a unique culture but the projects all need to be approached in a tailor-made fashion to suit what they desire to have accomplished.  The financing available is typically low cost because the transactions are acknowledged to be of low risk and the associations often provide the institutions with deposits that allow for buying down the interest rate or loan fees. The one aspect that permeates the vast majority of all communities… Read More

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Does Your Business Specialize in Lending to Condominium Associations?

That’s a question we get a lot. Believe it or not, lending to Condominium Associations and other common interest communities is our ONLY business. In the United States alone, Condominium Associations and other commonly owned properties make up more than 20% of the value of all residential real estate. There is more than 40 billion dollars spent annually on operating revenue. And the numbers are actually increasing. We think that is a market worth selling and servicing to. The largest challenge facing this evolving industry is the lack of dedicated and specialized financial service professionals to service the growing demand for lending to Condominium Associations and other common interest communities.… Read More

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A Bright Future for Solar Energy in HOAs

According to the Institute for Energy Research, slightly less than 1% of U.S. electricity production comes from solar energy. However, as the industry gets more efficient at producing high quality, affordable solar panels, many HOAs are taking note at how this technology can save money, and in some cases, actually create an income stream. Not surprisingly, Florida (the Sunshine State) has enacted laws that allow for homeowners to install solar collectors. Even if the HOA has rules to the contrary, the state law trumps those rules and sets the stage for HOA members to jump on the solar band wagon. While the initial cost of installation can be high, solar… Read More

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The Future of HOA Lending

The advance of technology and social media have allowed technology-based entities such as Lending Tree, Prosper, Lending Club and other so-called “Fin-Tech” companies to all but destroy the traditional bank lending model. These high-tech bank alternatives often give borrowers more affordable, desirable, and easy to obtain methods to borrow money, pay off debt, and more. They further add the element of convenience by putting their resources at the fingertips of anyone with access to a smartphone, tablet, or computer. Meanwhile, condominium associations, cooperatives, timeshares, and other HOAs seeking loans have had to rely on the “old-fashioned” bank lending model to obtain HOA loans. It no longer makes sense to simply rely on the bank where you deposit… Read More

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Storm & Catastrophic Preparation – An Emergency Line of Credit

We are in an age of dramatically more devastating natural events: frequent and expansive wild fires, intense hurricanes, stronger tornadoes and historic rains/snowfall resulting in record flooding. As never before, establishing catastrophe planning strategies supported by adequate insurance coverage is a critical element to restoring the facilities impacted. There is a banking program specific to community associations that is particularly valuable for the environmental changes being experienced. The program has traditionally been referred to as a “Standby Line of Credit for Named Storm Damage”. The reason such a bank facility becomes valuable has largely to do with expediency and unforeseen dilemmas with insurance coverage. The general description of such a… Read More

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Building Components: Technological Advancements Make Upgrades Worthwhile

With technology advancements, replacing worn elements may be less effective than upgrading to new materials. For instance, wooden decks may look fantastic at a shore side condominium complex. It’s too bad they need to be replaced every 10 years. They just don’t hold up to the elements. Until recently, using wood to replace wood may have been the only option. Now, it is not uncommon for modern materials like plastics, amalgamations, and even recycled products like rubber from tires to be used to offer beautiful options with the benefit of longer life and lower cost of ownership. There was a time when most condominiums were referred to as “brick and… Read More

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Delinquency and the HOA

The timely collection of fees and assessments is the lifeblood of any HOA, condominium association, co-operative, or timeshare. However, unit owners are not always able to pay their fees and assessments on time. Depending on the state you live in and the penalties for late payments ascribed in the governing documents, delinquency is handled in one a few different methods. This article describes some of the best practices common interest community associations can use to keep their delinquencies to a minimum and their collection efforts on track to keep the revenue flowing while the delinquency is remedied. Most HOAs have rules about when payments are late and what steps the… Read More

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