Lending Options

In short:  Immediate funding enables you to meet legal deadlines, avoid penalties, and protect the safety and financial health of your Association community.

1. IMMEDIATE ACCESS TO FUNDS

• Accelerated Repairs / Projects:  Loans allow the Association to start critical repairs or improvements immediately rather than waiting months or years to collect funds through special assessments.

2. IMMEDIATE FUNDING HELPS YOU TO COMPLY WITH FLORIDA LAWS

• Prevents Fines, Legal Action, and Insurance Issues
  • New structural safety and reserve funding laws require timely upgrades and inspections.  A loan ensures compliance without delay.
  • Failing to comply can lead to regulatory penalties, lawsuits, and loss of insurance coverage.
  • Having funds on hand ensures deadlines are met and risks are minimized. 

• Protects Unit Owners and Board Members from Liability
  • Delayed compliance can result in personal liability for the Board, and puts owners’ property values and safety at risk.
  • Acting quickly with funding shows good faith and fiduciary responsibility.

• Milestone Inspections (SB 4-D / SB 154)
  • Florida now requires structural inspections at 30 years (or 25 years near the coast), and every 10 years after.
  • Immediate funding ensures you can hire engineers and complete these inspections on time.

• Structural Integrity Reserve Studies (SIRS)
  • Condos 3 stories or higher must have completed a SIRS by December 31, 2024 and begin fully funding reserves in 2025.
  • Without funding, you can’t hire professionals or meet reserve targets, leading to non-compliance.

• Avoids Special Assessment Delays
  • Special assessments can take months to approve and collect.
  • A loan or line of credit provides immediate capital to start work while owners pay over time.

3. AVOIDS OWNER FINANCIAL HARDSHIP

• Spreads Costs Over Time:  Instead of requiring lump-sum payments from unit owners (which can be thousands of dollars), the loan allows for manageable monthly increases in dues.
• Reduces Risk of Delinquencies:  Fewer owners fall behind on payments when the financial burden is spread out, protecting the Association’s cash flow.

4. PRESERVES PROPERTY VALUE

• Prevents Deferred Maintenance:  Delaying necessary repairs often leads to worsening conditions and higher costs later, while also impacting property values.
• Improves Marketability:  Well-maintained buildings with updated infrastructure are more attractive to Buyers and more likely to pass inspections.

5. MAY OFFER BETTER TERMS THAN OWNER FINANCING

• Competitive Interest Rates:  Lenders who specialize in HOA / Association Loans often offer favorable terms compared to what individual owners might secure on their own.
• Non-Recourse to Owners:  These loans are typically non-recourse to individual owners and are repaid through Association Assessments.

6. ENHANCES FINANCIAL STABILITY

• Builds Reserve Funds:  Associations can use loans to bridge the gap while reserve funds are rebuilt to legally required levels.
• Avoids Emergency Assessments:  Reduces the need for panic assessments that catch owners off guard.

7. INCREASES BOARD CREDIBILITY

• Shows Proactive Management:  Taking a loan to complete needed projects demonstrates responsibility and transparency, which builds trust with owners and potential Buyers.