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MissyS
(Florida)

Posts:48

07/23/2008 10:05 PM
We have several large projects that need to be done and we just don’t have the funds. I checked out CRB Financing Solution on this site and it sounds like it could be the answer. Has anyone gotten financing to help with major projects, and if so can you give me some pointers.

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Posts:490

07/24/2008 6:24 AM
Did you check with our sponsor, NCB?

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Posts:490

07/24/2008 6:25 AM
FYI: Click Here for NCB's contact info

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JohnK3
(Pennsylvania)

Posts:565

07/24/2008 9:20 AM
We're not seeking a loan, but I have a general question: If an HOA gets a loan, what would it typically be secured with? Future dues and assessmnets? Amenities (for example, a clubhouse)? Real Property? Something else, or nothing at all? Just curious.

MaryA1
(Arizona)

Posts:2498

07/24/2008 9:26 AM
I've heard that if an HOA defaults on a loan, ALL the members of the assn are liable for the debt. If this is true, then I hope the board would really be careful with their decison to obtain a loan. Also, better check with the gov. docs. to make certain the board does indeed have the authorization to enter into a loan.

JohnK3
(Pennsylvania)

Posts:565

07/24/2008 10:19 AM
Mary, A look at our ByLaws reveals the Board can borrow up to $20K on its own; any higher requires a unanimous vote by Membership. Also, it indicates HOs would be on the hook for non-payment, as they state if an HO has a lien filed against their property by a Lender of the HOA, the HO can discharge it by paying an amount equal to their ownership % in the common areas (in our case, that would be 4.76% of the debt). You learn somethng every day, eh?

GeraldT4

Posts:934

07/24/2008 11:24 AM
MissyS - Are these projects capital improvements or are they repair and or replacement of common elements?

MissyS
(Florida)

Posts:48

07/24/2008 1:04 PM
We need to have the perimeter fencing replaced at a cost of $75,000. Made a couple of calls and it appears our delinquent account percentages is too high. We have a handful of owners who are thousands behind and are going into foreclosure. Just those few owners dumps us from 4% to 12%. With the economy the way it is right now, a special assessment is going to be a hard sell, and we just don't have the money in the reserve.

KirkW1
(Texas)

Posts:1190

07/24/2008 2:44 PM
You should look for other ways such as volunteer labor. But if each home owns 4.7% then my calculation shows you only have 21 homes. And the price seems pretty high for that number of homes. Another thing to consider is can you simply remove the problem fence and not have one? It would be cheaper then replacement.

MaryA1
(Arizona)

Posts:2498

07/24/2008 3:25 PM
Posted By JohnK3 on 07/24/2008 10:19 AM Mary, A look at our ByLaws reveals the Board can borrow up to $20K on its own; any higher requires a unanimous vote by Membership. Also, it indicates HOs would be on the hook for non-payment, as they state if an HO has a lien filed against their property by a Lender of the HOA, the HO can discharge it by paying an amount equal to their ownership % in the common areas (in our case, that would be 4.76% of the debt). You learn somethng every day, eh? John, Do you live in a condo? I live in a planned community and have absolutely no ownership interest in the common areas -- they are owned solely by the assn. The only provision I could find in my CCRs is this one: "the assn land shall not be mortgaged, transferred, dedicated or encumbered w/o the affirmative vote or written constent of the owners representing at least 2/3's of the votes entitled to be cast by the members of the assn." No mention of what happens if the assn defaults. Do you know if an owner in a planned community would also be liable for default of the assn's loan? Perhaps this only applies to condo assn's???

MissyS
(Florida)

Posts:48

07/24/2008 6:08 PM
KirkW1,I can understand your confusion since I didn’t make myself clear. The percentage criteria that most lending companies require the association’s delinquent assessments can’t be more than 5% of the budgeted gross annual income.

JohnK3
(Pennsylvania)

Posts:565

07/25/2008 9:00 AM
Kirk, I'm the one with the 21 units, not Missy. Good point on possibly removing the fence, though, if there are no prohibitions for doing same. Mary, We're a planned community. And I miswrote on the trigger, which is not ownership of the common areas, but ownership interest in the Association. Still 4.76% liability, under any calculation, according to the ByLaws. Though I don't know how that becomes binding on the Lender, unless it was included in the loan agreement.

MaryA1
(Arizona)

Posts:2498

07/25/2008 12:15 PM
Posted By JohnK3 on 07/25/2008 9:00 AM Kirk, I'm the one with the 21 units, not Missy. Good point on possibly removing the fence, though, if there are no prohibitions for doing same. Mary, We're a planned community. And I miswrote on the trigger, which is not ownership of the common areas, but ownership interest in the Association. Still 4.76% liability, under any calculation, according to the ByLaws. Though I don't know how that becomes binding on the Lender, unless it was included in the loan agreement. John, Thx for the clarification. Guess I was right in my original thought that even members in planned communities would be liable.

MaryA1
(Arizona)

Posts:2498

07/25/2008 12:16 PM
Posted By JohnK3 on 07/25/2008 9:00 AM Kirk, I'm the one with the 21 units, not Missy. Good point on possibly removing the fence, though, if there are no prohibitions for doing same. Mary, We're a planned community. And I miswrote on the trigger, which is not ownership of the common areas, but ownership interest in the Association. Still 4.76% liability, under any calculation, according to the ByLaws. Though I don't know how that becomes binding on the Lender, unless it was included in the loan agreement.

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