Association Loans
How Associations Fund Major Repairs
For Florida condo boards facing SIRS reserve requirements — and DC-area associations facing the same aging-building math.
The law changed
Reserves are mandatory
Florida condominiums 3+ stories must fund structural reserves. Owner waivers have ended.
Financing is expressly permitted
The statute allows funding via assessments, special assessments, loans, or lines of credit. Financing requires approval by a majority of all voting interests.
Boards carry fiduciary duty
A documented competitive process is your protection — proof the board weighed real alternatives.
Special assessment vs. association loan
Illustrative example: $3.5M financed · 7.25% · 15-year amortization · 200 units. Your figures will differ — run yours below.
HOA Loan Calculator
Compare a per-unit monthly loan payment to a one-time special assessment.
Illustrative estimates only — not a quote, rate offer, or commitment. Actual terms depend on lender underwriting.
Three funding paths
Raise assessments
Predictable and simple — but slow to build the reserve; may not meet the repair timeline.
Special assessment
Fast and cheap for the association — but a hardship for owners with fixed budgets.
Loan or line of credit
Spreads cost over 10–20 years — requires owner vote and disciplined budgeting.
Six-step process
- 1EngageWeek 0
- 2PackageWks 1–3
- 3Term sheetsWks 3–6
- 4Board selectsWk 7
- 5Owner voteWks 8–12
- 6Close & fundWks 12–16
What lenders look for
Typically under 5% of units past 60 days.
Current budget, latest audit, and reserve schedule.
Adequate property and liability coverage in force.
Any active litigation and its potential exposure.
Ratio of owner-occupied vs. rented units.
Board minutes, bylaws, and recent voting records.
Frequently asked
Is my unit collateral?
No — the security is an assignment of association assessments. Individual units are not mortgaged.
Do board members personally guarantee the loan?
Not in a standard association loan.
What does this cost the association?
Nothing unless a loan closes. Our fee is typically 1% of the funded loan, paid from proceeds, disclosed upfront.
How long does it take?
Typically 12–16 weeks including the owner vote.
Do owners have to approve?
Yes — a majority of all voting interests is required to finance reserve funding.
Can our current bank participate?
Yes — and competition tends to sharpen their offer.
The Board Member's Guide to Association Loans
A 20-page plain-English guide: SIRS obligations, the math boards ask about most, what lenders want in the package, and a checklist for the owner vote.