Community Association Financing
At some point, your community association will need to renovate roads, build fences, or do some unforeseen maintenance on common areas. It may feel like there is always another project your community association needs to take care of. Association fees and reserve funds can help get these projects started but are not always enough to maintain your community association without having to increase homeowner assessment dues. This leaves boards with more problems and less solutions.
One way to overcome these issues is to seek financing, however it can be difficult to find a bank that will issue a fair loan without requiring personal guarantees from board members or collateral liens on property. You could look into non-bank financial institutions that are willing to offer you the funds under acceptable terms, but your association could likely be charged a higher interest rate.
Fair Financing Options
Continental Bank does not commonly demand a high interest rate or restrictive terms and covenants from its association borrowers. Instead, we prefer to use your community association’s future assessment dues as collateral that enables us to simplify the loan structure and give you a competitive rate. After surveying our competition and researching the best options in the industry, we have identified the following banks as reputable options from whom associations nationwide can borrow money: Alliance Association Bank; Mutual of Omaha (acquired by CIT); City National Bank; Union Bank; Pacific Premier Bank; and Seacoast Commerce Bank. Though each of these organizations are impressive sources for community association financing, Continental Bank is confident we can often offer something better. Continental will take on community association loans of any size in a variety of terms and payback options. Other banks often do not accept loans below $50,000 and can be less flexible in their payment options. Continental prides itself on being quick, simple, and fair to work with. While there are some advantages to borrowing from big banks (see our list above), Continental strives to be a more flexible, responsive lending partner because of our small size. After all, we are community owned and managed too.
Value of a Fair Loan to a Community Association
Postponing or completely avoiding necessary renovations may seem like a tempting idea, however it may end up making your community association’s situation much worse. Pushing back needed maintenance and improvements can lead to lack of home value development within the neighborhood, decrease members commitment to the community association, and lead to even more costly complications. Deciding to improve and retain your neighborhood tends to always be in the best interest of your community association. The board’s commitment to benefiting the community association should not be determined by an outside institution that places your organization in a financial box. Getting a loan can be advantageous for community associations. What often determines this is a solid financial plan created by the board and a fair loan that doesn’t hurt the financial stability of the organization. When it comes to seeking outside funding, know that there are more options for community associations than various lenders may lead you to believe.
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