While we all hope that association reserve funds are sufficient to take care of any needed repairs/replacements that is often not the case. Many reasons for unexpected expenses include extended damage beyond originally expected, city building code updates, and upgrades. Heritage Bank of Commerce also lends for major solar or other energy efficient projects.
If there are insufficient funds in the reserve account, a bank loan could be a solution. Loans act as a bridge to allow the association to move forward while some of the owners use a payment plan to pay their special assessments to the association over the course of the loan.
The good news for the associations: the Bank will not record a lien on any of the association’s property; however, the association may choose to file voluntary liens against those owners needing a payment plan.
By getting your planned projects done now, rather than later, the association could save on costs related to unexpected property damage, which will improve everyone’s overall property value.
Heritage Bank of Commerce has a loan program designed specifically for Homeowner Associations. If your associations are planning a loan in the future, give us a call – it is always a good idea to start early so when you are ready to sign a contract, funding will be in place reducing possible increased costs due to potential increases in damage.
Tune in next month to learn more about the actual process and what Heritage Bank of Commerce needs to approve your loan.
Reprinted from the HOA Newsletter
Heritage Bank of Commerce