HOA Loan Banks for Illinois

We've never taken out a loan, but I would start with talking to the HOA's bank to see what's involved. Like any other bank loan, they'll want to take a look at your financials, so you need to be sure they're on point. For instance, if you have a high delinquency rate, that could affect your ability to get a loan because your cash flow may not be consistent enough to pay regular bills, fund reserves and pay a loan with interest. You might also check the Community Association Institute's website - some of their corporate members are banks who specialize in HOAs, and they may have a branch in your community.

Has your board considered a special assessment instead of a loan? Before going the loan route, has the Board considered a special assessment? Those aren't fun either (they will require a homeowner vote), but if you prepare your argument carefully, show homeowners the numbers and what's at stake, along with holding a special meeting (or two, maybe three) where people can ask questions, that may work out better than getting a loan.

If you do have to take out a loan, that may be due to your not having a reserves fund at all or it's severely underfunded. Regardless of how this ends, be sure you get a reserve study if you don't have a current one (you should be getting them done every 5 years) and begin to use it to set your budget. Hopefully, that'll prevent you from having to consider a loan in the future.

I believe the last study has been done about 3 years ago. The reserves can not cover the entire project.

I agree.

One HOA I was in took out a large loan with a bank and each owner was assessed a specific amount with several options to pay it off. Basically the options to each owner were pay it all now with no interest of finance it with the bank over a period of years (5 at the most) with interest. The HOA got their money up front from the bank.

You are going to need to do a rather substantial special assessment. No bank that I know of will loan to a HOA of your size. Not enough collateral.

I think we're going to need to raise 50k, which is obviously tough to come up with as it's 5k for the smaller units and 10k for the 2 larger units. It's just upsetting because we had a decent amount of reserves with 40k and just had to spend 30k of that on an unexpected repair, which they found additional damage.

We're sitting on the 10k remaining after the repair and I'm looking for any alternative to raise for people who may not be able to afford a special assessment at the moment.

Any ideas from the community?

SBA Loans have a minimum of 25 units.

Thanks, I wouldn't have noticed!