HOA Credit

Started by MichaelK11 • 3 replies • 1821 views

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MichaelK11 (Texas)
Posts: 432

Posted:

Where should an HOA look for best terms on a loan?

Mandatory HOA's in many states may be the most secure and reliable customers a lender could ever find. That's due to legalities that make it difficult or impossible for HOA's to dissolve or declare bankruptcy and also make the member homeowners ultimately responsible for the HOA's obligations with their homes as surety.

That's all based on legalities that aren't worth the effort for most bankers to research, rather than the things they normally look for, such as secured collateral. (We are, after all, a small market for lenders.)

So, could an HOA get better terms by seeking out a loan officer already familiar with these matters, and how could someone go about finding such a loan officer who already works with HOAs?

Thanks in advance for help.

GlenL (Ohio)
Posts: 5,491

Posted:

I would start with our sponsor NCB: http://www.hoatalk.com/tabid/76/Default.aspx?ID=NCB

Studies show that 5 out of 4 people have problems with fractions

MichaelK11 (Texas)
Posts: 432

Posted:

Thanks, Glen. Very helpful.

FYI, NCB currently has a freeze on loans to HOAs, primarily because of market conditions and because that portfolio cannot be sold to other lenders.

However, Kathryn was able to give me invaluable advice about how an HOA can get good (secured) terms from commercial lenders who are not familiar with our market, and what terms NCB could normally offer.

In short, suggest to the underwriter assignment of assessments via a UCC lien on the income stream. (I hope I got the terminology right.)

Also, CAI may provide referrals to lenders who do business with HOAs and seek our business.

JohnM3 (Florida)
Posts: 288

Posted:

Micael: having secured at least 3 loans in the past. Here is my nickels worth: Deal with the bank in your area that deals with lock boxes an HOA loans in the Miami Area deal with banco Popular may have a branch in your city. They brought out in Florida in the following sequences other companies its a great market there only pro visor is the financial condition of the accounts receivables they want a very aggressive policy..............

It started with Sky lake State Bank condos and Hoa,s only they got bought up by Kislak Bank who wanted into the HOA-Condo biz in Florida. Then 4 years in they got wet feet but hired the entire staff of Sky Lake et all then the decided not to be dealing with us an along came banco with billions in assets an they hired the entire staff from SkyLake an instant success. They do lock boxes, commercial cds and best of all loans they helped us rid ourselves of a illegal wall extension, built a entrance monuments built by Walt Disney we are in Miramar Florida 1 block north of the Miami City Line. They loaned us money for a new clubhouse and a 24 stall parking lot an most likely a future series of lots the developer convincied the City fathers to drop from the pud plan 21 years ago...........great people they taught me how to be a good treasurer an I have trained other from there teachings great people. Send me a email at [email protected] an I will send you telephone numbers and names of contact people......lock boxes are a entity that allows your members to mail in directly to your account monies an they run a computer run to your management team company 2 times a month an in our area they do a weekly pickup at our management company for free...they want our business...........many local banks are now trying to get there accounts but they have no expertise in dealing with Condo or HOA folks only Banco...they are in every state in the union an do business across state lines.............

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