Loan Application Instructions
Instructions for Completing an HOA Loan Application
Applying for a Homeowners Association Loan
- Determine the scope of the repair and improvement work and the timetable for completion.
- Determine the estimated project costs.
- Determine who will be the project/construction manager
- Appoint a contact who will work with the Lender (usually the manager)
- Determine the appropriate term for the loan
- Contact the association’s attorney to determine the association’s ability to borrow, pledge assets, and authorization(s) needed to increase assessments or pass a special assessment if required.
- Establish a timetable for informing the members of the project and anticipated borrowing needs.
- Pass a borrowing resolution by the association’s governing documents and the attorney’s directions.
- Pass and levy the special assessment by the association’s governing documents for the amount of the loan plus estimated interest (if a special assessment is required)
- Determine which board members will be authorized to execute (sign) the loan documents and request disbursement(s) for the loan
- Submit the completed application and information on the application checklist.
- After the loan is approved, deliver the opinion letter from the attorney.
- Sign the loan documents.
Homeowners Association Loan Application Checklist
To consider the association’s loan request, the Lender will need the following information:
- Completed loan application
- Loan application fee of $1,000 (which shall be refundable, less Lender expenses, if the Lender declines the loan request, and which shall be applied towards the commitment fee if the Lender approves the loan).
- Copy of the special assessment resolution (including ballot and vote tally) passed by the association membership
- Duly passed Borrowing Resolution (will be provided at loan closing if not available)
- Copy of the Associations current budget and, if available, the proposed budget for the upcoming fiscal year
- Copy of most recent interim and fiscal year-end CPA-prepared financial statements, including Balance Sheet and Income Statement for the last three years.
- Copy of tax returns for the last three years.
- Copy of the association’s most recent Bank or Brokerage Statements
- Copy of the association’s current collection policy
- Assessment Delinquency Report for the most recent three (3) months (please explain any delinquent accounts that fall outside the collection policy)
- Copy of complete Reserve Study in a form acceptable to the Lender. The study must be less than three (3) years old.
- Minutes of the last annual meeting reflecting the election of current directors
- Copy of estimated construction budget
- Recorded copy of the association’s Articles of Incorporation, Declaration of Covenants, and Bylaws, along with any amendments
- Copy of current paid insurance binders for the association’s property, D&O, and liability policies
- Details of litigation, judgments, or settlements (if any) entered into and remaining unsatisfied against the association.
- Details of any non-compliance of any building codes or environmental laws (if any)
- Attorney Opinion Letter (required for closing)
- Signed Construction Contract and Contractor’s Evidence of Insurance (required for closing)
- Evidence of Insurance with the Lender added as the loss payee/ additional insured (required for closing)
Before loan funding and subject to credit approval, the Lender will require an attorney’s opinion letter in form and content satisfactory to the Lender. To avoid delays or problems in securing the association’s attorney’s opinion letter, we recommend the association engage legal counsel early in the borrowing process.
All items listed above must be submitted before the Lender fully considers the loan application. If you have any questions regarding the above materials, please email us at info@commonareacredit.com, and an association loan specialist will be happy to help you.
Homeowners Association Loan Application
All items listed in the table below must be submitted before the lender fully considers the loan application. If you have any questions regarding the materials requested, please email us at info@commonareacredit.com, and a loan specialist will be happy to help you.
The undersigned homeowners association (“Applicant”) hereby certifies that the information contained in this application and any attachments hereto is complete, accurate, and correct and is provided for the exclusive purpose of obtaining the Loan Request on behalf of the Applicant from Common Area Credit Inc. (“Lender”). Applicant agrees that the Lender will be notified of any material change in the information provided in this application, and the Lender is hereby authorized to make whatever inquiries it deems necessary and reasonable in conjunction with verifying the information provided in this application.
The Lender is hereby authorized to disclose any information provided in this application or any attachment hereto regarding the applicant’s financial condition, including but not limited to all financial statements and other information concerning the applicant’s creditworthiness, credit record, and credit standing, to any of applicant’s sureties, or other credit reporters, or creditors, at any time before, during, or following the term of the credit.
