How Projects are Typically Funded
The initial steps in funding a project start with a comprehensive
inspection or written proposal from a contractor. Once the cost of the
project is determined, you must then consider ways to fund it. The top
three ways projects are funded include:
• Special assessment. Special assessments, separate from the monthly
assessments, are levied by the board of directors to cover unexpected
expenses. Your governing documents should include the procedures
you must follow to levy special assessments.
• Current and future reserve contributions. Your reserve fund should be
based on the most recent reserve study allocated for improvement
projects, anticipated repairs and renovations. It's not uncommon to
find that issues and unexpected circumstances arise to prevent the
board of directors from keeping the reserve accounts fully funded.
• Association loan. Many HOAs, CIDs, and PUDs use loans and lines of
credit in conjunction with or as an alternative to a special assessment
for unexpected expenses. A loan is collateralized against future
assessments. When an association takes out a loan or line of credit, it
can maximize its profits.
Consider Associa Financial Solutions, Inc. Associa Financial Solutions,
Inc., is an added client service to assist the board of directors in the
loan process. Securing an association loan requires many elements and
attention to details including adhering to lending laws, regulations and
the association's governing documents. Associa Financial Solutions, Inc.
takes on the work to get your loan application approved.
