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“Advice on HOA Loans for Small Condo Associations?”

“Dear PoPville,

I own a condo in a 9 unit condo building in DC. The building was built in 2018 by a developer who turned out to be pretty shady, and we’ve discovered a series of escalating issues with the construction. The owners who face one side of the building have had water damage during heavy rainstorms since early on; we got the full amount of the structural defect warranty money placed in bond with the city by the developer (~$50K) to partially re-side that part of the building and do some other work to fix issues with the initial construction.

Now, partway through that project, after the contractor we hired came back with a new, much higher estimate for the original scope of work — we’ve discovered that we most likely need to re-side the entire building,

either now or within the next 5 years or so. The current estimates we have for that work are over $100K — unsurprising in the current construction market, but well outside our healthy but young condo association reserves. A special assessment is obviously an option, but an unappealing one, since it would be large.

We’ve started looking at HOA loans but most banks seem to limit them to condo associations of at least 25 units. Does anyone have any experience with this or know of banks that are willing to lend to smaller HOAs?”

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