what is a hoa loan
An HOA Loan is a loan that a home owner organization enters into with a lender (bank) to typically fund extensive improvements or repairs. The collateral for such a loan is the banks right to the fees and assessments. If the HOA defaults the bank has the right to collect assessments and payments directly from the home homeowners. The bank may not take a lien against property unless the homeowner is in default with fees and the board of the HOA initiates foreclosure due to non payment of fees. In other words, the bank can't place a lien on an individual home unless the HOA would have a right to do so under the CCR's. One big negative regarding HOA Loans is the homeowners fees and assessment go up while the loan proceeds are paid off. Hope this answers your question. All my best & encouragement.