What a Bank Loan Can and Cannot Do For Your Association
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The hardest part of running a community association right now is that the bills are getting bigger while the margin for error is getting smaller. Insurance costs keep climbing, buildings are aging, milestone inspections and reserve funding expectations persist, and boards are being asked to approve projects that can cost millions of dollars. So how do you fund critical repairs without triggering financial chaos for owners or inviting fraud and mismanagement?
In this week’s episode of Take It To The Board, host Donna DiMaggio Berger sits down with Meghan Hallinan, Executive Vice President and Managing Director of National HOA and Property Management Banking at BankUnited, to get a lender’s view of community association financing. Donna and Meghan walk through how community association loans really work when there is no physical collateral, why incoming assessments and the community’s financial track record matter so much, and what red flags can stop a deal in its tracks. They also explain why banks look beyond a single project and want to understand your reserve study, your upcoming capital plan, and whether your owners can absorb the budgetary increase.
They also dig into the operational side: draw schedules on construction-style funding, the role of project managers and inspections, and how boards can avoid common breakdowns when leadership changes mid-project. Then Donna and Meghan shift to risk and controls, including the difference between a term loan and a line of credit for HOAs on balanced budgets, how litigation can affect lending decisions, what to know about the Fannie Mae’s “blacklist,” and the fraud prevention tools every association should treat as non-negotiable, including positive pay and ACH controls.
If you serve on a board, manage communities, or advise associations, this conversation will help you build a realistic financing plan and protect your funds at the same time.
Conversation Highlights:
- How banks’ views of community associations have shifted—and what’s driving the change
- What lenders evaluate first—before the numbers even come into play
- The biggest misconceptions boards have about borrowing—and why they matter
- Common deal breakers: delinquencies, underfunded reserves, governance issues, and deferred maintenance
- The Fannie Mae Blacklist explained—and what it really means for your community
- Loan vs. line of credit: how to choose the right financing tool
- Why reserve funding is under increased scrutiny—and how it impacts borrowing
- What a “financially responsible” board looks like from a lender’s perspective
- The most common fraud red flags banks are seeing in community associations
- Internal controls every association should have—and where boards often fall short
- How banks can partner with associations to help prevent fraud
- Non-negotiable best practices to safeguard association funds
- What boards should be doing now to become more attractive borrowers
- The mindset shift every board needs when it comes to financial decision-making
Related Links:
- Podcast: Show Me the Money: Investment Strategies with Michael Coady and Kenny Polcari of Slatestone Wealth
- Online Class: Budgeting & Reserves
- Resource: 5 Ways HOAs Can Prevent Financial Fraud
About Take It To The Board
Think you know what community association life is all about? Think again. Residents must obey the rules, directors must follow the law, and managers must keep it all running smoothly. Take It To The Board explores the reality of life in a condominium, cooperative or homeowners’ association, what’s really involved in serving on its board, and how to maintain that ever-so-delicate balance of being legally compliant and community spirited. Leading community association attorney Donna DiMaggio Berger acknowledges the balancing act without losing her sense of humor as she talks with a variety of association leaders, experts, and vendors about the challenges and benefits of the community association lifestyle.
If you’ve got a question, Take It To The Board with Donna DiMaggio Berger – We Speak Condo & HOA!
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