Definition
An association loan is financing extended to a homeowners or condo association, repaid from assessments, that funds major capital projects without requiring owners to pay the full cost up front.
Why It Matters Financially
An association loan lets a community complete urgent work immediately and spread the cost over years instead of imposing a large lump-sum special assessment. This is often the difference between fixing a problem now and deferring it into something worse.
Example Use Case
Facing a failing roof and insufficient reserves, a board secures an association loan to fund the replacement and repays it through manageable monthly assessments.
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Related Terms
HOA Loan, Special Assessment, Reserve Fund, Assessment, Underwriting