Condo Media - July 2013 - 46
by Wesley K. Blair III
BANKING
Looking for a Loan?
What to Expect
W
ith summer upon us, some
of us will head to the beach,
some to the mountains,
others to the golf course,
and some will just drift to the backyard
for a lazy afternoon. But some of us
(read: condominium association trustees) will be walking around our properties, trying to figure out what needs
repair and improvement and planning
for fall activities.
Small improvements are no problem.
They can be paid for in the ordinary
course of doing business. But what
about addressing rotting siding or failing
porches and decks? These types of repairs
can run into the hundreds of thousands
46
Condo Media • July 2013
of dollars. Ever mindful of the strain
that large special assessments can put on
their fellow unit owners, more and more
trustees are turning to banks to raise the
funds necessary to cover these costs.
Borrowing money and using the
association’s cash flow to secure and
repay the debt can be an easy and
straightforward process if the trustees
and/or the association’s managing
agent know what they are doing and
understand what documentation a
banker needs to make a lending decision. In this article we will try to demystify the borrowing process a bit by
explaining what documentation bankers ask for and why they ask for it. We
will also review commitment letters,
loan documents, and what to expect as
follow-up documentation requirements
after a loan has been funded.
The Application Process
The first piece of documentation we
require is a completed application. It
is usually a simple two- or three-page
document that gives us a snapshot of
the association and its loan request. It
spells out the loan request, including
the amount of the loan and what the
funds will be used for. It also provides
the bank with information regarding
the association’s board of trustees and
its management company, as well as
other professionals whom
trustees may rely on as
they discharge their fiduciary responsibilities such
as attorneys, accountants,
and insurance agents.
Having this information
is helpful if questions arise
as we complete the loan
underwriting process.
Although it sounds
basic, it is imperative
that the trustees of the
association be in agreement to seek financing
for their capital improvement project. If the bank
is going to devote its
resources to processing
a loan for an association,
it wants to know that the
association is committed
to borrowing the money
for the project. In order
to evidence the association’s commitment to the
process, the bank asks
Condo Media - July 2013
Table of Contents for the Digital Edition of Condo Media - July 2013
Condo Media - July 2013
Contents
From the CED’s Desk
President’s Message
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Reserves
Volunteer Spotlight
Vendor Spotlight
Finance
Banking
Operations
2013 CAI-NE Financial-Reserves Directory
Classified Service Directory
Advertisers Index
Condo Media - July 2013 - Condo Media - July 2013
Condo Media - July 2013 - Cover2
Condo Media - July 2013 - Contents
Condo Media - July 2013 - From the CED’s Desk
Condo Media - July 2013 - 3
Condo Media - July 2013 - President’s Message
Condo Media - July 2013 - 5
Condo Media - July 2013 - CAI News
Condo Media - July 2013 - 7
Condo Media - July 2013 - 8
Condo Media - July 2013 - 9
Condo Media - July 2013 - 10
Condo Media - July 2013 - 11
Condo Media - July 2013 - 12
Condo Media - July 2013 - 13
Condo Media - July 2013 - 14
Condo Media - July 2013 - 15
Condo Media - July 2013 - 16
Condo Media - July 2013 - 17
Condo Media - July 2013 - CAI Regional News
Condo Media - July 2013 - 19
Condo Media - July 2013 - 20
Condo Media - July 2013 - 21
Condo Media - July 2013 - Asked & Answered
Condo Media - July 2013 - 23
Condo Media - July 2013 - Homeowner’s Corner
Condo Media - July 2013 - 25
Condo Media - July 2013 - Reserves
Condo Media - July 2013 - 27
Condo Media - July 2013 - 28
Condo Media - July 2013 - 29
Condo Media - July 2013 - Volunteer Spotlight
Condo Media - July 2013 - 31
Condo Media - July 2013 - 32
Condo Media - July 2013 - 33
Condo Media - July 2013 - 34
Condo Media - July 2013 - 35
Condo Media - July 2013 - 36
Condo Media - July 2013 - 37
Condo Media - July 2013 - 38
Condo Media - July 2013 - 39
Condo Media - July 2013 - Vendor Spotlight
Condo Media - July 2013 - 41
Condo Media - July 2013 - Finance
Condo Media - July 2013 - 43
Condo Media - July 2013 - 44
Condo Media - July 2013 - 45
Condo Media - July 2013 - Banking
Condo Media - July 2013 - 47
Condo Media - July 2013 - Operations
Condo Media - July 2013 - 49
Condo Media - July 2013 - 2013 CAI-NE Financial-Reserves Directory
Condo Media - July 2013 - 51
Condo Media - July 2013 - 52
Condo Media - July 2013 - 53
Condo Media - July 2013 - 54
Condo Media - July 2013 - 55
Condo Media - July 2013 - 56
Condo Media - July 2013 - 57
Condo Media - July 2013 - Classified Service Directory
Condo Media - July 2013 - Advertisers Index
Condo Media - July 2013 - 60
Condo Media - July 2013 - 61
Condo Media - July 2013 - 62
Condo Media - July 2013 - 63
Condo Media - July 2013 - 64
Condo Media - July 2013 - Cover3
Condo Media - July 2013 - Cover4
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