Condominium Corporation Loans

What is a Condominium Corporation loan?

Referred to as Condo Corporation financing, Strata Corp financing or a Condo Corp Loan. A Condominium Corporation Loan is used to help condominium corporations finance repairs and cover unexpected costs. Receiving a loan can be a great option for the corporation to consider when faced with these challenges. Receiving a loan allows the corporation to keep a healthy reserve fund and avoid a special assessment from being levied to the unit owners.

What are the Benefits for the Condo Corporation?

  • Preserves existing reserve fund
  • Expedites necessary repairs, rather than delaying projects until unit owners are able to provide funds for special assessments
  • Allows the cost of major projects to be spread over an extended period
  • Amortizing the loan over 5 to 20 years will help to keep the reserve plentiful and condo finances in good shape.
  • This solution generally maintains or increases the equity value of the property and condo financials.

What are the Benefits for Condo Unit Owners?

  • No need for owners to deplete personal savings/investments or seek personal loans
  • Retain resale value
  • Helps future buyers with mortgage financing
  • Easy monthly payments
  • Avoid additional debts reporting on your credit report
  • Avoid credit applications and credit inquiries
  • Avoid an unnecessary visit to the bank
  • Avoid arranging a new mortgage or increasing current mortgage financing
  • Avoid another registration on your title

Why would a Condominium Corporation need or want financing?

Financing is often required when repairs are required on the common property and there is not enough in the reserve fund to cover the costs of the upcoming repairs or project. This is typical of older properties that require larger repair projects such as exterior, mechanical, or structural items that are no longer in working order and require upgrading. This is also common in newer properties that require corrections to construction deficiencies.

Are Condominium Boards required to repair common property?

Yes, Condo Boards are required by law to repair common property when necessary and cannot refrain from completing necessary work. If they currently do not have the money the Condo Boards along with the Property Managers would have to approve a special assessment, which then passes the costs along to unit owners individually responsible for their share of the assessment.

Instead of undertaking this option, we can provide condo corporation financing. This is generally the best solution to eliminate a special assessment and make the owners pay a large lump sum of money.

What are the difficulties associated with Special Assessments?

There is a strong possibility some of the owners cannot obtain the funds within the timelines of the special assessment. This can negatively impact the ability of the Condo Board to complete repairs as the full amount of funds are not readily available to cover the costs due. Borrowing through the Condominium Corporation offers immediate relief for Condo Boards and owners. This relieves the stress for the condo board and the unit owners alike, who would otherwise be unable to raise the funds required. Readily available funds also means the required repairs can be completed in a timely manner, independent of the individual unit owner’s financial situations.

How does Condo Corporation Financing work?

Condominium corporation financing is a loan that is placed against the corporation itself. The mortgage brokerage will present a funding request package to our approved lenders. This package usually contains, but is not limited to the following Condominium Corporation documents:

  • Year-end financials
  • 2 years of audited financials
  • Corporation Bylaws
  • Meeting minutes
  • Financial Proforma
  • Architectural plans and Construction Budget

How long does the process take?

The financing process takes about 2 months to complete. Once the loan is approved by the lender, the condo’s lawyer reviews and presents the package to the condo board for final review and signing.

When will the Condo Corporation receive the funds?

Once the loan has been signed off on, funds are either dispersed right away or in multiple stages depending on the situation.

Why should the Condo Corporation use a broker?

A major hurdle facing a Condo Board, unit owners or their Property Manager is finding a proper borrowing solution. Most of the major banks and financial institutions in Canada are unwilling or unable to provide this lending due to the simple fact that common property cannot be put up as collateral. Our team has many lenders from institutional banks to private lenders, ready to fund your condo loan. Our team is highly trained, ready to package and present your condo loan proposal.

Jordan St. Pierre - Mortgage Architects offers Mortgage Pre-Approval Services to clients across Spruce Grove, Stony Plain, Edmonton, St. Albert and Devon, AB.

Our Mortgage Services include:  First Time Home Buyer Mortgage | Mortgage Pre-Approvals | Mortgage Refinance | Mortgage Renewals | Private Mortgage Financing | Condominium Corporation Loans

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