How Does a Condo or HOA Association Loan Work? A Plain-English Guide for Florida Boards (2026)

The association is the borrower, not the homeowner. That single fact resolves most of the confusion boards run into: the loan doesn't touch any individual owner's credit, it isn't secured by a mortgage on anyone's unit, and it's repaid the same way every other association expense is — through assessments collected from all owners. What varies is whether the board can approve the loan alone or needs a membership vote, and that answer lives in your governing documents, not a one-size-fits-all statute.

Who's actually borrowing

An association loan is a liability of the association as a legal entity — in nearly every case, a Florida not-for-profit corporation. The lender underwrites the association's financial condition: assessment income, delinquency history, reserve funding, budget size. It does not underwrite individual owners, and the debt does not appear on any owner's personal credit file. Repayment flows from the same assessment stream that funds payroll, insurance, and landscaping — either from the regular budget, from a dedicated special assessment, or from a combination, depending on how the board structures repayment.

This distinction matters because it changes what's actually at risk. An owner who falls behind on a special assessment faces the same lien and foreclosure exposure they'd face for any delinquent assessment — but the loan itself isn't a claim against that owner's unit. It's a claim against the association's income stream.

Where the power to borrow actually comes from

Neither Chapter 718 (condominiums) nor Chapter 720 (HOAs) contains a single sentence that says "the association may borrow money." The authority is assembled from a few layers:

• General corporate power. Most Florida associations are incorporated under Chapter 617 (the Not For Profit Corporation Act) or Chapter 607. Either way, §617.0302(7), Fla. Stat. grants the power to "incur liabilities, borrow money... issue its notes, bonds, and other obligations, and secure its obligations by mortgage and pledge of all or any of its property, franchises, or income."
• The condo cross-reference. §718.111(2), Fla. Stat. pulls that corporate power into the Condominium Act, stating association powers include those in the declaration and bylaws "and part I of chapter 607 and chapter 617, as applicable."
• The HOA cross-reference. §720.302(5), Fla. Stat. does the same thing for HOAs, incorporating whichever chapter — 607 or 617 — the association was formed under.

So the borrowing power exists for both condos and HOAs, but it's inherited corporate power, not a purpose-built statute. That matters because Chapter 720 — unlike Chapter 718 — contains no reference at all to "borrow," "loan," "line of credit," "mortgage," or "encumber." For an HOA, there's no HOA-specific borrowing statute to fall back on; the general corporate power plus whatever the governing documents say is the entire picture.

Board authority vs. membership vote — the documents control

This is the single most commonly mis-stated point in association financing, and it cuts against a lot of what boards assume. Outside a small number of specific statutory triggers, neither Chapter 718 nor Chapter 720 sets a general vote threshold for borrowing. The declaration and bylaws control. As Becker & Poliakoff has put it directly: whether a membership vote is required to borrow "would be controlled [by] your condominium documents... there is no general rule, some documents require approval and some documents do not."

The specific statutory exceptions worth knowing:

• SIRS-reserve financing (condos and co-ops only). A loan, line of credit, or special assessment used to fund SIRS reserves requires a majority vote of the total voting interests, by statute, regardless of what the declaration says (§718.112(2)(f)2.c, Fla. Stat.). This is the one place Florida law imposes a specific, universal vote threshold on association borrowing. See HB 913, Explained for the full mechanics.
• Mortgaging condo association property. If a condo association wants to mortgage real property it owns outright (as opposed to common elements — see below), the declaration's own procedure governs; if the declaration is silent, the statutory default is 75% of the total voting interests (§718.111(7)(a), Fla. Stat.).
• Emergency borrowing. During a declared state of emergency, the board — condo or HOA — may borrow money and pledge association assets as collateral without a membership vote, specifically to fund emergency repairs when operating funds are insufficient (§718.1265(1)(m), Fla. Stat. for condos; §720.316(1)(k), Fla. Stat. for HOAs). This is narrow relief tied to a declared emergency, not general standing authority.

Outside those three scenarios, the question "does our board need a vote?" has one honest answer: read the declaration and bylaws. That's exactly what a lender does during underwriting — reviewing the governing documents for borrowing authority, caps, and any required approval threshold is a standard part of association loan diligence.

Condo vs. HOA — don't assume they're symmetric

Point	Condo (Ch. 718)	HOA (Ch. 720)
General borrowing power	§718.111(2) → §617.0302(7)	§720.302(5) → §617.0302(7)
Mortgage of association-owned real property	§718.111(7)(a) — 75% vote default if declaration silent	No statutory equivalent
SIRS-reserve loan/LOC vote threshold	Majority of total voting interests, by statute	No equivalent — HOAs have no SIRS mandate
Emergency board-only borrowing	§718.1265(1)(m)	§720.316(1)(k)
Common-element encumbrance restriction	§718.107 — cannot be separately mortgaged	Structurally different; HOA common areas are typically owned in fee by the association itself

The practical takeaway: condo financing has more statutory scaffolding to lean on, especially since HB 913. HOA financing rests almost entirely on the governing documents and general corporate power — which makes reading your declaration and bylaws even more important before assuming what a board can or can't do alone.

How association loans actually get secured

Boards often ask whether a lender will put a lien on the building. Usually, no — and for condos specifically, usually can't.

Condominium common elements — the shared structural and mechanical systems, not individually owned units — are held as undivided shares appurtenant to each unit. By statute, "the share in the common elements appurtenant to a unit cannot be conveyed or encumbered except together with the unit," and no partition action is available (§718.107(1)–(3), Fla. Stat.). That rules out a lender simply taking a mortgage on the building's common elements the way a commercial lender might mortgage an office building.

There's a separate, narrower category — "association property," meaning real property actually titled to the association itself, distinct from common elements — that can be mortgaged, subject to the declaration's procedure or the 75% default described above (§718.111(7)(a), Fla. Stat.). Keeping "common elements" and "association property" distinct matters here, because they follow different rules.

Given that restriction, the dominant security structure for association loans is an assignment of assessments: the association assigns its right to levy and collect regular and special assessments to the lender as collateral, rather than pledging real property. A typical closing package includes a promissory note, the assignment of assessments, and a board resolution certifying the board's authority to enter into the loan. HOA common areas are usually owned in fee by the association itself, which changes the structural picture — whether the same anti-encumbrance restriction that applies to condo common elements has any parallel for HOA common areas is not settled in available guidance, so don't assume either that it does or doesn't apply to a specific HOA without reviewing that association's documents.

What a typical loan actually looks like

Association financing generally comes in one of two structures: a term loan, disbursed as a lump sum and repaid on a set schedule, or a line of credit, drawn down incrementally as construction costs come due and often converted to a term loan once the project is complete. The draw-down structure suits phased capital work — roof, then waterproofing, then electrical — where paying interest only on funds actually drawn keeps carrying costs lower during construction.

Repayment typically comes from some combination of regular assessment income, a dedicated reserve allocation, or a special assessment sized to cover debt service — the board decides how to split that burden across owners, subject to whatever vote its documents require for that repayment mechanism.

What actually drives how a lender prices and structures a given loan varies by file: delinquency rate and its trend, how well reserves have been funded historically, the length of term requested, the strength of the assessment stream being assigned as collateral, and whether the association is professionally managed. None of that translates into a rate or fee figure that applies generally — pricing is set loan-by-loan during underwriting, not published as a rate card.

What happens if an individual owner doesn't pay their share

Because repayment ultimately flows through assessments, a board financing a capital project needs to think through what happens when a specific owner falls behind. The mechanics are the same as for any other delinquent assessment, loan-funded or not: if the association's documents structure the obligation in installments, late installments accrue interest — at whatever rate the declaration sets, or 18% by default — plus an administrative late fee of the greater of $25 or 5% of the delinquent installment (§718.116(3), Fla. Stat.). The association can still pursue its normal lien and collection remedies against that owner's unit. What doesn't happen is any claim against the owner's personal credit or assets beyond the property-based lien process every association already uses for ordinary delinquent assessments.

Loan terms and structure in practice

Association loan terms vary by project type and lender. Shorter-term financing suits smaller, discrete repairs; newer institutional lending programs aimed specifically at SIRS and milestone-driven capital work are now offering terms of up to 30 years, which meaningfully changes the monthly assessment math on a large project compared to a loan amortized over five or ten years. Line-of-credit structures typically have a draw period during construction — interest accrues only on funds actually disbursed — followed by conversion to a term loan once the project completes and the full balance is known. A board weighing term length is really weighing two things against each other: a longer term lowers the monthly or annual per-unit cost, while a shorter term reduces total interest paid over the life of the loan.

The documents a lender will want

Because so much of the analysis above depends on your specific governing documents and financial history, lenders build their diligence checklist around exactly that:

• Current financial statements (income and expense, balance sheet)
• An accounts-receivable aging report showing delinquency by unit
• The current operating budget
• The reserve study or SIRS, if one exists
• Insurance certificates and the master policy declarations page
• The declaration, articles of incorporation, and bylaws — reviewed specifically for borrowing authority and any vote threshold
• Board meeting minutes documenting the authorization vote, where one is required

Every item on that list exists to answer one of the two questions this piece has walked through: can the association repay the loan, and does the board have the authority to sign for it. See How to Get an Association Loan in Florida for the complete checklist and what each document is used for.

What association loans are typically used for

The projects that drive most Florida association financing right now trace directly to the post-Surfside compliance regime: roof replacement, concrete restoration, waterproofing, elevator modernization, plumbing and electrical upgrades, and capital work triggered by a milestone inspection's Phase 2 findings or a SIRS funding gap. See What Roof, Concrete & Elevator Projects Really Cost for how those categories tend to scope, and how boards are financing them without draining reserves outright. A smaller share of financing goes to genuinely urgent, time-boxed work — a failed milestone inspection starts a 365-day clock to commence repairs, which is its own funding conversation.

How much can an association actually borrow

Neither chapter sets a statutory dollar cap on association borrowing. In practice, the number a lender will offer is a function of the same factors that drive underwriting generally: the size of the project, the association's operating budget and assessment income, its delinquency rate and trend, and how much of the loan the assignment of assessments can realistically support as a repayment source. A 400-unit association with a healthy budget and low delinquency can typically support a meaningfully larger loan than a 40-unit association with the same delinquency rate, simply because the assessment base backing repayment is larger. This is also where governing-document caps discussed below come in — a declaration that requires a membership vote above a certain dollar threshold effectively sets a practical ceiling on what the board can approve unilaterally, even if a lender would offer more.

Commonly seen restrictions in governing documents

Beyond the statutory minimums above, many Florida declarations and bylaws add their own limits — these are common drafting conventions, not universal Florida rules, and vary by association:

• A dollar cap or percentage-of-budget threshold above which member approval is required regardless of the general corporate power described above.
• A requirement that a loan repaid via special assessment go through the same approval process as the special assessment itself.
• Restrictions on pledging reserve funds as collateral.
• A requirement for board-resolution documentation and, sometimes, notice to first mortgagees on file.

None of these are statutory defaults — they're document-specific, which is exactly why lenders review the declaration and bylaws before quoting terms rather than assuming a standard structure applies.