HOA and condo association loans in California.
One act covers nearly every community in California, and one requirement does not. We work with boards across the state on reserve shortfalls, balcony inspection work, and the assessment increases that pay for them.
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One act covers nearly every community here
California puts community apartment projects, condominium projects, planned developments and stock cooperatives under a single statute, the Davis-Stirling Common Interest Development Act. Whichever of those your association is, the reserve rules and the assessment limits below apply to you in the same way.
One requirement does not work that way. The exterior elevated element inspection reaches condominium projects only, and within those it reaches buildings with three or more attached multifamily dwelling units. If you are a planned development of detached homes, that section is not yours.
Your articles and bylaws decide whether you can borrow
California's community association statute does not grant associations the power to borrow, and a board searching Davis-Stirling for permission will not find it there. The power comes from the Nonprofit Corporation Law, which gives a corporation the power to assume obligations, enter into contracts, incur liabilities, borrow or lend money or otherwise use its credit, and secure any of those obligations by mortgage, pledge or other encumbrance of all or any part of its property and income.
That is a real grant, and it is conditional. It applies subject to any limitations contained in the articles or bylaws. Your own documents are the first thing a lender reads, and they are the one place a loan can be stopped outright rather than slowed down.
Cal. Corp. Code § 7140(i), read 23 September 2026 on leginfo.legislature.ca.gov.
California requires a reserve study every three years
At least once every three years the board must have a visual inspection conducted of the accessible areas of the major components the association is obligated to repair, replace, restore or maintain, as part of a study of its reserve account requirements. The requirement bites where the current replacement value of those components is at least half the association's gross budget, excluding reserves.
The study must identify the components with less than 30 years of remaining useful life, estimate their remaining life and their cost, estimate the annual contribution needed to cover them, and set out a reserve funding plan. The board must review the study annually and adjust.
Cal. Civ. Code § 5550, read 23 September 2026. Amended by Stats. 2024, Ch. 288 (SB 900), effective 1 January 2025.
The balcony inspection is condominium only, and it is tied to your reserve study
At least once every nine years, the board of a condominium association must have a licensed structural or civil engineer or architect visually inspect a random and statistically significant sample of exterior elevated elements. Those are the load-bearing components and their waterproofing on decks, balconies, stairways and walkways with a walking surface more than six feet above ground.
The first inspection was due by 1 January 2025, and then every nine years after that in coordination with the reserve study inspection. Buildings for which a permit was applied for on or after 1 January 2020 are inspected within six years of the certificate of occupancy instead.
The coordination is the part worth planning around. The two inspections are meant to run together, which means the report that prices the work and the study that says whether you can fund it arrive at the same time.
Cal. Civ. Code § 5551(b), (i), (k) and (l), read 23 September 2026. Amended by Stats. 2025, Ch. 516 (SB 410), effective 1 January 2026.
Raising assessments to repay a loan has a ceiling
The board may not impose a regular assessment more than 20 percent greater than the regular assessment for the preceding fiscal year, and may not impose special assessments that in the aggregate exceed 5 percent of budgeted gross expenses for that year, without the approval of a majority of a quorum of members.
That limit binds regardless of what your governing documents say, and it applies to the assessments that repay a loan exactly as it applies to any others. It is the number to model against before a board commits to a repayment schedule.
Cal. Civ. Code § 5605(b), read 23 September 2026.
This section summarizes California law current as of 23 September 2026, read from the statutes themselves rather than from secondary sources. We place loans and we do not practice law, so treat this as general information and confirm with your association’s attorney how it applies to your community.
Boards also ask
Should we take a loan or levy a lump sum special assessment?
They fund the same project and feel completely different to owners. A lump sum special assessment asks every owner for a large payment at once, which is where boards meet the hardest resistance and where owners on fixed incomes get hurt. A loan spreads the same cost over years, so the monthly impact per unit is far smaller, and it does not depend on every owner having cash available. The tradeoff is interest: over the life of the loan you pay more in total. Some communities are better served by a phased project or a smaller assessment paired with a smaller loan. We model all of them side by side so your board decides with the same numbers in front of everyone.
Why do associations borrow money?
To fund major capital projects, cover emergency repairs, or avoid a lump sum special assessment that asks every owner for a large payment at once. Waiting is also a decision. Deferred work rarely gets cheaper, and an unsafe condition can force the timeline for you.
How do we get an HOA loan?
Five steps. You tell us about the project and send your financials; we review what your association can realistically support and confirm your borrowing authority; we take your project to the lenders most likely to approve a community like yours and bring back competing proposals; your board selects one and completes the approval process your documents require; the loan closes and funds draw as the work proceeds. Most boards spend a few hours of their own time across the whole process. From application to closing it usually runs 30 to 90 days.
HOA lending is all we do.
We strategize, organize, and place your loan where it’s most likely to succeed.
California communities we have funded
Roof replacement and plumbing repair
- Loan amount
- $2.05 million
- Structure
- 10-year fixed rate
- Community
- Palm Springs, California, 300 units
“It was clear from the start that the expertise provided by HOA Loan Services was indispensable during the long process of securing a loan.”
