Before You Bill Owners $26,000: How an Association Loan Compares to a Special Assessment

Two California condominium communities made the news in September 2026 for the size of their special assessments. Owners at a 198-unit complex in San Clemente were each billed more than $26,000 for roof replacements (ABC7, September 1, 2026). A week later, owners at a 499-unit complex in Torrance were each assessed more than $49,000 for work that includes rebuilding the complex's podium, re-piping the property and repairing elevators (ABC7, September 7, 2026).

We don't know either association's finances, and this isn't a verdict on either board. Repairs like these have to be paid for. The question every board faces is how: all at once from owners, or over time through an association loan. For the general comparison, see our guide to special assessments and HOA loans.

What does a special assessment ask of each owner?

A special assessment divides the cost among owners and asks them to pay it now, or in a few large installments. In San Clemente, ABC7 reported three options: pay in full, split it into two payments, or add more than $2,000 to the monthly payment for six months and $400 after that.

Some owners can write that check. Others have to find the money themselves, from savings or a loan of their own. The individual route can take months or years, and depends on each owner's credit, financial situation and home equity. If each owner has to find their own loan and only 70% can, the project is still 30% short. We cover that math in who shoulders the burden.

There are a few pitfalls of choosing to assess before, and instead of, taking out a loan. The most significant mistake is this: if you fail to collect your assessment, you may have also just lost the ability to borrow money. What do I mean by this? If you only collect 80% of your assessments, you are still 20% short. Either the rest of the community has to cover for those owners, or you now have 20% delinquency on the special assessment, and you might not qualify for a loan. We see this time and time again, whether it's one large assessment that forces units into delinquency, or repeated assessments until the community can't keep up and delinquency spikes, ultimately disqualifying them from a loan as well.

What would the same cost look like as an association loan?

An association loan pays for the project now and spreads the cost over years. The association repays it from assessments, so each owner's share shows up as a smaller monthly amount instead of one large bill.

These figures assume each owner's share of the loan equals the assessment, split equally. Some associations split by percentage ownership instead. Actual rate and structure are set by the lender.

Spreading the cost has a price: interest. Over 10 years, a $26,000 share comes to $36,628.80 in payments, $10,628.80 of it interest. That's the trade a board weighs: a smaller monthly amount for owners against a higher total cost. To run your own numbers, try the loan calculator, which shows the per-owner assessment beside the loan payment. We arrange financing for projects from $100,000 with no set maximum.

We recently closed a $2,000,000 loan in Maryland for a 222-unit community, for long-overdue capital improvements. They were facing a lump-sum special assessment of about $9,000 per unit, and we got them a 10-year loan that leveled out to about $107 a month per unit on average. They had been declined by 3 lenders, and we got them a competitive rate.

How does an association loan work for owners?

The association is the borrower. Owners can often pay their share up front and avoid the interest, but whether that's allowed can depend on the board, the governing documents and state law. Either way, the lender underwrites the community as a whole and collects one monthly payment from the association, not separate payments from each owner.

Owners can pay off their share early. The payoff is based on the remaining principal, and our owner payoff calculator estimates it.

An association's loan default doesn't go on owners' personal credit, and owners aren't personally liable for the loan. The lender cannot foreclose on owners' homes. The association's own lien against a delinquent owner is a separate power and is unaffected.

In the loans we arrange, board members sign on the association's behalf, not personally: there's no personal guarantee, and their credit isn't pulled. The loan stays with the association when the board changes. The lender just needs the new board members' names, positions and contact information.

Every loan we arrange is fully amortizing, with no balloon payment. Terms are typically 5 to 20 years.

When is a special assessment the better choice?

I almost never recommend an assessment before a loan. Here's the thing: if you pursue a loan, you can still offer owners the option to pay a lump sum later. But if you do the special assessment first, you limit your ability to go back and get the loan afterward. The loan is the only option that satisfies both groups: those who want to pay a lump sum and those who want to pay monthly over time. One exception: when it's a small loan and the assessment would only be a hundred or a couple hundred dollars per unit, I might recommend the assessment, because the cost of borrowing would outweigh the benefit. But some communities still tell me $100 or $200 is a lot for their owners, and a loan is a better fit.

We tell boards when borrowing is the wrong answer, and because we are paid at closing, we earn nothing when a board decides not to borrow. Our fee is the same whichever lender wins.

Why are California boards seeing bills this size?

ABC7 named California's balcony inspection law as one driver of special assessments. For condominiums, that law is SB 326, which our SB 326 guide explains. Reserve rules are changing too: HOA loans in California covers the state's rules, including AB 2050.

What should a board do before voting on a special assessment?

California sets limits of its own. Without the approval of a majority of a quorum of members, a board can't impose special assessments that together exceed 5% of the association's budgeted gross expenses for the fiscal year (Civil Code §5605). That limit doesn't apply in an emergency: an expense a court orders, one needed where a threat to health or safety is discovered, or a repair the board couldn't reasonably have foreseen when it prepared the budget. For that last kind, the board must first pass a resolution with written findings and send it to members with the notice of assessment (Civil Code §5610). The statute text was read on California.Public.Law, which verified it against the official code on November 2, 2026. Ask your association's attorney how these rules apply to your board.

• Get current bids. A reserve study is not a quote for work; current bids override study estimates.
• Check your governing documents and state rules on assessments, and ask your association's attorney how they apply.
• Compare both options per owner: the assessment, and what a loan would cost each month and in total.
• If a loan might fit, talk to us before the vote.

Weighing a special assessment against a loan?

Book a free consultation: we'll tell you what a lender is likely to flag and how much the association might reasonably borrow. There is no upfront cost, and we are paid at closing.

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