Spring Capital Projects: A Treasurer's Loan Planning Guide

A spring HOA capital project loan needs to start moving in March if construction is supposed to break ground in June. That sequence is not aspirational. It is the actual arithmetic of underwriting, closing, and pre-construction draw setup, and treasurers who miss the March window either delay the project by a full season or take on unnecessary rate risk.

We are writing this to the treasurer specifically. Board presidents can read it too, but the treasurer owns this workflow. If you are new to the seat, get the basics down first. This post assumes you already know them and want the timeline.

The Timeline, Working Backward From June 1

Assume your association wants shovels in the ground on June 1. Working backward, funding needs to close by mid-May so first draws can be scheduled. Most HOA loans close in 30 to 90 days from complete application to funding, and some take longer for a variety of reasons. That puts your target application submission at early April, and complete means every document is in, not just the intake form.

Week of March 22: Scope and Bid Confirmation

The board should have a scoped project, contractor bids, and a reserve study reference by now. If any of those three is missing, the application will bounce back and the timeline slips. Underwriters are unlikely to credit a project cost that lacks a bid, or a bid from a contractor with no insurance certificate on file.

Week of March 29: Financials and Delinquency Pull

Pull your three most recent audited financials, the current interim, and a delinquency aging as of month-end. Underwriters read the delinquency number carefully. If your delinquency at 60 or more days past due runs into the 8 to 10 percent range or higher, expect either a rate premium or a covenant addressing collections. We tell treasurers to run a delinquency report the day they call us so we can build that expectation into the term sheet request.

Week of April 5: Application Submitted

Complete application in by April 5 gives underwriting three to four weeks, term sheet review one week, documentation and closing prep three to four weeks, and funding by mid-May. Most loans close in 30 to 90 days, and some take longer for a variety of reasons, so that leaves no slack. Any later and June 1 slips.

Week of May 10: The Rate Gets Set

Lenders vary: some set the rate when the application is submitted, some when the term sheet is signed, and some in the final days before closing. Ask each one when yours is set. We watch the 10-Year Treasury daily during this window because HOA rates move with it, not with the Fed funds rate directly. We will tell you when each lender actually sets your rate and what happens if the closing date slips, so you know which offers leave more of your timeline exposed. Where a lender offers a float-down provision, we will ask for it.

Documentation Checklist for the Application

• Three years of audited financial statements
• Current interim financials, month-end most recent
• Reserve study, current
• Full project scope with contractor bids
• Contractor insurance certificates and licenses
• Current delinquency aging report
• Board resolution authorizing the loan
• Governing documents including CC and Rs and bylaws
• Property insurance certificate
• Assessment history over the past five years

Every item in that list will be requested. Some lenders ask for more. Boards that assemble the full package before submitting close faster than boards who send documents in trickles.

Rate Lock Timing and the 10-Year Treasury

HOA loan rates are quoted as a spread over the 10-Year Treasury, and each bank prices its spread differently. When the Treasury moves, your quoted rate tends to move with it. That means the rate you were quoted at application is not necessarily the rate you close at; it depends on when your lender sets it.

Whether a lender will hold a quote, for how long, and what happens if closing slips all vary by lender, and two term sheets at the same rate are not the same deal if one leaves more of your timeline exposed. Ask every lender the question and treat the answer as part of the offer. We walk boards through it deal by deal rather than giving a blanket rule.

What Happens If the Timeline Slips

If the application slips past early April, June 1 construction is unlikely. Boards then face a choice: delay construction to mid-summer, which shortens the working season in many climates, or push the project to fall or the following year. Neither is fatal, but both cost money. Contractor pricing moves. Contractor availability tightens in mid-summer. Association reserve interest income keeps accruing during the delay, so the true cost is the difference between reserve yield and project inflation, which in most years runs against the association.

Frequently Asked Questions

Can we start the project before the loan closes?

Some lenders permit reimbursement of pre-close expenditures if the board resolution authorizing the loan predates the spend. This is negotiated at term sheet stage. Do not assume it and start writing checks.

What if our reserve study is dated?

Many lenders ask for an update before funding; ask each one what it will accept. Order the update now if yours is dated. A reserve study can take a long time, especially if the association has never had one, or if it's a busy market or a busy time of year. Build that into your timeline, because it can slow the loan process down.

How large a loan can we qualify for?

Underwriters typically size a loan against assessable income, meaning the amount the board can charge per unit multiplied by unit count, less operating expenses. Your ceiling depends on assessment income, operating expenses, delinquency history and reserve position, and lenders size it differently; the calculator gives a cost-per-unit starting point.

Should we take a bridge loan instead of a permanent loan?

Rarely. Bridge structures make sense only when the association has a defined take-out event, such as a scheduled special assessment collection or a settlement. For most capital projects, a permanent amortized loan, typically 5 to 20 years, is the right structure.

Book a Spring Planning Call

Treasurers with a June start in mind should book a consultation this week. We will map your specific project onto the timeline, tell you which documents you can start pulling today, and give you a realistic term sheet range once we have seen the basics. No upfront cost, and we are paid at closing. Our AI-enabled client portal handles intake in one place, and we partner with HOA Start.