Small HOA Loans in Florida: The Ultimate Guide for Small Associations
If you serve on the board of a small homeowners or condominium association in Florida, getting a loan can be more difficult than you might expect.
The problem is not necessarily that your association is financially weak.
Sometimes, the association is simply too small for a traditional lender's program.
A small Florida association may need $75,000, $150,000, $250,000 or more for a roof, concrete restoration, structural repairs, plumbing, electrical work or another necessary project.
The owners may consistently pay their assessments. The project may be clearly documented. The association may have a reasonable plan for repayment.
Yet the community can still have fewer units, or need a smaller loan, than some traditional lenders prefer.
That does not necessarily make the association a bad borrower. It may simply mean the loan does not fit that lender's standard program.
This guide explains how financing works for small Florida HOAs and condominium associations, what lenders typically look for, why smaller communities can face additional challenges, and how a small association can prepare for financing.
What Is Considered a Small HOA or Condo Association?
There is no universal definition of a small HOA or condominium association.
For financing purposes, however, associations with fewer than approximately 25 units may encounter fewer lending options than larger communities.
Examples might include:
6-unit condominium
8-unit condominium
10-unit HOA
12-unit condominium
16-unit condominium
18-unit townhome association
20-unit condominium
24-unit HOA
Being small does not automatically mean being financially weak.
A 16-unit condominium where all 16 owners consistently pay their assessments may have a stronger financial profile than a much larger association struggling with serious delinquencies or cash-flow problems.
The lender needs to look beyond unit count.
Can a Small HOA or Condo Association Get a Loan?
Yes. Small Florida HOAs and condominium associations may be able to obtain financing.
The challenge is finding a lender that is comfortable working with communities of that size.
Some traditional lenders focus on larger associations or larger loan balances. A small community can therefore fall outside a lender's preferred profile even when its finances are otherwise healthy.
For a lender willing to evaluate smaller associations, the more important questions are usually:
How much does the association need?
What is the loan for?
Are owners paying their assessments?
Does the association have existing debt?
What does its budget look like?
Can it reasonably support the proposed loan payment?
Those questions often tell a lender more than the number of units alone.
Why Are Small HOA Loans Harder to Get?
1. Some lenders prefer larger communities
Traditional association lending programs may establish minimum community sizes. If a lender prefers larger associations, a small community can be screened out before its actual financial strength is fully evaluated.
2. Small associations often need smaller loans
A small association might need $75,000, $100,000, $150,000, $200,000 or $300,000.
Smaller commercial loans may be less attractive to some lenders because the lender still incurs underwriting, legal, documentation and servicing costs. That can create a gap for financially sound associations seeking relatively modest amounts of capital.
3. Each individual owner matters more
In a small association, every owner represents a meaningful percentage of the community.
For example, in a 16-unit condominium, each unit represents 6.25% of the association. If one owner becomes delinquent, the unit delinquency rate immediately reaches 6.25%. If two owners are delinquent, the rate becomes 12.5%.
Those percentages can look significant even when the underlying dollar amounts are manageable. That is why small-association underwriting often requires looking beyond percentages.
Delinquency Percentages Can Be Misleading in Small Associations
Consider a single delinquent owner. The same one unit produces a very different percentage depending on the size of the community:
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The exact same number of delinquent owners can therefore produce very different percentages.
Suppose a 16-unit condominium has one owner who is 45 days behind while the other 15 owners are fully current. That is very different from an association where several owners have not paid for many months.
A lender evaluating a small association may therefore look at:
Number of delinquent owners
Dollar amount delinquent
Age of the balances
Historical collection performance
Collection efforts
Payment plans
Overall assessment revenue
Cash available to the association
For small communities, the story behind the numbers matters.
A Note on Loan Approval
Before diving into what lenders look for, it helps to know that taking out an association loan is a formal decision, not just a signature from one board member.
Depending on your governing documents and the type of association, a loan generally requires board approval and, in many cases, a vote of the owners. Boards should review their declaration and bylaws and confirm the specific approval and voting requirements with association counsel before committing to financing.
For a broader overview of how association financing works in Florida, including reserve and structural-repair funding rules, see our companion guide to Florida HOA and condominium loans.
What Makes a Small Association a Good Loan Candidate?
The strongest small-association loans are often relatively simple:
Small community. Strong collections. Necessary project. Insufficient cash today.
To make this concrete, we will follow one example throughout the rest of this guide.
Our running example: a 16-unit Florida condominium facing a $240,000 roof and exterior restoration project. The association has consistent assessment collections, contractor proposals supporting the cost, roughly $40,000 in available cash, no excessive existing debt, and a budget capable of supporting financing.
At $240,000 across 16 units, that project represents an average cost of $15,000 per unit if funded entirely up front. The association does not have enough cash to pay the whole cost immediately. That does not necessarily mean it has a credit problem. It may simply have a financing need.
We will return to this association as we work through reserves, delinquencies and loan sizing below.
What Can a Small Florida HOA Loan Be Used For?
Small associations have many of the same capital needs as larger communities. Common projects include roof replacement, concrete restoration (balconies, walkways, decks and walls), structural repairs, waterproofing and exterior restoration, major plumbing and electrical work, elevator repair or modernization, insurance-related expenses, paving and parking areas, seawalls and waterfront work, and emergency repairs.
Sometimes the main issue is not whether the association can afford a project over several years. It is whether the association has enough cash to start the work today.
For a more detailed breakdown of eligible project types, including reserve and milestone-related work specific to Florida condominiums, see our companion guide to Florida HOA and condominium loans.
Can a Small HOA Get a Loan With Low Reserves?
Potentially.
Low reserves are often one of the reasons an association begins looking for financing.
Return to our 16-unit condominium. Its roof and restoration work totals $240,000, and it has about $40,000 available, so it needs roughly $200,000 more. That does not necessarily mean the association is financially unhealthy.
There is an important distinction between a long-term inability to pay and not having enough cash available today.
If owners consistently pay assessments and the association has sufficient future cash flow, financing may allow the community to complete a necessary project while spreading the cost over time. A lender will still want to understand why reserves are low and whether the proposed debt service is sustainable.
Can a Small HOA Get a Loan With Delinquencies?
Potentially, yes.
Delinquencies matter because association loans are generally repaid from assessments collected from owners. But in a small community, one or two delinquent units can create a large percentage very quickly.
A lender may therefore look at the number of delinquent units, the dollar amount outstanding, the age of the delinquency, whether collection efforts are active, historical payment performance, how the remaining owners are performing, and the association's overall liquidity.
One late-paying owner in a 16-unit association is very different from several chronically delinquent owners in the same association.
Can a Self-Managed Small Association Get a Loan?
Potentially, yes.
Many small Florida associations are self-managed because hiring a full-service management company may not make economic sense. Being self-managed does not automatically make an association unfinanceable.
The important question is whether the association can provide clear, reliable information. A lender may want to understand how much owners are assessed, who has paid, who is delinquent, current bank balances, annual income, annual expenses, existing obligations, and the cost of the proposed project.
A self-managed association with clean records can be easier to evaluate than a professionally managed association with poor records.
How Much Can a Small HOA Borrow?
There is no single formula. The appropriate loan amount depends on factors such as the number of units, annual assessment income, current assessment levels, collection history, delinquencies, existing debt, cash and reserve balances, project cost, proposed loan term, debt-service requirements, other upcoming expenses, and overall financial condition.
Our 16-unit association borrowing $200,000 is a very different proposition from the same association seeking $750,000. The real question is not "How many units are there?" It is "Can the association's recurring assessment revenue reasonably support the proposed loan?"
If the association contributes its $40,000 in cash and finances the remaining $200,000, it reduces the amount that must be collected from owners immediately. The lender would then evaluate whether ongoing cash flow can support repayment. The fact that the association has 16 units is relevant, but it is only one part of the analysis.
What Does a Lender Look for in a Small Association?
Assessment collections — whether owners reliably pay what they are assessed.
Delinquencies — both the number of delinquent owners and the dollar amount.
Annual income — the recurring income that determines ability to repay debt.
Operating expenses — how much cash is already committed to normal operations.
Existing debt — current loans or obligations that reduce borrowing capacity.
Project purpose — a clearly defined project is easier to evaluate than a general request for cash.
Contractor bids and estimates — documentation that supports the requested amount.
Cash and reserves — liquidity that provides context about financial position.
Overall financial organization — accurate records make underwriting significantly easier.
What Documents Should a Small Association Prepare?
Boards should generally expect to provide some combination of:
Current annual budget
Recent income and expense statement
Balance sheet
Bank balances
Reserve balances
Accounts receivable aging
Delinquency report
Assessment schedule
Existing special assessments
Contractor proposals
Project estimates
Engineering documentation, when applicable
Insurance information
Existing loan information
Basic governing and organizational documents requested during underwriting
The exact requirements depend on the lender and transaction. For a small association, well-organized records can make a meaningful difference.
What If a Bank Already Said No?
A bank rejection does not always mean that the association is a bad credit. The first question should be: Why was the loan declined?
Possible reasons may include:
Association is below the lender's preferred unit count
Requested loan is too small
Delinquency percentage is above the lender's guidelines
Reserves are below the lender's preferred level
Owner concentration is too high
Association is self-managed
Project requires more flexibility
Timing is too urgent
Some of those may represent legitimate credit concerns. Others simply mean the transaction does not fit that lender's lending program. A financially sound 16-unit association can still be too small for a lender focused primarily on larger communities. The board may need to find a lender specifically willing to evaluate smaller associations.
Bank Loan vs. Private HOA Loan for a Small Association
Small associations can consider both traditional banks and private association lenders.
Traditional bank financing
Bank financing may offer attractive pricing when the association fits the lender's criteria. Potential advantages can include lower interest rates, longer terms and established lending programs. The challenge is that smaller communities or smaller loan requests may not fit every bank's lending model.
Private HOA financing
A private association lender may have greater flexibility to evaluate the specific association rather than relying primarily on standardized thresholds. That can be useful for associations under 25 units, smaller loan requests, self-managed communities, low-reserve associations, time-sensitive projects, and communities that have already encountered difficulty with traditional lenders.
Private financing may cost more than conventional bank financing. Boards should therefore compare interest rate, loan term, monthly payment, fees, prepayment provisions, closing timeline, approval certainty and documentation requirements.
The lowest available rate is only attractive if the association actually qualifies for it. For a small community, availability and execution can matter just as much as headline pricing.
Why Financing Can Make Sense for a Major Project
Return one last time to our 16-unit condominium and its $240,000 project. Funding the entire project immediately means an average cost of $15,000 per unit. Some owners may have no difficulty paying that amount. Others may find it difficult to produce the cash immediately.
Association financing can potentially allow the project to proceed while spreading repayment over time. That can be particularly relevant when the project cannot reasonably be delayed, contractor pricing is already established, existing cash is insufficient, owners would prefer smaller payments over time, and the association expects to remain financially stable during the repayment period.
How Can a Small Association Improve Its Chances of Getting a Loan?
1. Know exactly how much money you need
Start with actual project costs rather than an arbitrary loan amount.
2. Know your delinquency numbers
Boards should know the number of delinquent units, the dollar amount delinquent, and the age of the balances.
3. Keep financial statements current
The lender should be able to understand the association's finances quickly.
4. Document the project
Have contractor proposals, estimates or engineering information available when appropriate.
5. Explain unusual numbers
If one owner makes your delinquency percentage look unusually high because the association only has 16 units, explain that. If reserves recently declined because the association completed another major project, explain that too.
6. Approach lenders that work with small associations
Ask early whether the lender has minimum community-size or loan-size requirements. That can save the board significant time.
Frequently Asked Questions About Small HOA Loans in Florida
Can a 16-unit condo association get a loan?
Potentially, yes. A 16-unit association may be too small for some lenders, but that does not mean it is too small to finance. The lender will typically evaluate the association's cash flow, assessment collections, delinquencies, project and overall repayment ability.
Can an HOA with fewer than 20 units get a loan?
Potentially. Financing options may be more limited, so the association should seek lenders specifically willing to work with smaller communities.
Can a 10-unit condominium get a loan?
Potentially. The association's size is only one underwriting factor. Loan amount, project purpose, assessment collections and repayment capacity also matter.
Can a small HOA get a loan with low reserves?
Potentially. Low reserves may be one reason financing is necessary. The lender will generally want to determine whether future association cash flow can support repayment.
Can a self-managed association obtain financing?
Potentially. Organization and accurate financial records become particularly important for self-managed communities.
Can a small HOA get financing after a bank rejection?
Possibly. The board should determine whether the rejection resulted from the association's credit profile or simply from lender-specific requirements.
Does a small association loan require an owner vote?
It depends on the association's governing documents and type. A loan generally requires board approval and, in many cases, a vote of the owners. Confirm the specific requirements with association counsel before committing.
What is the minimum loan amount for Samtov Finance?
Samtov Finance currently considers association loans beginning at $50,000.
Does Samtov Finance work with associations under 25 units?
Yes. Small associations, including communities with approximately 16 units or fewer, are welcome to apply, subject to underwriting.
Small HOA Loans From Samtov Finance
Samtov Finance provides financing to Florida homeowners and condominium associations, including smaller communities that may not fit traditional lending programs.
Current Samtov Finance lending parameters include:
Associations of all sizes, including communities under 25 units
Loans beginning at $50,000
Terms generally ranging from 1 to 5 years
Generally no personal guarantee
Financing for roofing, concrete restoration, structural repairs, elevators, electrical work, insurance expenses and other major association projects
Approvals that may be available quickly depending on the transaction and documentation
All loans are subject to underwriting and final approval.
Small Association? Start With the Numbers.
If your Florida HOA or condominium association has fewer than 25 units, being small should not automatically prevent you from exploring financing. A 16-unit association can be a perfectly reasonable borrower when the underlying financials support the loan.
Start with four questions:
1. How many units are in the association?
2. How much does the association need to borrow?
3. What is the money for?
4. How are assessment collections performing?
Those answers can tell a lender far more than community size alone.
Contact Samtov Finance at 754-900-7252 to discuss financing for your Florida HOA or condominium association.
Loan approval and terms are subject to underwriting. This article is provided for general informational purposes and does not constitute legal, accounting or financial advice.