Major repairs, underfunded reserves, or a desire to invest in your community’s future can all prompt your HOA to consider financing. If you’re wondering how to get a loan from First Citizens Bank, you’re not alone.
This guide walks HOA board members and managers through the process, key requirements, and best practices for working with First Citizens Bank or any reputable lender.
For more detail on HOA lending, see our HOA Loan Services page.
What Specific Criteria Do Banks Typically Look for When Approving a Loan for an HOA?
Banks like First Citizens use clear criteria to evaluate HOA loan applications. Knowing these upfront helps your board prepare a stronger application and avoid common pitfalls.
- Financial Health: Up-to-date financial statements, a balanced budget, and a clear record of operating funds and reserves.
- Reserve Funding: A “percent funded” ratio of at least 30% is often the minimum, but 70%+ is considered strong.
- Delinquency Rates: Lenders usually require delinquency rates below 10–15%.
- Community Size & Project Scope: Most lenders require at least 20–25 units and a minimum loan amount of $250,000.
- Governing Documents: Bylaws and CC&Rs must authorize the board to borrow on behalf of the association.
A strong reserve study and clear documentation of your financial management can make a significant difference. Lenders also appreciate when boards can show they’ve considered all funding options and have a plan for addressing any financial weaknesses.
How Can Your HOA Improve Its Chances of Getting Approved for a Loan?
- Organize Financials: Ensure all statements, budgets, and reserve studies are current and accurate.
- Reduce Delinquencies: Proactively collect overdue assessments and document improvements.
- Document Projects: Provide detailed project descriptions, cost estimates, and timelines.
- Review Governing Documents: Confirm borrowing authority and follow required approval processes.
- Engage Homeowners: Communicate openly about the loan’s purpose and benefits.
Highlight recent reserve studies or budget updates in your application. Comparing proposals from multiple lenders in a national loan network ensures your community gets the best terms.
What is the Step-By-Step Process for Applying for a First Citizens Bank HOA Loan?
- Initial Inquiry: Contact First Citizens Bank or a loan facilitation partner like HOA Lending Services.
- Preliminary Review: Submit basic HOA and project info.
- Document Preparation: Gather recent financials, reserve study, annual budget, governing docs, and approval records.
- Formal Application: Complete the application with project and loan details.
- Underwriting: The bank reviews your financials and project plan.
- Proposal & Negotiation: Receive and negotiate loan terms.
- Approval & Closing: Sign documents and arrange funding.
- Disbursement & Payment: Funds are released; use the First Citizens Bank HOA online payment portal to manage payments.
The process typically takes 1–6 months. Loans are made to the association as a whole—no personal liability for homeowners or liens on individual units.
Why Do HOA Boards Choose First Citizens Bank for Community Financing?
- HOA Expertise: Dedicated teams understand the unique needs of community associations.
- Competitive Terms: Flexible, long-term loan options tailored to HOA budgets.
- Transparent Process: No upfront or hidden fees—pay only upon successful loan closing.
First Citizens Bank’s approach—transparent, community-focused, and free of aggressive sales tactics—aligns with the highest standards of integrity. Boards value the ability to compare options within a robust loan network and select the structure that best fits their community’s goals.
What Types of Projects are Typically Funded by HOA Loans From First Citizens Bank?
- Roof, siding, plumbing, and infrastructure repairs
- Pool, tennis court, and amenity upgrades
- Road resurfacing and landscaping improvements
- Lawsuit-related costs or refinancing of existing loans
Loan amounts range from $250,000 for smaller projects to several million for major upgrades. These funds help protect property values and improve residents’ quality of life.
Key Takeaways
- Prepare clear, up-to-date financials and a strong reserve study.
- Keep delinquency rates low and document all improvement efforts.
- Engage homeowners and follow all governing processes for loan approval.
- Compare multiple proposals to secure the best terms for your community.
- Consider partnering with an experienced loan facilitation platform for expert guidance and access to a national lender network.
Ready to Explore Your HOA’s Financing Options?
Contact HOA Lending Services for a free consultation and get connected with a trusted HOA loan broker who will guide you every step of the way.
