Managing Your Community Association Finances

Managing Your Community Association Finances

By Mark Evans / Published August 2023

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There is a lot to consider when managing the finances for your community association. Board members may have experience with managing their personal accounts and investments but not with managing reserves and association accounts. Finding a local banking partner that is experienced in reserve management and specialized community association financing is key to creating successful financial plans for your community.

     I have worked on both sides of the table, serving as the CFO of a community association management company and now working for a financial institution that serves community association clients with banking products and services. This is the first time in my career where I see financial and property concerns overlapping at a breakneck speed. Now more than ever, Florida community associations need a trusted banking partner with experience in community association financing and reserve accounts. Let’s look at both.

Specialized financing for community associations

     Community associations routinely balance the needs and wants of homeowners, from maintenance to upgrades or expansions. But the past few years in Florida have brought additional pressures, which must now be addressed quickly, not at a community’s leisure.

     Florida Senate Bill 4-D is enacted legislation that calls for all community association buildings over 30-years old and/or three stories or higher to be inspected within the next year; the associations then have 12 months to make any needed repairs.

     Financing can be a useful tool for getting those projects done while staying fiscally responsible. With financing approval, community associations can get the funds they need to start their projects right away while making payments over time. The result can mean projects move forward while residents see more modest HOA increases than they would when paying upfront for a project in full.

     Lenders that understand the needs of community associations can offer flexible loan products to meet their needs and cover full project costs. Look for loan structures that work for the type of project you need to finance. The following are some financing options:

  • Standard term loan
  • Quick-term loan
  • Revolving lines of credit

     Your lender should be able to give you options for term lengths, draw periods, fees, and documentation. Look for a lender with experience in HOA financing and who has local representatives who will meet with your board members, attend community meetings, and help explain financing solutions.

     To simplify the financing process, be prepared. It will help to have your documentation in order. Gather your bylaws, governing documents, budget, insurance policies, property blueprints, and other community details. Review the documentation to understand if a vote by the entire community or the board is required before proceeding. Be specific about the project scope and cost. Work with an experienced construction manager to define the project specs, evaluate contractor bids, and prepare a detailed construction budget. The extra cost you may incur in the short run will be offset by savings later. Review the bylaws and other documentation to understand what is required to have financing approved.

Reserves account experience

     In addition to having experience in lending, the bank you work with should understand the importance of managing reserve accounts. Community associations have dealt with an increase in unexpected costs over the past few years, and many may have tapped into their reserves. With recent changes to property insurance costs in Florida, it is likely that reserve allocations could see additional changes.

     Keeping your reserve study updated is essential in helping your community budget for unexpected increases in cost, like rising insurance rates, and plan for future needs such as a roof, paint, or a new community center. It’s imperative for an association to outline how money should be saved and spent. By understanding these costs, your community association can proactively understand how to budget. Your budget should include both operating funds and reserve funds.

     It is also essential to keep your reserve funds safe since many community associations have reserve funds over the FDIC insurance limit of $250,000 per tax ID. Choosing the right reserve products can help protect every dollar of those funds while ensuring your community’s money is accessible when you need it. For instance, CD ladders mature at staggered intervals, giving your association regular access to funds.

     To get started with CD laddering, sit down with a bank specializing in community associations to discuss your specific needs. Be prepared to discuss your future projects and when they will begin. The bank will help you ladder your CDs to align with your major projects, so they’ll mature when funds are needed.

     When managing your community association finances, finding a local banking partner that has experience in managing reserves and community association financing is key to creating successful financial plans for your association.

Get started today

First Citizens Bank has experienced community association specialists throughout Florida. We invite you to learn more about our financing options and strategic reserves account management. Visit us at

     This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information and encourages you to consult a professional for advice applicable to your specific situation.

Mark Evans

Regional Account Executive

     Mark Evans is the regional account executive for Central and East Florida for First Citizens Bank. Mark has vast experience in the community association industry, including serving as CFO for a property management firm in the Space Coast area and as a vendor partner prior to rejoining the community association banking team in 2015. Mark also was on the first board of directors for the Northeast Florida Chapter of CAI. He earned both his undergraduate and graduate degrees at Auburn University. For more information, call 321-745-8444 or email