Sorry if this is the wrong place for this question.

Wife and I have a condo in CSTAT we use for games, etc. Somehow, I have become the treasurer for our HOA. I am not really a money guy, but I can add and subtract, and I don't steal, so I have been an upgrade over the previous folks.

Previous HOA boards took out a pretty large loan in the past. That money is just sitting in an account, doing nothing. My question, is there a place we can park some of that money and at least earn a little something on it, while still keep the ability to access it in a reasonable time? I park extra money from my business in a High Yield Savings Account with Synchrony Bank, and at least right now I am earning over 3%. Just takes about five days to access the money when you put in the request.

Is that a possibility for the HOA to do? It's a couple hundred thousand I am talking about, just sitting there. Are the rules different? Is it too much effort for the payoff? I absolutely cannot put this money at risk, it is not my money. I just feel we are missing an opportunity to maximize our funds.......


Thanks

Good point. I am not sure what the reasoning was behind the loan. I can tell you that we have some issues that will eat thru the loan I believe, when we get the plan to address them. Problem is no one is still around that was in the room when the loan was taken out.

But I definitely see your point.

I was on my HOA finance committee until recently (resigned due to an a-hole t-sip attorney board member/chair who threatened legal action against residents for something stupid related to the new community playground)

Anyways, we had about the same amount of cash and kept our capital reserves in a short-term CD at BB&T bank. The interest was pretty pathetic so I tried to shop around but found out most places and especially the online banks can't accommodate HOA accounts for some reason, so we left it there.

Agree with the others though - why carry the loan?

I cannot believe that the homeowners have not complained about this;. Their assessments are being used to fund the interest on the loan.

The current board needs to correct the actions of the previous boards.

As stated, pay the loan off.

Have you asked the HOA's attorney?

That's a great idea. I will definitely ask, and will be sure to visit with other board members about just getting rid of the loan.


I appreciate the other perspectives. Very helpful.

As stated, you need to have a capital reserve but that should be funded from you annual fees, not a loan. Would look to pay off the loan and avoid interest.

We fund our reserve based off an engineering infrastructure evaluation. They look at all the infrastructure such as pools, tennis courts, roads, etc if they are owned by the HOA. That should be updated periodically. We do ours every 3 years. We plan our budget and annual increases to keep the reserve fund whole.

Note we live in a gated community so the roads are private and the HOA's responsibility. A big chunk of our reserve is for roads. If you live in a community where the roads are public then the city or county has the responsibility for the road.

If I were king of the world, the first thing I would do would be to outlaw gasoline golf carts. I'm talking about real golf carts, not the kind people drive around the neighborhood.

The second thing I would do would be to ban HOAs for eternity.

Can you just dissolve the POA and do everyone a favor?