Can a Florida HOA use a loan to fund reserves?

Yes, in some cases. Florida law now expressly allows certain condominium and cooperative associations to use a loan or line of credit as part of the funding method for required reserves and related capital expenses.

For boards researching hoa loan fund reserves Florida, the key change came through HB 913, which took effect July 1, 2025. The rules are specific, though. They don’t apply to every organization casually called an “HOA,” and using financing doesn’t erase the association’s reserve obligations.

This article explains who can use financing, what the law requires, how the process works and what boards should review before voting.

HOA loan fund reserves Florida: what HB 913 changed

Florida’s reserve rules became more demanding after the state expanded Structural Integrity Reserve Study (SIRS) requirements for certain condominium buildings. Associations subject to SIRS generally can’t simply vote to reduce or waive required reserves for covered components in the way some associations could in the past.

HB 913 added another way to meet those funding obligations.

Under Florida Statutes Section 718.112, reserves for specified components may be funded through:

• Regular assessments paid through the association’s normal budget.
• Special assessments collected for a particular funding need.
• Lines of credit that give the association access to required funds.
• Loans obtained by the association.

The statute further provides that a unit-owner-controlled condominium association required to obtain a SIRS may secure a loan or line of credit to fund capital expenses required by a milestone inspection or the association’s SIRS.

That change is why searches for terms such as hb 913 line of credit reserves have become more common among Florida board members and property managers. Financing can now be incorporated directly into the reserve funding framework for qualifying associations rather than being treated only as a separate source of project money.

HB 913 was approved in June 2025 and generally became effective July 1, 2025.

A loan doesn’t mean the reserve obligation disappears

This distinction matters.

An association isn’t necessarily replacing its reserve responsibility with debt. Instead, the loan or line of credit becomes one of the funding methods used to satisfy that responsibility.

Florida law requires qualifying financing to be sufficient to cover the applicable cumulative amount of previously waived or unfunded reserve funding and the requirements of the association’s most recent SIRS. Funding also must be immediately available for the board to use for required repair, maintenance or replacement expenses without another membership approval each time money is accessed.

That means a board shouldn’t think of the process as simply borrowing an arbitrary amount and calling the reserve requirement complete. The amount and structure need to correspond with the association’s actual reserve and capital obligations.

The SIRS itself may also need to be updated. Florida law says a study must consider the funding method being used, including regular assessments, special assessments, lines of credit or loans. If the study was completed before financing was approved, it must be updated to reflect the selected funding method and its effect on the reserve funding schedule.

“HOA” and “condo association” aren’t interchangeable under Florida law

The word HOA is often used broadly to describe any community association. Florida law treats different types of associations separately.

Chapter 718 governs condominiums. Chapter 719 governs cooperatives. Both now contain provisions allowing qualifying associations to use loans or lines of credit in connection with structural reserve obligations. Florida’s cooperative association reserve provisions include similar financing language.

Traditional homeowners associations governed by Chapter 720 have a different reserve framework. Section 720.303 contains its own rules for establishing, funding, reducing and using reserves. The specific HB 913 SIRS financing provisions discussed here shouldn’t automatically be applied to a Chapter 720 HOA.

Boards should confirm which statute governs their association before relying on any reserve-financing strategy.

Which associations can use a loan to fund required reserves?

The HB 913 financing provision is most relevant to unit-owner-controlled condominium associations that are required to maintain reserves based on a Structural Integrity Reserve Study.

Under current Florida law, a residential condominium association generally must obtain a SIRS at least every 10 years for each condominium building that is three habitable stories or higher, subject to statutory exclusions. Covered components can include the roof, structural systems, fire protection, plumbing, electrical systems, waterproofing, exterior painting, windows, exterior doors and certain other high-cost components whose failure could affect structural integrity or safety.

The financing provision isn’t unlimited. For example, the statute says the relevant loan and line-of-credit provision doesn’t apply to:

• Developer-controlled associations.
• Associations where nondeveloper unit owners have controlled the association for less than one year.
• Associations controlled by certain bulk assignees or bulk buyers.

Associations outside those categories still need to examine their declarations, bylaws, existing debt agreements and other governing requirements before borrowing.

Member approval is required

A board can’t simply execute a reserve loan on its own under this provision.

Florida law requires approval by a majority of the total voting interests of the association for a special assessment, line of credit or loan used under the applicable reserve funding provision.

That wording deserves attention. A majority of total voting interests is different from a majority of directors attending a board meeting or a majority of owners who happen to cast ballots.

Before scheduling a vote, boards should have association counsel confirm the voting procedure, notice requirements and any additional restrictions contained in the governing documents.

Required disclosures continue after the loan closes

Financing also becomes part of the association’s financial record.

The statute requires a special assessment, line of credit or loan used under the reserve provision, along with related information, to be included in the association’s annual financial statement. Relevant financing documents also have disclosure implications for prospective condominium purchasers.

Boards therefore need to consider more than whether they can make the monthly payment. Financing becomes part of the association’s longer-term financial position and should be documented accordingly.

How loans compare with other ways to fund reserves

Florida associations facing a reserve shortfall usually have several funding decisions to consider. The best structure depends on the size and timing of the need, existing cash, owner affordability, the SIRS funding schedule and the association’s broader financial condition.

Funding method	How it works	Main issue for the board to review
Regular assessments	Owners contribute through the annual budget over time.	Whether required contributions create a sustainable annual budget and whether money will accumulate quickly enough for scheduled work.
Special assessment	Owners are charged an additional amount for the reserve or project need.	How much owners must pay, when payments are due and how delinquencies could affect available cash.
Line of credit	The association obtains access to financing that can be drawn as qualifying expenses arise.	Availability of funds, borrowing terms, draw requirements, repayment obligations and compliance with statutory reserve requirements.
Association loan	The association borrows funds under agreed repayment terms.	Total borrowing cost, repayment source, owner assessments, existing debt and how the financing aligns with the SIRS funding schedule.

The fact that Florida law permits several methods doesn’t mean they produce the same financial result.

Regular reserve contributions avoid borrowing costs but may require higher ongoing assessments. A large special assessment can generate cash without long-term association debt but may put significant pressure on owners who need to pay within a shorter period.

A loan can spread the cost over a longer period, but the association takes on repayment obligations and financing costs. A line of credit may offer flexibility where expenses occur at different times, but boards still need to understand when funds become available, what triggers repayment and whether the arrangement meets the statutory requirements.

Associations considering debt can review TuCielo’s overview of association financing for Florida communities to understand how project and reserve financing can be structured. TuCielo currently offers financing for Florida condominium associations, HOAs and cooperatives, including associations dealing with reserve deficiencies.

A hypothetical reserve shortfall

Consider a condominium association that has completed its SIRS and discovers its current reserve plan doesn’t provide enough available funding for upcoming structural work.

Assume its updated study and funding schedule determine that $1.5 million of the required amount must be covered through financing after accounting for money already available. The association could evaluate whether a loan or qualifying line of credit can provide that amount while preserving enough cash flow to continue operations.

The board would still need to obtain the required owner approval. It would also need to make sure the financing is available when the covered repair, maintenance or replacement expenses arise and that the SIRS reflects the selected funding method.

The example doesn’t mean $1.5 million is the right amount for another community. Each association’s requirement depends on its own study, prior funding history, available reserves and project schedule.

How to fund reserves with a loan under the new rules

Associations considering financing should treat the process as a reserve-planning decision first and a lending decision second.

1. Confirm which Florida statute governs the association

Determine whether the property is a condominium under Chapter 718, cooperative under Chapter 719 or homeowners association under Chapter 720.

This determines which reserve rules apply. A board shouldn’t rely on a summary of HB 913 without first confirming that the relevant provision covers its association.

2. Start with the most recent reserve and inspection information

Review the current SIRS, milestone inspection reports, engineering reports and reserve schedule.

The financing request should be tied to identified obligations rather than a rough estimate of what the association believes it may need. Pay particular attention to unfunded or previously waived reserve amounts that may need to be included in the financing calculation.

3. Identify the actual funding gap

Separate the total reserve requirement from cash the association already has available.

Boards should understand:

• Current reserve balances.
• Required future contributions.
• Upcoming repair and replacement dates.
• Previously waived or unfunded amounts.
• Current special assessments.
• Existing association debt.
• The amount that must be accessible when work becomes due.

This produces a much more useful financing request than starting with a desired monthly payment and working backward.

4. Compare a loan, line of credit and assessment structure

A board may have more than one compliant way to address the shortfall.

Compare how much each approach requires from owners today, how repayment would affect future budgets and whether the funding is available when the SIRS says it will be needed.

For boards unfamiliar with association borrowing, TuCielo provides a separate explanation of how association financing works, including the financial, governance, insurance and project documents commonly reviewed during underwriting.

5. Update the SIRS when required

If the existing SIRS was completed before the association selected its special assessment, loan or line of credit, Florida law may require the study to be updated to reflect the selected funding method and the effect on the reserve schedule.

The association also needs an updated SIRS before adopting a budget when its proposed reserve funding doesn’t align with the funding plan in the most recent study.

This step is easy to overlook. The financing and reserve study shouldn’t operate as two independent documents.

6. Obtain the required owner vote

Prepare the proposed financing structure early enough for owners to understand what they’re approving.

The board should be ready to explain the borrowing amount, purpose, repayment source, expected effect on assessments and alternatives considered. Association counsel should review the notice, voting threshold and loan authorization process before the vote.

7. Document the financing and ongoing repayment plan

Once financing closes, the association still needs a workable budget.

Loan payments ultimately have to come from association revenue. Boards should model how repayment interacts with regular assessments, other reserve contributions, insurance, operating expenses and any outstanding special assessments.

The financing should also be included in the association’s required financial reporting and other disclosures where applicable.

What boards should review before choosing reserve financing

The legal ability to fund reserves with a loan answers only the first question. The harder question is whether the proposed financing structure works for the community.

How much financing is actually required?

Borrowing too little can leave a project or reserve requirement underfunded. Borrowing more than necessary can increase financing costs.

Use the SIRS, engineering scope, available reserve cash and scheduled expenses to define the need before requesting terms.

When must the money be accessible?

The statute requires qualifying financing to be immediately available for required expenses.

A board considering staged funding should confirm how the lender’s disbursement terms work and whether they satisfy the association’s obligations.

How will the association repay the debt?

The association is the borrower, but association revenue comes primarily from its members.

A board therefore needs to translate the proposed loan payment into the budget and owner assessment structure. Spreading a cost over time may reduce the immediate lump-sum burden, but owners are still ultimately funding the association’s repayment obligation.

Boards that want to understand financing from the directors’ perspective can review TuCielo’s association financing information for board members. TuCielo states that the association is the borrower and loan payments are made from association funds.

What happens to regular reserve contributions afterward?

A loan shouldn’t be evaluated only against today’s shortfall.

The updated reserve schedule may still require future contributions for components that weren’t fully covered by the financing or for later replacement cycles. Boards should look several budget years ahead instead of assuming a loan permanently solves the reserve question.

What existing debt does the association have?

An existing loan may affect underwriting, debt service and the association’s ability to take on another obligation.

Review current balances, maturity dates, payment schedules, collateral or pledged revenue and any restrictions in existing financing documents before approving new debt.

What will owners see when they sell?

Condominium buyers may receive association financial information, assessments and financing documents as part of the statutory disclosure process.

A board should expect the reserve strategy and association debt to remain visible beyond the current ownership group. Clear records make it easier for future boards, owners and purchasers to understand why financing was obtained and how it is being repaid.

Has the board compared total cost rather than only monthly cost?

A lower monthly assessment doesn’t necessarily mean a lower total cost.

Compare principal, interest, fees, required reserves or debt service accounts, repayment period and early payoff provisions. Ask how the financing would work if the association later wants to refinance or accelerate repayment.

For associations weighing a traditional lender against a specialized association financing provider, TuCielo also provides a comparison of association financing and traditional bank lending. Product terms and approval remain subject to the provider’s underwriting requirements.

Prepare a financing plan your board can explain

HB 913 gives qualifying Florida condominium and cooperative associations more flexibility in addressing major reserve obligations. A loan or line of credit can now be part of the statutory funding structure in circumstances where relying entirely on current reserve cash or a large immediate assessment may be difficult.

That flexibility comes with conditions. Boards need to confirm that the law applies to their association, use the current SIRS to identify the funding requirement, obtain the required owner approval and understand how repayment affects future budgets.

Because reserve compliance, governing documents and financing obligations can create significant legal and financial consequences, associations should have their attorney, reserve professional, accountant and other appropriate advisers review the proposed structure for their specific circumstances.

Florida associations that have already identified a reserve or capital funding gap can check their eligibility with TuCielo and provide basic information about the property and project for an initial financing review. TuCielo can then explain the association financing documents and underwriting information needed to move forward.

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