Acting as an independent lender, HOA will provide the relatively risky, early stage loan assistance for due diligence, pre-development costs and land purchase down payments.
To facilitate project cash flow, repayment of the Project Loan is deferred until the first construction financing advance or sometimes even until sales closings. By choosing only to align with dedicated partners, and through comprehensive loan review criteria, HOA has had a high rate of successful projects and therefore a high rate of repayment of its loans, for what is a traditionally high risk/high loss type of lending.
HOA loans typically are secured through a mortgage on the underlying real estate.
The HOA project loan provided to early stage developments is critical to the launch of affordable housing developments by non-profit developers who often have very limited financial resources. By helping to level the playing field with larger for-profit developers, HOA is fostering the rebirth of the Ontario affordable housing development sector.
