Condo Boards: Private Lending as Special Assessment Alternative

A special assessment sounds simple on paper: the association needs money for a repair, so it divides the cost across all owners. In practice, the vote can take months to organize, and some owners genuinely cannot come up with their share on short notice. Jack Miller, principal at Gelt Financial, has closed loans for associations nationwide and says most boards default to special assessments simply because it is the option they know. Gelt is one of the few private lenders that finances associations directly, an area Miller says has almost no competition because most lenders are not set up to underwrite this type of deal at all.

Unlike a mortgage on an individual property, an association loan is not secured by real estate. There is no traditional collateral and no personal guarantees from board members or owners. Instead, the loan is secured by the association’s ability to pass a special assessment or raise condo dues to repay it over time. That structure means the association is borrowing against its own income stream, not the building itself. Once the loan closes, the board typically still passes an assessment, but instead of collecting a large lump sum from every owner at once, repayment is spread out and the immediate repair gets funded right away.

The biggest obstacle Miller sees is not financial but personal. He described a recent case involving two elderly board members, ages 88 and 92, who served as president and treasurer of a 40 to 50 unit association. Both were retired schoolteachers reluctant to raise dues because they knew every homeowner personally and did not want to ask neighbors for more money. Miller’s response was direct: if you own your home, repairs need to get done regardless of how uncomfortable the conversation is. Boards that avoid raising dues often end up with a bigger problem later when a roof leak or failed window becomes an emergency. Not every association needs outside financing; some owners can fund their share directly. But private lending makes the most sense when the board needs the repair funded now and cannot wait for a lump sum assessment to clear. Gelt cannot help every association—deals with existing debt typically do not work, and associations that let problems grow too large sometimes need more repair work than makes economic sense to finance. Miller advises boards to plan major repairs a year in advance and build relationships with traditional lenders first, since that financing is typically cheaper. Gelt Financial LLC is a national private lender and distressed debt buyer with over 37 years of experience across commercial and investment real estate, operating in 37 states.