OVERVIEW

Deficit Funding provides Community Associations with a variety of innovative strategic, financial and operational solutions that are implemented through common sense communications between the Board, Management and the membership whose interests they serve.

Through the adoption and implementation of Deficit Funding’s recommended strategies, Community Associations can ensure the uninterrupted provision of at least the essential Annual Operating Budget expenses in difficult economic times, and at best, all Annual Operating Budget expenses in more stable and expansionary economies.

There is no need to look further for answers on how to keep your Association’s budget viable and properly funded through uncertain economic times. The strategic solutions that we recommend are the result of an overall economic and financial review of your Community’s present financial situation, as well as the present status of the economic markets.

We invite you to review the information on our website to learn more about who we are and what we do. However, we strongly encourage you to use the link below to schedule a complimentary video or telephone conference with one of the company’s representatives so that we may learn more about your Community, as well as its concerns, needs and goals for the coming months and years ahead.

"There is no risk or cost to your community to find out if you qualify for the Deficit Funding program but there is incredible upside."

If you live in one of Florida’s more than 60,000 shared ownership communities and your board allows your neighbors to slide on paying their fair share of the association fees, you will have to pick up the slack. If delinquencies creep too high, the ability of both the association and the individual owners to obtain financing becomes questionable, home values and sales decline and community morale suffers.

No one enjoys being the bad guy, but if an HOA, condominium or cooperative association allows too many members to fall behind on their dues, the association will come up short on funds for essential community services, maintenance, repairs and improvements. Worse yet, it may become extremely difficult for home seekers to purchase in these communities. Arguably, boards who fail to timely and uniformly collect 100% of the association assessments are in breach of their fiduciary duty to the membership.

Lenders have traditionally avoided communities with high delinquency rates but that is never truer than it is today. Fannie Mae, Freddie Mac, and the FHA have all released guidelines which make it clear that they will not guarantee loans to condominiums where more than 15% of the owners are 30 or more days delinquent. High delinquency rates put a lot of pressure on associations to meet their obligations to the home owners who are still paying their fair share. When some owners—including banks that have foreclosed on homes and now own them—don’t pay their share, other owners must make up the difference either in the form of higher regular or special assessments.

Even if only just a few association members stop paying their association fees, the impact on an association’s budget can be very detrimental. According to the U.S. Census Bureau, the annual median fees for single-family homes are $420 and $2,400 for condominiums.

Association delinquency rates have more than doubled since 2005. The Community Associations Institute (CAI), a 28,000-member industry group representing boards, managers and other professionals. released data that 65% of associations currently have delinquency rates exceeding 5%, up from just 19% of associations in 2005. More than 30% have delinquency rates exceeding 10%, and for one in 10—or close to 30,000 associations—the rate is more than 20%. An association’s assessment stream is the lifeblood that funds essential community services and amenities such as security, pools, clubhouses, tennis courts, landscaping, insurance, and utilities.

Not surprisingly, underfunded associations are forced to cut corners which can result in both inferior aesthetics and risky decisions to underinsure.

Deficit Funding represents a practical and comprehensive approach to eliminating forever an association’s concerns about collecting less than 100% of the association’s assessments.