Lenders are excluding Coops, Condos and HOAs from the Paycheck Protection Program
This is a follow up from our article on April 3rd about the Paycheck Protection Program (“PPP”). Read the article.
Our observation then that it did not seem that the PPP was going to apply to coops, condos and HOAs, is turning out to be true. Some people in the industry still feel that the PPP should apply and are likely going to lobby for a change but for the time being it seems that community associations are excluded.
For example, the National Cooperative Bank’s (NCB) website (https://www.ncb.coop) specifically provides now that “Unfortunately, housing cooperatives, condo associations, and homeowner associations are not eligible for this program.”
Stay tuned for more, but for the time being it seems that managers and boards who were gearing up to apply for their associations will not be able to do so for the time being.
The Treasury Department has not yet officially said that community associations are not eligible for PPP, but as we explained in our article last week, it does not seem that community associations would be eligible. Now that lenders are speaking on this issue, the lobbying for community associations is sure to follow to try to change things. While the PPP may not end up applying to them, other programs may open up for community associations; particularly ones struggling with labor expenses like any small business. We often say that community associations are small businesses which should be governed as such by their boards, the government should acknowledge this reality and open programs to help them.
As previously suggested, if such programs become available, coops, condos and HOAs should get ready now and make sure that their governing documents allow their boards to participate in the programs without first obtaining owner approval. Reviewing your governing documents now to anticipate and address any such hurdle is a good idea because some programs like the PPP have limited funding which may be on a first come, first serve basis. Be ready or you may lose out on a limited opportunity.
