Paying for Work
How do you find the money to get on top of the repairs? We can help you and the board with the decisions you need to make about saving and borrowing. If there are grant opportunities, we will look for those too.
Some co-ops may discover through the AMP or capital plan that they have enough in the reserves to address their capital needs. However, most co-ops will likely discover that they cannot address needed repairs without an injection of cash to get started. The AMP will show you how to combine the capital replacement reserve with a new mortgage to address renovations.
Potential borrowers approaching a lender will need to answer three basic questions in their proposal: Can we afford to pay back the loan (debt coverage assessment), what the security for the lender is (value of the property), and what is your plan to deal with repairs while the lender has the investment at the co-op (asset plan).
In addition to answering these basic questions, borrowers will need to assemble a formal loan package. This will include many documents and reports and a package that meets the lenders criteria. A current BCA, a reserve forecast, and an asset plan will be needed prior to putting your proposal together. Without assistance this may prove to be a challenge for most co-ops. Realizing this, CHF Canada has put together a financing program that co-ops across Canada have used successfully.