Is a reserve loan cheaper than a special assessment?

Not automatically. A loan costs interest but reduces delinquency risk, preserves owner liquidity, and spreads cost to future owners. Whether it is cheaper in practice depends on the rate, the term, and how much delinquency a one-time assessment would generate.

How is a special assessment allocated among units?

Allocation follows the percentage of ownership set out in the association's declaration. This calculator assumes an equal per-unit split for simplicity, so actual per-unit amounts will vary by unit size and ownership share.

Board Tool

Special assessment vs. reserve loan calculator

Enter your reserve funding gap and see the per-unit impact of a one-time special assessment beside a financed reserve loan.

Your association

Reserve funding gap to close

Number of units

Reserve loan interest rate

Loan term

years

Estimates only, assuming an equal per-unit allocation. Actual allocation follows your declaration's percentage of ownership, and lender terms vary. This tool is not legal or lending advice.

Comparison

One-time special assessment

$13,333

per unit, due on the board's assessment schedule

Financed reserve loan

$122

per unit, per month for 15 years

Annual per unit: $1,461
Total per unit over term: $21,909
Total interest to the association: $1,543,568

A loan almost always wins the monthly comparison and loses the total-cost comparison. The right answer depends on owner liquidity, delinquency risk, turnover, and how fast the gap must close.

What the calculator cannot tell you

Three variables that usually decide the vote.

Delinquency. A large one-time assessment raises non-payment, which shifts real cost onto paying owners. A five percent delinquency rate can erase a loan's interest disadvantage entirely.

Turnover. A loan spreads cost to future owners who benefit from the work. An assessment puts all of it on today's owners, including those planning to sell.

Ongoing contribution. Closing the accumulated deficit without raising the annual contribution simply schedules the same crisis for the next study cycle.

Common questions

Is a reserve loan cheaper than a special assessment?: Not automatically. A loan costs interest but reduces delinquency risk, preserves owner liquidity, and spreads cost to future owners. Whether it is cheaper in practice depends on the rate, the term, and how much delinquency a one-time assessment would generate.
How is a special assessment allocated among units?: Allocation follows the percentage of ownership set out in the association's declaration. This calculator assumes an equal per-unit split for simplicity, so actual per-unit amounts will vary by unit size and ownership share.

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Send the reserve study total, current reserve balance, unit count, and current annual contribution. We will model every funding path side by side for your board.

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