Housing company loan – three ways of financing a renovation in a housing company
OP’s financing products provide an affordable, secure and flexible way of financing a renovation in a housing company.Renovation in a housing company - OP’s housing company loan provides solutions for small maintenance work and more extensive renovations
Renovations that have been carried out professionally and at the right time are important for the housing company. From the viewpoint of shareholders, they improve the comfort of housing and the resale value of the flats. The majority of the wealth of housing company shareholders typically consists of flats they use as their home. For this reason, taking care of the buildings and maintaining their value is important. A housing company loan is an excellent way of financing renovations in a housing company.
Typical major areas of renovation include exterior walls, windows, plumbing and energy solutions. It pays to start planning large renovations in a housing company in good time. The shareholders’ meeting should decide how the renovations will be planned and whether they will be financed by taking out a housing company loan, which requires a resolution by the shareholders’ meeting.
A housing company can prepare for renovations in advance by collecting extra charges and transferring them to a fund. If renovations are postponed too long, the renovation costs may become unreasonably high in proportion to the housing company’s value. This in turn may cause problems in financing the renovations with a housing company loan.
OP offers solutions for financing small maintenance work and large-scale basic renovations and managing the day-to-day finances of housing companies.
Choose the financing that best suits your housing company
OP offers a variety of solutions to meet the financing needs of housing companies: housing company loan, green loan, or corporate account with credit facility. These financing options differ in terms of their purpose, loan term, interest rate and maximum amount of loan.
No matter the option you choose for your housing company loan, we always offer affordable, safe and flexible financing for your housing company’s needs.
Housing company loan for large and small investments
A corporate loan can be used to finance large-scale purchases and modernisations in a housing company. Corporate loans are especially suitable for long-term investments. Detailed terms of the loan are always agreed individually with each housing company, and the final cost of the loan depends on matters such as the loan term and collateral and the housing company’s financial situation.
To speed up the processing of your housing company loan, include at least the following appendices in the financing application:
- official financial statements for the past two years,
- a budget for the current or following year,
- a shareholder register with address details,
- the housing company's energy performance certificate,
- maintenance plan, and
- a recent house manager’s certificate
We will adjust a suitable loan term and instalments to ensure that the costs of servicing the loan do not place undue burden on the housing company. The price of the loan consists of the interest (reference rate + margin) and management and drawdown fees for the corporate loan.
Green loan and EIF guarantee are suitable for energy efficiency renovations
Our sustainable financing solutions are the right choice for your housing company if you are planning projects such as an energy efficiency renovation, new energy efficient construction, use of renewable energy sources or the building of charging stations for electric cars.
You can finance your project by, for example, applying for our green loan or using our EIF guarantee.
A credit facility ensures financing for housing company renovations when needed
Corporate account with credit facility is a limit-type financing solution, in which financing is easily available whenever the need for additional funding arises.
The maximum amount of financing is agreed when granting the loan, and drawdowns do not require the signing of separate promissory notes once a contract is made on the credit limit. The extent and pricing of the credit facility is always agreed on a case-by-case basis.
Limit-type financing can be used during a plumbing renovation or other basic renovations; for example, when expenses are accrued for payment over a longer period of time. Costs incurred during the renovation are covered flexibly by the funds withdrawn from the limit. As the renovation is completed and the total expenses become known, the used limit is converted to a long-term housing company loan which can then be paid off.
The price of a corporate account with credit facility consists of the reference interest rate, a margin and a credit facility commission.
Loan alternatives for small housing companies
We cannot offer housing company loans to small housing companies of only a few shareholders. This is to avoid situations where the liability of individual shareholders of a joint loan becomes too great. Small housing companies can finance renovations by applying for a personal loan for each shareholder, for example. In most cases, financing for housing companies with fewer than five housing units is done using personal loans taken out by the shareholders.
A personal loan is a safer option for shareholders of a small housing company, as each shareholder is thus only liable for their own loan. In the case of a housing company loan, all shareholders are jointly liable for the loan until it is repaid in full.
Protect your housing company against rising interest rates
A housing company loan is a handy way to finance modernisations, but as with all financing, it comes with the risk of rising interest rates. Through the charge for common capital expenditures, any changes in the loan interest rate will directly affect the total debt burden of individual shareholders of the housing company. For this reason, it is a good idea to accumulate a buffer against rising interest rates. By opting for interest rate protection for the housing company loan, you ensure that rising reference interest rates will not increase the financing charges collected from shareholders.
Thanks to the protection, the housing company can know the amount of future interest expenses in advance, which helps in planning the company’s finances ahead. It also protects future financing charges against rising interest rates while ensuring a flexible repayment scheme, including the opportunity for additional payments by shareholders, and repayment holidays.
Sample clauses
A loan taken out by a housing company always requires a resolution by the shareholders' meeting. We have listed sample clauses approved by the bank that you can use in the minutes of the shareholders' meeting. Please note that the housing company is responsible for making sure that the meeting minutes match the decisions that have been made in the meeting. This means that you may have to modify the sample clauses.
Please note that the minutes of the shareholders' meeting and extract of the minutes submitted to the bank must also contain the following entries:
- Call to order of the meeting
- Establishing the quorum of the meeting
- Closing of the meeting
- Signatures of the chair, secretary and reviewers of the minutes.
If the original copy of the minutes or extract of the minutes is not submitted to the bank, the copy must be certified as true. If the shareholders' meeting authorises the board to agree on taking out financing without the approval of the shareholders' meeting, please also submit the minutes of the board meeting containing the appropriate entries listed above.
