A community initiative grant can help homeowners associations that are struggling financially. These grants are awarded to communities that meet the eligibility requirements. Board members must do their part by looking for available grants, researching qualifications, and putting together a convincing proposal.
What is a Community Initiative Grant?
Simply put, a community initiative grant is a financial support program designed to fund specific improvements within an HOA or condominium. Common examples of improvements include upgraded lighting, safer playgrounds, and sustainable landscaping.
There are several possible sources of grants for HOAs. It can come from government funding at both the federal and state levels. Local municipalities or counties can also provide grants. Other than that, private companies also have initiatives for community development.
Unlike loans, grants are awarded without strings. Associations don’t need to repay the amount, and grants don’t come with interest either. This type of funding offers direct financial support for specific projects, improvements, or needs.
That said, because grants require a lot of effort, and there’s no guarantee that an association will win them, many communities don’t bother applying in the first place. But with the right preparation, boards can assemble competent proposals and secure funding without raising dues.
Is There a Grant for Community Associations?
More often than not, grants serve nonprofit corporations, medical research, and educational purposes. Of course, that does not mean there isn’t a grant for neighborhood associations. Here are the possible grants associations can secure.
1. Homeowner Assistance Fund (HAF)
The Homeowner Assistance Fund, founded under the American Rescue Plan, is designed to help homeowners affected by the COVID-19 pandemic. Each state has its own funding and must manage the resources properly. While the HAF primarily helps with unpaid mortgages and utilities, some states extend this support to homeowners who have overdue HOA fees.
2. City of Laurel’s Community Initiative Grant Program
In Maryland, the City of Laurel has a community initiative grant program designed specifically for incorporated HOAs. This program can fund items such as playground equipment, recreation areas, and community facility upgrades. Associations can apply directly without jumping through extra hoops.
3. Chesapeake Bay Trust Grants
The Chesapeake Bay Trust grants allow homeowners associations to apply for projects such as landscaping, stormwater improvements, and community environmental projects. Funding can range from smaller grants to larger awards.
4. Community Development Block Grants
State-level Community Development Block Grants (CDBG) fund infrastructure, neighborhood improvements, and housing and community upgrades. That said, HOAs usually can’t apply directly.
Funds typically go to nonprofit organizations, counties, and cities. To access funding, associations must partner with their local government or get their projects included in government funding plans.
5. Open Space Grants
The Maryland Program Open Space funds improvements or projects that must be open to public use. Funding works well for trails, parks, and shared green spaces. Associations can’t directly apply for this grant. Instead, they must partner with a county or municipality.
How to Apply for a Community Initiative Grant
The key to securing a community initiative grant is to assemble a thorough, well-researched proposal. Volunteer board members don’t always know the first steps to take. While hiring a professional is recommended, there are some simple strategies boards can implement.
Here’s how to apply for an HOA community grant.
1. Review Requirements
First, board members must determine if the association is eligible for the selected community initiative grant. Some grants specifically address HOAs or condominiums, but others require communities to partner with the local government. It is important to verify the requirements before proceeding.
2. Focus on Specific Grants
Not all grants serve the association’s needs. If a grant is designed for walking trails and parks, for instance, an association that doesn’t have such amenities won’t need it.
Board members should narrow down their choices and focus on grants that support their initiatives. This way, the board can avoid wasting time on grants they don’t need.
3. Gather Supporting Data
Next, board members must organize the data into a clear, presentable format. When reviewing applications, programs typically look for certain information. These include financial reports, membership lists, reserve summaries, and neighborhood demographics. Information gathered from these documents will inform the reviewers’ decision.
4. Write a Grant Letter
To secure a community initiative grant, HOA boards must write a strong grant letter. Begin with a brief overview of the association, then move on to the purpose of the application. What does the association hope to accomplish with the funds? What challenges or projects will the grant address? How will the project benefit the community?
From there, the board should outline the project’s objectives. Make sure to use measurable metrics to determine results. Of course, no good proposal should ever be without a detailed plan. This plan should outline the project’s strategies and timelines.
Finally, the letter should include a comprehensive breakdown of the project’s budget. This includes an itemized list of expected costs and other sources of funding (if any).
5. Track Expenses
If the association wins the grant, the board will then receive access to the funds. Work doesn’t stop here. Board members must monitor where the grant money is going, as most providers require detailed reports or audits. Boards must keep track of all invoices, expenditures, and receipts.
Other Options for Funding
An HOA community grant program isn’t the only source of funding for associations. There are other ways to generate revenue without relying on dues and assessments. Common examples include organizing a fundraiser, asking for donations, getting a loan, renting out amenities, and installing vending or laundry machines.
1. Organize a Fundraiser
Associations can raise funds by planning events such as fairs, auctions, and car washes. Boards can even organize a grand raffle to encourage people to participate and buy tickets. Fundraising events not only increase revenue, but they also bring neighbors and community members together.
2. Ask for Donations
Associations can raise funds by asking for donations. Of course, as the word suggests, these donations should be entirely voluntary. Boards can turn to local businesses, charity organizations, and even homeowners themselves. When asking for donations, make sure to detail what the money will be used for and how the project will benefit the community at large.
3. Get a Loan
Associations can turn to a bank or lending company for capital expenditures or urgent needs. Of course, loans must be repaid over time, so the board will still have to raise dues or levy special assessments at some point. Still, loans give associations access to immediate funding.
4. Rent Out Amenities
Rentals are a great source of revenue for associations. Boards can rent out amenities, such as swimming pools, clubhouses, and even green spaces, to both residents and non-residents.
5. Install Machines
Vending machines and coin-operated laundromats are strong candidates for passive income. Of course, boards would have to coordinate inventory and operations, but the added work can be well worth the effort, especially in larger communities.
A Great Source of Revenue
A community initiative grant can boost an association’s cash flow without huge trade-offs. While grants specifically for HOAs are limited, there are many others that associations can indirectly access by partnering with local governments or organizations.
Majerle Management, Inc. provides financial services to HOAs and condo associations in Maryland. Call us today at (301) 220-1850 or contact us online to get started!
RELATED ARTICLES: