What’s Your Association’s PARScore?
By DeBat Media News Service
June 2, 2014

CHICAGO—Is your condominium or homeowners association up to par? Now, a new scoring model—the “Private Association Rating”—or PARScore—can give buyers and owners inside information on the quality of a targeted community.

“PARScore is a revolutionary new fact-based, data-driven analytics process that evaluates the quality and credit worthiness of more than an estimated 324,000 homeowner associations across the United States,” said Sara E. Benson, CEO of Association Evaluation, LLC, a Chicago-based real estate data-analysis firm.

“Association Evaluation breaks the cycle of purchasing, lending and insuring in risky homeowner and condominium associations by identifying the best-run associations,” noted Chicago real estate attorney Jay Zabel.

The Association Evaluation Viability Study analysis of the data will result in a PARScore rating. The highest achievable PARScore rating will be 900 and will indicate the most creditworthy and healthy associations.

Lower ratings will reflect associations with the following problems:

  • High assessment delinquencies;
  • Excessive foreclosure rates;
  • Excessive non-owner occupancy rates;
  • Pending lawsuits;
  • Low financial reserves;
  • Known unabated health hazards (mold, radon, lead, etc.)

Association Evaluation, LLC, utilizes the results of the report to assign a Private Association Rating (PARScore) to homeowner associations for use by home buyers, lenders, private mortgage insurance companies and insurance carriers in order to minimize loan-default risks and claims risks.

“Transparency, when applied broadly, levels the playing field for all,” said Benson.

“That’s what PARScore is all about,” said Zabel. “Teams have conducted more than 100 PARScore field studies in Chicago. The results were shocking in terms of inspecting the associations and identifying troubling data.”

Today, one in five Americans—an estimated 63.4 million residents—live under the rule of a homeowners association (HOA), which includes condominiums, cooperative apartments and many multifamily and single-family residences.

Nationwide, a total of 25.9 million homes are governed by homeowner associations, and more than 2 million people serve on association boards across the country, according to the Community Associations Institute (CAI).

An estimated 90-percent of these associations are self-governed. According to Evan McKenzie, author of “Beyond Privatopia: Rethinking Residential Private Government,” one point cannot be overemphasized: “The entire institution of common interest housing rests on the volunteer directors, yet they are unpaid, untrained, often unqualified, and almost entirely unsupported by the governments whose work they often are doing.”

Often these directors struggle with balancing their own check books, and are overwhelmed with managing their share of an industry with budgets estimated at $90 billion a year.

A September 2011 survey conducted by the Community Associations Institute (CAI) found that more than half of the nation’s homeowner associations now face “serious financial problems.” In 2013, 72 percent of association-governed communities were underfunded, according to Association Reserves, a California-based company that helps associations with budget and operational issues.

“A problem is emerging,” noted McKenzie. “Significant numbers of community interest housing developments are failing to carry out their basic responsibilities or becoming insolvent.”

Through a proprietary algorithm, PARScore provides a standardized rating between 400 and 900. Financially healthy and well-run associations will receive higher ratings while risky associations plagued with low bank balances, non-paying owners, special assessments and lawsuits will receive lower ratings, Benson explained.

“PARScore turns guesswork into facts and empowers purchasers, lenders and insurance companies in their decision-making process,” Benson said. “PARScore reduces risk and liability to all involved parties.”

Through the Private Association Rating (PARScore), Association Evaluation transforms the home-buying experience by bringing comprehensive data-driven, real-time analysis to consumers. Transparency, clarity, accountability and credit worthiness for community associations nationwide will be provided to all homeowners, according to the LLC’s mission statement.

Mortgage lenders, community banks, private mortgage insurance companies, and credit unions will see value in the PARScore, predicted Kerry A. Pastore, Chicago-area manager of Stonegate Mortgage, a major mortgage banking firm. “The PARScore cuts paperwork and streamlines the loan-approval process. It’s like a home inspection targeted to the condo association,” he said.

“PARScore is like an insurance policy for lenders,” noted Pastore. “A mortgage company can qualify a borrower, but what if the borrower’s condo building doesn’t qualify? PARScore certifies the condo association’s facts and data for the loan underwriter. The field inspector will prove that the property is safe, sound and sanitary.”

Association Evaluation’s principals asked veteran banker Edward J. Kane to participate in an off-the-record think tank, and briefed him on how ParScore works.

“When a lender makes a condo loan he really says: ‘It’s my condo.’ But once the loan is sold to Fannie Mae the lender doesn’t own the loan and could care less what happens to it unless he continues to service it,” said Kane, a third-generation banker who was executive vice president of a privately owned community bank in Chicago for more than three decades.

Association Evaluation is focusing on what is pertinent for living in and owning a condo, Kane said. “PARScore evaluates the overall experience of living in the building and its finances—and provides this information to the banker making the loan.”

Kane believes most real estate appraisals in condo buildings are weak. “PARScore asks serious questions. If the building was built in 1929, when was a new roof last installed, or tuck-pointing done? When were the windows resealed or replaced?” Kane said. “PARScore puts meat on the bones of an incomplete appraisal. You have everything covered—by category and rank. It’s a slam dunk.”

Kane predicted that PARScore is destined to become an industry standard, holding deals together for lenders, Realtors, buyers and sellers. “It fills the void, the dark space in the building. PARScore lights the shadowed hallways in every condo and homeowners association in Chicago and across the nation.”

PARScore is a registered trademark, patent pending and fully insured. For more information on the PARScore, call Association Evaluation, LLC, at 844-PAR-SCORE (844-727-7267), or visit:

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Association Evaluation® and The PARScoreTM and their related logos are trademarks or registered trademarks of Association Evaluation LLC in the United States and in jurisdictions throughout the world. The PARRegistry, PARReport report and PARScoreTM rating system are patent pending, fully insured and strictly enforced.