I’m from a strata lender, so naturally I’m going to say it’s a good thing. But basically the point of a strata loan is to stretch out the payments into quarterly levies, rather than a special levy. Using your example of $1.2m for 20 lots, a special levy is $60,000. A 10 year loan at 9% (you should be able to get cheaper than the rates you quoted), means a quarterly loan levy per unit of $2,280.
Another point is that some builders won’t commit unless the OC has the funds already (i.e. the special levy has been collected), or there is an approval letter from a strata lender.
Hopefully that’s helpful.