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Loading...Loading...A homeowners association (HOA) is a private group that runs a neighborhood by charging homeowners fees and making sure that everyone follows the rules that are meant to keep property values and common areas in good shape.
A homeowners association is an organized body that manages a shared residential community. When you buy a home in an HOA-governed neighborhood, you automatically become a member. Membership comes with responsibilities: paying regular fees, following the community’s rules, and abiding by a set of governing documents that outline how the neighborhood operates.
HOAs exist in planned subdivisions, condominium complexes, townhome developments, and some cooperative housing communities. The basic idea is that homeowners pool resources to maintain common areas, fund shared amenities, and enforce standards that keep the community consistent. That means things like landscaping in shared spaces, pool maintenance, exterior upkeep, and even architectural guidelines for individual homes.
The Foundation for Community Association Research estimates there are roughly 369,000 community associations in the United States, encompassing about 77 million residents and 28.8 million housing units. That’s roughly a third of all U.S. housing. The number has grown steadily over the past several decades. In 1970, there were only about 10,000 associations nationwide. The growth reflects a broader shift in how residential communities are developed and managed.
The trend is accelerating. According to U.S. Census data, about 67% of newly completed homes are now part of HOA communities. That’s up from 49% just over a decade ago. In the southern and western United States, the numbers are even higher, with over 70% of new construction in the West falling under HOA governance. If you’re shopping for a newer home, there’s a strong chance an HOA comes with it.
For home buyers, the presence of an HOA adds a layer of consideration. It’s not just about whether you like the house. It’s about whether the community’s rules, fees, and governance structure fit your lifestyle and budget. I’ve seen this come up repeatedly in the mortgage process. Buyers get excited about a property and then realize the monthly HOA fee changes their affordability math. The smart approach is to understand what you’re signing up for before you make an offer.
HOAs operate under a set of governing documents that function like a small-scale legal framework. The three main documents are the declaration of covenants, conditions, and restrictions (CC&Rs), the bylaws, and the rules and regulations. Together, these define what homeowners can and can’t do, how the association is governed, and how money is collected and spent.
The CC&Rs are recorded with the county and apply to every property in the community. They cover things like architectural standards, land-use restrictions, and the obligations of both the association and its members. The bylaws govern the internal operations of the HOA itself: how the board is elected, how meetings are conducted, and what authority the board holds. Rules and regulations are the day-to-day policies that can change over time through board action or member votes.
An elected board of directors runs the association. These are volunteer homeowners, not professional administrators, though many HOAs hire a professional management company to handle daily operations. Nationwide, between 60,000 and 65,000 community managers and roughly 9,000 to 10,000 management companies support HOAs, while an estimated 30% to 40% of associations remain entirely self-managed. Board members set the annual budget, approve expenditures, enforce rules, and make decisions about maintenance and improvements. Members of the community can attend board meetings, vote on major issues, and in most cases run for a board seat themselves.
From an operational standpoint, the process is straightforward. The board sets a budget each year that covers anticipated expenses. Those expenses are divided among homeowners through regular assessments, which is the formal term for HOA fees. If something unexpected comes up, like a major roof repair on a shared building or storm damage to common areas, the board may issue a special assessment to cover the additional cost. AmeriSave recommends that buyers understand both the regular assessment amount and the association’s track record with special assessments before committing to a purchase.
HOA fees fund the services and maintenance that keep a community running. The specific coverage depends on the type of community and the amenities it offers, but most HOA budgets include a few common categories.
Shared space maintenance is the largest expense for most associations. That includes landscaping for common areas, snow removal, parking lot upkeep, exterior lighting, and general grounds maintenance. In condo communities, it often extends to building exteriors, hallways, elevators, and roofing. Amenities like pools, fitness centers, clubhouses, tennis courts, and playgrounds all carry ongoing costs for staffing, cleaning, repairs, and insurance.
Insurance is another significant line item. Most HOAs carry a master insurance policy that covers common areas and shared structures. In a condo association, this typically covers the building’s exterior and common elements, while individual owners carry a separate policy for their unit’s interior. Trash and recycling collection, water and sewer service for common areas, and security services like gated entry or on-site patrols round out typical HOA budgets.
Well-managed HOAs also set aside a portion of annual fees into a reserve fund. This reserve covers large, planned expenses like repaving roads, replacing a community pool liner, or repainting building exteriors. A healthy reserve fund means the HOA is less likely to hit homeowners with surprise special assessments down the road. The general guideline is that a responsible association keeps its reserve at 70% or more of projected replacement costs.
HOA fees vary widely. For single-family homes, typical monthly fees fall between $200 and $300. Condominiums and townhomes tend to run higher because the association covers more shared infrastructure, including building maintenance and sometimes utilities. The U.S. Census Bureau reports the national median condo or HOA fee at around $135 per month, though this figure includes communities across the full price spectrum.
Location is the biggest variable. HOA fees in urban high-rises in cities like New York or Boston can exceed $500 or even $1,000 per month. A suburban single-family HOA here in Louisville might run $100 to $250. The amenities, age of the community, and financial health of the association all factor in. An HOA with a resort-style pool, fitness center, and 24-hour security will charge more than one that covers basic landscaping and a community mailbox area.
Here’s what this looks like over time. A $250 monthly HOA fee adds up to $3,000 per year. Over a 30-year mortgage, that’s $90,000 in HOA payments alone, not accounting for annual increases. Most associations raise fees periodically to keep pace with inflation and rising maintenance costs. When you’re calculating how much home you can afford, AmeriSave recommends including the HOA fee alongside your mortgage payment, property taxes, and insurance. All four components make up your true monthly housing cost.
The covenants, conditions, and restrictions document is the backbone of any HOA. It’s a legally binding contract that runs with the property, meaning it applies to every owner regardless of when they purchased. You don’t agree to CC&Rs separately. When you buy the home, you accept them.
CC&Rs cover a broad range of topics. Architectural controls dictate what you can build, modify, or change on the exterior of your home. That might include paint colors, fencing styles, roof materials, driveway surfaces, and even the size of a storage shed. Land-use restrictions specify how properties can be used. Most CC&Rs prohibit running a commercial business from your home, limit the number of rental properties in the community, and restrict short-term rental platforms.
Maintenance obligations outline who is responsible for what. In a condo community, the HOA typically handles everything outside your unit’s walls. In a single-family HOA, you maintain your home and yard, but the association may set standards for how you do it. Pet policies, vehicle parking rules, noise restrictions, and holiday decoration guidelines are also common CC&R provisions.
The specifics vary from one HOA to the next, but certain rules show up frequently. Exterior appearance standards are among the most common. These might require homeowners to get approval before repainting, adding a fence, installing solar panels, or making changes to the home’s exterior. Lawn and landscaping requirements are popular in single-family HOAs. Some associations mandate specific grass types, require regular mowing, or restrict the kinds of trees and shrubs you can plant.
Vehicle rules often limit where you can park recreational vehicles, boats, or commercial trucks. Many HOAs require that vehicles be parked in garages or driveways rather than on the street. Noise and nuisance policies set quiet hours and establish standards for behavior that affects neighbors. Rental restrictions limit whether owners can lease their homes and, if so, under what terms. Short-term rental restrictions have become increasingly common as vacation rental platforms have grown.
What really matters from a practical standpoint is enforcement. Some HOAs enforce rules loosely, with a friendly reminder for a first offense. Others are aggressive about fines and can levy penalties that accumulate quickly. Before buying in an HOA community, ask how the association handles enforcement. Request a copy of the fine schedule and any recent violation reports. That tells you a lot about the community’s culture and whether it matches your expectations.
Not all HOAs look the same. The structure and scope of the association depend on the type of housing involved.
Single-family HOAs govern planned subdivisions where each homeowner owns their home and lot. The HOA maintains common areas like neighborhood parks, walking trails, and entrance features. Individual homeowners handle their own property maintenance within the guidelines set by the CC&Rs. These associations tend to have lower fees since the shared maintenance burden is smaller. Single-family HOAs are the most common type, representing roughly 60% of all community associations in the country.
Condominium associations manage multi-unit buildings or complexes. Because condo owners share walls, roofs, and building systems, the association’s responsibilities are broader. Condo HOAs typically cover exterior building maintenance, hallways, elevators, parking structures, and shared utilities. Fees tend to be higher to reflect that expanded scope. AmeriSave processes loans for condo purchases, and our team can help you understand how condo-specific HOA costs factor into your qualification.
Townhome associations fall somewhere in between. Owners usually own their unit and the land beneath it but share walls with neighbors. The HOA may cover exterior maintenance, roofing, and common areas while leaving interior maintenance to individual owners. Fees tend to land in a middle range, reflecting that split of responsibilities.
Cooperative housing, or co-ops, operates differently from a traditional HOA. In a co-op, you don’t own your unit outright. Instead, you buy shares in a corporation that owns the entire building, and those shares come with the right to occupy a specific unit. Co-ops charge a monthly maintenance fee similar to HOA dues, but the financial structure and approval process for buyers differ significantly. Co-ops make up a small percentage of community associations nationwide, roughly 2% to 4% according to the Foundation for Community Association Research.
Lenders consider HOA fees when they evaluate your mortgage application. The monthly fee is added to your projected housing costs, along with your mortgage principal, interest, property taxes, and homeowners insurance. That combined figure is used to calculate your front-end debt-to-income ratio. A higher HOA fee means your qualifying mortgage amount may be smaller, all else being equal.
Let’s walk through a quick example. Say you’re looking at a home with a $1,800 monthly mortgage payment, $350 in property taxes, and $150 in homeowners insurance. That’s $2,300 per month before the HOA. Add a $300 monthly HOA fee, and your total housing cost jumps to $2,600. If a lender caps your housing ratio at 28% of gross income, you’d need a gross monthly income of at least $9,286 to qualify for that scenario. Without the HOA fee, the same ratio requires $8,214. That $300 difference in the HOA fee translates to roughly $1,072 more in required monthly income.
For condo purchases specifically, lenders also evaluate the HOA itself. They review the association’s financial health, reserve funds, insurance coverage, litigation history, and the percentage of units that are owner-occupied versus rented. If the HOA doesn’t meet certain standards, some loan programs may not be available. This is especially relevant for FHA and VA loans, which have specific condo project approval requirements. AmeriSave’s team can walk you through how a particular HOA’s financial profile affects your loan options.
Budget for increases. HOA fees are not fixed. Most associations raise fees annually, and some adjust them significantly after completing reserve studies. A reserve study is a professional assessment of the HOA’s physical assets and the estimated cost to repair or replace them over time. If the study reveals underfunding, the board may raise fees or issue a special assessment. When I talk with buyers going through the mortgage process, I always suggest they ask for the last three to five years of fee history. That gives you a realistic picture of how fast costs are rising.
Property value protection is the benefit that gets cited most often. Research from the Cato Institute found that homes in HOA communities tend to be valued 5% to 6% higher than comparable homes outside of an HOA. The consistent maintenance standards, shared amenities, and community governance all contribute to that premium. Homes in community associations collectively represent about $12.9 trillion in property value, according to the Foundation for Community Association Research.
Shared amenities are another draw. Depending on the community, you might have access to a pool, fitness center, clubhouse, tennis courts, walking trails, playgrounds, and more. The cost of building and maintaining these facilities is spread across all homeowners, making them more affordable than installing and maintaining similar features on your own property.
Maintenance delegation reduces your workload. In condo and townhome communities, the HOA handles exterior maintenance, landscaping, and often snow removal. For homeowners who travel frequently, work long hours, or simply prefer not to spend weekends on yard work, that’s a meaningful benefit. My wife and I have three kids under ten. I understand the appeal of having someone else handle the landscaping while we’re at soccer games on Saturday mornings.
Community standards also help prevent the kinds of neighbor disputes that can make homeownership stressful. When everyone operates under the same rules, there’s a framework for addressing issues like excessive noise, unkempt yards, or unauthorized construction. The Foundation for Community Association Research’s satisfaction survey found that 94% of community association residents get along with their immediate neighbors. That number suggests the structure is working for most people, even if it doesn’t make headlines the way HOA horror stories do.
The most common complaint is cost. HOA fees are an ongoing expense that doesn’t build equity or go toward paying down your mortgage. They can increase annually, sometimes by 5% to 10% or more. And special assessments can add thousands of dollars in unexpected costs. A special assessment is a one-time charge the HOA levies to cover major expenses that exceed the regular budget, like roof replacement, road repaving, or emergency storm damage repairs. In communities where reserve funds have been allowed to dwindle, these assessments can be substantial and arrive with little warning.
Restrictions bother some homeowners. If you want to paint your front door bright red, park your boat in the driveway, or install a basketball hoop in the front yard, your HOA might have something to say about it. The level of restriction varies widely. Some associations are lenient and focus primarily on major issues. Others regulate details down to the color of your mailbox.
Enforcement conflicts are a real concern. HOA boards are run by volunteers who may not always be consistent, fair, or responsive. Some boards become overly aggressive about minor violations. Others fail to enforce rules at all, which defeats the purpose. Board politics, personality clashes, and power struggles can affect how well the community operates. The Foundation for Community Association Research’s satisfaction survey found that about 60% of residents rated their HOA experience as positive and another 26% rated it as neutral. That leaves a meaningful percentage with negative experiences.
Financial risk is another factor. If an HOA is poorly managed and its reserve fund is underfunded, homeowners may face large special assessments for deferred maintenance. Some associations have also been targets of fraud or embezzlement by board members or management companies. AmeriSave’s team can help you understand how an HOA’s financial health affects your loan and your long-term costs.
Due diligence on the HOA is just as important as the home inspection. Start by requesting and reviewing the full set of governing documents: the CC&Rs, bylaws, rules and regulations, and any amendments. Read them carefully. They’ll tell you what you can and can’t do with your property.
Review the HOA’s financial statements. Look at the annual budget, the reserve fund balance, and the most recent reserve study. A well-funded reserve is a sign of responsible management. A depleted reserve is a warning sign that special assessments may be coming. Ask whether the association has had any special assessments in the past five years, and if so, how much they were and what they covered.
Read the meeting minutes from the last twelve months. They’ll reveal what issues the board has been dealing with, whether there are pending lawsuits, and how decisions get made. Ask how often fees have increased and by how much. AmeriSave suggests treating this review as seriously as you would a home inspection, because a financially unstable HOA can cost you more over time than a minor plumbing issue.
Talk to current residents if you can. Ask them about their experience with the board, the management company, and the community in general. Their perspective can reveal things that documents don’t. Are maintenance requests handled promptly? Is the board responsive? Do residents feel the fees are reasonable for what they get? These conversations give you a ground-level view that financial statements alone can’t provide.
Check the delinquency rate as well. If a significant percentage of homeowners are behind on their assessments, the HOA may struggle to fund its operations. High delinquency can lead to deferred maintenance, which leads to special assessments, which leads to more delinquency. It’s a cycle that can erode property values and community quality. Your real estate agent or the HOA management company should be able to provide this information.
Also look at pending or recent litigation. HOAs sometimes face lawsuits from homeowners, contractors, or developers. Ongoing lawsuits can drain the association’s financial reserves and create uncertainty about future assessments. If the HOA is involved in active litigation, ask what the expected financial exposure is and whether the association carries adequate insurance to cover legal costs.
This is one area where HOAs have real power, and it’s worth understanding clearly. If you fall behind on your HOA assessments, the association can take a series of escalating actions. The process typically starts with late notices and fees. Most associations charge a late fee after a grace period, often 15 to 30 days.
If the balance remains unpaid, the HOA can place a lien on your property. An HOA lien is a legal claim against your home that must be satisfied before you can sell or refinance. In some states, the HOA can foreclose on that lien, meaning they can force the sale of your home to recover the unpaid amount. This happens independently of your mortgage lender’s foreclosure rights.
The specifics vary by state. Some states allow non-judicial foreclosure by the HOA, which is faster and less expensive for the association. Others require a judicial process. Regardless of the mechanism, unpaid HOA dues can create serious legal and financial complications. If you’re struggling to keep up, contact the HOA board directly to discuss payment plans before the situation escalates.
An HOA can be a benefit or a burden depending on the community, the board, and your personal preferences. The fees, rules, and governance structure deserve the same careful attention you give to the home itself. Review the CC&Rs. Check the financials. Talk to current residents. Factor the monthly fee into your total housing budget from day one, and build in room for annual increases. With roughly a third of all U.S. homes under some form of HOA governance, there’s a good chance you’ll encounter one during your search. AmeriSave can help you understand how HOA costs affect your mortgage qualification and your long-term affordability, so you’re making a fully informed decision before you close.
Yes. An HOA fee is a separate monthly or yearly payment that goes straight to the homeowners association, not to your mortgage lender. It pays for the upkeep of shared spaces, community amenities, insurance for common areas, and contributions to the reserve fund. Your lender does take this fee into account when deciding if you qualify, though, because it makes your total monthly housing cost higher. When AmeriSave figures out how much home you can afford, they take HOA fees into account.
Yes. Most HOAs look over their budget once a year and can raise fees to cover the rising costs of maintenance, insurance, utilities, and reserves. Some groups' bylaws limit how much they can raise their rates each year, while others have more leeway. One of the most common things that makes homeowners angry is when fees go up. So, before you buy, it's a good idea to ask about the HOA's fee history. AmeriSave says that you should add a buffer to your housing budget to account for future price increases.
The HOA charges a one-time fee called a special assessment to cover costs that are higher than what is normally budgeted. Major repairs like replacing a roof, repaving roads, or fixing damage from storms are some of the most common causes. Some special assessments can cost a few hundred dollars, while others can cost thousands. Check the HOA's reserve fund and the most recent reserve study to see how likely it is that there will be more assessments in the future. The AmeriSave learn center has more information on how to figure out the full costs of owning a home.
Yes, in a lot of states. If you don't pay your HOA fees, the group can put a lien on your property and, in some cases, start the process of foreclosure. The process and timeline are different in each state, but the risk is real. Many other debts on the property may not be as important as HOA liens. If you can't pay, get in touch with your HOA board to talk about a payment plan before things get worse. AmeriSave can also help you find out if refinancing could help you make your housing payments more easily.
No, HOAs are most common in newer planned communities, condo complexes, and townhome communities. There is often no HOA in older neighborhoods, rural areas, or homes on single lots. The Foundation for Community Association Research says that about a third of all U.S. homes are governed by some kind of community association. That means about two-thirds of them don't. AmeriSave gives loans to people who want to buy homes in both HOA and non-HOA communities.
Before closing, ask the seller or the HOA management company for the full set of governing documents. These papers have the CC&Rs, bylaws, and the rules and regulations that are in effect right now. During the sale, most states require sellers to give buyers information about the HOA. You should read these documents all the way through before you buy, and your real estate agent can help you get them. Every day, AmeriSave's team helps people buy homes in HOA communities. They can explain how the association's structure affects your loan.
No, usually not. If you buy a home in a HOA community, you have to join and the membership stays with the title. While you own the property, you can't choose not to pay fees or follow the rules. Dissolving an HOA entirely requires a supermajority vote of the membership, and the threshold is usually high. If you know that a HOA isn't right for you, look for homes that aren't in communities that are run by a HOA. Your AmeriSave loan team and your agent can help you look for the right things.
Because the association covers fewer shared systems, single-family HOA fees are usually the lowest, between $100 and $300 a month. The fees for townhomes are usually reasonable, between $150 and $400 a month, which covers the costs of shared roofs and exteriors. Condo fees are usually the highest. In buildings with elevators, doormen, and lots of other amenities, they can be more than $500. The American Housing Survey keeps track of these costs for the U.S. Census Bureau, and AmeriSave takes all of them into account when deciding if you qualify for a mortgage.
Get the most recent reserve study, the current balance of the reserve fund, and the last two to three years of financial statements. A healthy HOA has a reserve fund that is 70% or more of its projected replacement costs and has a history of small, regular fee increases instead of big, sudden ones. A low reserve balance, recent or pending special assessments, outstanding lawsuits, and a high percentage of homeowners who are behind on their payments are all red flags. If you need help understanding these numbers in relation to your mortgage application, AmeriSave's team can help.
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