If you’re shopping for a condo, townhome, or a house in a planned community, there’s a good chance it comes with a homeowners association, or HOA. An HOA can mean well-maintained shared spaces and stable property values — or unexpected fees and rules that catch you off guard. As a first-time buyer, it pays to understand exactly what you’re signing up for before you make an offer.
What an HOA is
A homeowners association is an organization that governs a community — a condo building, a townhome development, or a subdivision of single-family homes. When you buy in that community, membership is usually mandatory, and you agree to follow its rules and pay its dues. The HOA is typically run by a board of volunteer homeowners, sometimes with a professional management company handling day-to-day operations.
What HOA dues cover
You pay HOA dues (monthly, quarterly, or annually) and in exchange the association maintains shared elements and provides certain services. Depending on the community, that can include:
- Landscaping and upkeep of common areas.
- Amenities like a pool, gym, clubhouse, or playground.
- Exterior maintenance and roofing (common in condos and townhomes).
- Trash, snow removal, and sometimes water or other utilities.
- Insurance on shared structures and reserves for major repairs.
The more the HOA covers, the higher the dues tend to be. A condo with a pool and a doorman will cost far more per month than a subdivision that only maintains an entrance sign and some grass.
The rules — CC&Rs
HOAs enforce a set of rules called Covenants, Conditions & Restrictions (CC&Rs). These can govern everything from exterior paint colors and fence styles to parking, pets, short-term rentals, and whether you can put up a shed or a satellite dish. Before you buy, read the CC&Rs. If you plan to rent the place out, run a home business, or park an RV, make sure the rules allow it — some communities strictly limit these.
How HOAs affect your mortgage
Lenders count your HOA dues as part of your monthly housing cost when calculating what you can afford. A $400 monthly HOA fee reduces the loan amount you qualify for just as surely as a higher interest rate would. So when you budget, include the dues — a slightly cheaper home with a steep HOA fee may cost more each month than a pricier home with none.
For condos especially, lenders also scrutinize the HOA itself. If too many units are rented, the association is underfunded, or there’s pending litigation, it can affect your ability to get certain loans. Your lender may request HOA documents during underwriting.
Special assessments and rising dues
Beyond regular dues, HOAs can levy special assessments — one-time charges to cover big expenses like a new roof or repaving when reserves fall short. These can run into the thousands. Ask about the association’s reserve funds and recent or planned special assessments before you buy. A well-funded HOA with healthy reserves is a good sign; one that’s constantly hitting owners with surprise assessments is a warning.
Frequently asked questions
Are HOA fees included in my mortgage payment?
Not usually. HOA dues are typically paid separately to the association, not through your mortgage escrow. But lenders do factor them into how much home you can afford.
What happens if I don’t pay HOA dues?
HOAs have legal tools to collect, including late fees, liens on your property, and in serious cases foreclosure. Unpaid dues are taken seriously, so always budget for them.
Can an HOA really tell me what I can do with my home?
Within the scope of its CC&Rs, yes. HOAs can restrict exterior changes, paint colors, rentals, pets, parking, and more. Read the rules before buying so there are no surprises.
What is a special assessment?
It’s a one-time charge the HOA levies on owners to cover a major expense that exceeds its reserves, such as a new roof or road repaving. These can be significant, so ask about the reserve fund before buying.