What is an HOA?

Homeowner associations, or HOAs, are organizations within a residential community that manage and maintain common areas, enforce rules and provide services to their members. These associations will create and enforce these neighborhood guidelines to help increase property value in the area. HOAs are led by boards made up of an elected group of volunteers who live in and enforce rules for the community. 

As of 2025, HOAs and similar organizations make up around a third of all homes in the United States. If you purchase a home in an HOA community, you will have to enroll upon or during closing.  

Homeowner associations operate and improve the community through assessments paid every month that, these assessments may increase over time. An HOA enforces their rules with fees and fines. If you are planning to live in an HOA area, you will want to review all the rules and know how much the fines may cost. Assessments and fees should be factored into your home budget cost. 

To know your home budget and factor in the cost of potential homeowner associations, talk with a lender and see what your home loan would look like today! 

Monthly fees for homeowner associations generally cover the cost of repairs and maintenance to any common areas. An HOA will use fees to pay for things like landscaping, snow and leaf removal or any services that provided amenities may require. 

A well-run HOA will put money aside for any larger community expenses. Occasionally, HOAs might ask for special assessments. These special assessments will be additional fees used to fund large-scale repairs or replacements that reserve funds don’t cover. 

While homeowner associations are for residential communities and neighborhoods, there are other similar organizations for different kinds of homes. Three of the organizations you might come across on your homebuying journey are POAs, COAs and co-ops. 

Property Owners Association (POA) is a project organization that manages and governs a community or residential area. The primary purpose of these associations is to ensure the overall well-being of the common areas and shared amenities for the use of unit owners. These associations often impose assessments to cover the costs of maintaining these shared spaces. 

A Condo Owners Association (COA) is an organization of owners within a condominium. These associations are governed by a board elected by the condo owners or can be managed by a property management company hired by the owners. The association is responsible for managing common areas and shared amenities for the use of unit owners. 

Associations assess fees/dues to the unit owners for the maintenance and operation of the project, buildings, and amenities. In addition, the HOA board and legal documents dictate the rules for operation of the project.  Condo owners are responsible for the interior of their units, while the association is responsible for everything else.   

In a Cooperative (Co-Op), owners purchase shares in a housing corporation and execute a proprietary lease that ties those shares to a specific unit for an agreed period, subject to extension/change. Owners do not hold a deed to a specific unit, instead own shares in the corporation. Shareholders usually elect a board of directors to oversee operations, finance, and policies, with monthly fees assessed to cover the cost of operation, taxes, and maintenance. Potential buyers are often interviewed and must be approved by the board of directors.  

Homeowner associations offer many benefits to the community but can also come with some drawbacks. A few pros and cons of HOAs are: 

• Protects property value 

• Access to amenities 

• Well-maintained public spaces 

• Extra security 

• Sense of community 

• Monthly fees 

• Strict rules and guidelines 

• Lien or foreclosure risk 

• Regulations on a house you own 

The average monthly HOA fee is between $100 and $300, but can range from less than $50 a month, to more than $1,000 per month. The exact price will be dependent on factors such as amenities, location and property value. Some HOAs might collect dues quarterly or yearly instead of monthly.  

How you will pay your homeowners association fees depends on your HOA. Some HOAs will offer options when paying fees, while others might only have one way. Some popular payment options are online payments, automatic bank drafts, checks or in-person payments. 

Late fees are standard when HOA fees aren’t paid by their deadline. Depending on your HOA guidelines, avoiding payments could lead to the HOA initiating a lawsuit, placing a lien on your home or in extreme cases foreclosing on your house. Make sure you review the rules and conditions of your HOA and what your options might be if you aren’t able to make a payment. 

It is your right to dispute any HOA fees or decisions you feel aren’t accurate or fair. To dispute your HOA, you will need to first review all HOA bylaws and rules and regulations, then you will need to collect evidence that supports your claim. After that, you will want to write a letter to your HOA explaining how their actions were unfair and request a hearing.

Purchasing a home with a homeowner association is no different than purchasing any other home. But before you buy a home in an HOA area, make sure that you have budgeted monthly HOA costs into your finances. 

If a home you are looking to purchase has a homeowner association, some lenders can show you what your monthly costs will be between a home mortgage and an HOA. You can even look for yourself with an online mortgage calculator. 

Whether you are planning to live in an area with an HOA or would like to know how much room there is for HOA fees in your budget, talk to a trusted Loan Officer to get more information about your options. 

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.} 

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