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 associations (POAs) govern and manage commercial and residential properties by enforcing rules that help maintain property values. POAs can collect funds to support the community’s needs. POAs can encompass HOAs, and the other organizations lists but tend to have less enforcement power. 

Condominium owners associations (COAs) work just like an HOA but for condo buildings and communities. Since much of the property is shared in a condominium, COA rules could often be stricter with fees more expensive than HOAs and POAs. The exact rules and price will be dependent on the property and amenities offered. 

In a cooperative (co-op), homeowners buy a share in an apartment complex with a proprietary lease to their home. Co-ops are mostly found in densely populated cities with potential homeowners needing to be approved to live in such buildings. When you live in a co-op, you share in the success of the whole building which can make it a great investment. 

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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