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Becoming a homeowner comes with many responsibilities, but if the home you’re purchasing is part of a homeowners association (HOA), you’ll also need to account for additional guidelines and fees. HOAs are common in condominium and townhome communities as well as some single-family neighborhoods, and what they cover—and cost—can vary significantly from one community to another.
As you’re looking for homes, talk to your agent about whether purchasing a home that’s part of an HOA is right for you and how the association’s fees, rules, and financial health may factor into your decision.
What is a Homeowners Association (HOA)?
A homeowners association is an organization that governs a community of homes. Homeowners within the governed community must follow certain guidelines for property upkeep and maintenance and will face restrictions on their ability to make additions and/or changes to the property. These rules exist to maintain a standard level of quality amongst the community to maximize property value.
Different HOAs may have different stipulations based on the type of housing they govern. For example, an HOA may oversee a community of detached single-family homes, but they are commonly found in communities of condos and townhomes where homeowners share common areas, amenities, or building maintenance responsibilities.
Each HOA generally has a board of directors responsible for enforcing rules, collecting fees, overseeing the association’s budget, and managing its funds. Some associations also hire a third-party management company to help carry out day-to-day operations. Homeowners within the community are members of the association and may have opportunities to vote on board members, budgets, or other community matters depending on the association’s governing documents and applicable local laws.
Typical HOA rules may address:
- Exterior paint color choices or architectural changes
- Landscaping and property maintenance
- Noise regulations, curfews, or quiet hours
- Pet restrictions (including type of animal and/or number of pets per household)
- Parking
- Holiday decorations and exterior displays
- Use of shared amenities
- Short- or long-term rentals
Because HOA rules can vary from one community to another—and may change over time—buyers should review the association’s current governing documents rather than assuming the rules will be similar to those of another neighborhood.
What Are the Pros and Cons of an HOA?
Living in an HOA community can offer benefits, particularly when it comes to maintaining common areas and neighborhood standards. Depending on the community, an HOA may take care of landscaping, exterior maintenance, security, recreational amenities, or other services homeowners would otherwise manage themselves.
For some homeowners, that added convenience, and consistency is a major benefit. For others, HOA rules and additional monthly expenses may feel restrictive.
Before buying, consider both sides:
Potential benefits of an HOA:
- Maintenance of common areas and shared amenities
- Community standards for property appearance and upkeep
- Shared amenities such as pools, fitness centers, clubhouses, or private parks
- An established process for managing community maintenance and repairs
- Systems in place to protect property value
Potential drawbacks of an HOA:
- Monthly, quarterly, or annual dues
- Rules governing how you use or modify your property
- The possibility of fee increases
- Potential special assessments for major repairs or unexpected expenses
- Restrictions that may affect pets, parking, rentals, renovations, or other aspects of homeownership
How much are HOA fees?
If you buy a home governed by a homeowners association, you will be required to pay HOA fees on top of your monthly mortgage payment. HOA fees vary widely depending on the property, location, services provided, and amenities included.
When comparing HOA fees, the monthly amount doesn’t tell the whole story. A community with higher dues may include services or maintenance that homeowners elsewhere pay for separately. Conversely, unusually low dues aren’t necessarily a bargain if the association isn’t setting aside enough money for future repairs.
HOA costs can also change over time. Rising costs of insurance, labor, utilities, repairs, and other services can lead associations to increase dues to meet their operating and long-term maintenance needs.
What Should You Review Before Buying a Home With an HOA?
Before buying a home in an HOA, take time to understand both the community’s rules and its financial condition. Your real estate agent can help you navigate the documents available during the buying process and identify questions you may want to ask.
Depending on the property and local requirements, documents and information worth reviewing may include:
- Covenants, Conditions, and Restrictions (CC&Rs)
- Bylaws and community rules
- Current HOA dues and recent fee increase
- The association’s annual budget
- Reserve funding or reserve studies, when available
- Current or planned special assessments
- Recent HOA meeting minutes
- Master insurance coverage
- Rental and pet restrictions
HOA fees are an additional expense you’ll have to budget for when buying a home. To get an idea of what you can afford, use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price, accounting for any HOA fees you may incur.
