Jan 06 2023

4 fast facts about living in a home with an HOA

Homeowners Association (HOA) dues may cover essentials, like community maintenance.

You’re about to make an offer on your dream home. It appears to have everything you’re looking for, but there’s a caveat—the property has an HOA tied to it. Is that a deal-breaker, or should you go ahead with the purchase?

4 things to know about an HOA

HOA stands for Homeowners Association. It’s a neighborhood entity that acts as its own small community government, with residents who agree to abide by the rules. For some homeowners, this governing neighborhood association may feel too restrictive. For others, it may come as a relief to know you have access to added amenities and a group overseeing some or all of your community’s maintenance.

Let’s break down what you can expect so you can make an informed decision:

1. HOAs are common.

Not only are more than 82 percent* of new build homes part of a Homeowners Association—roughly 22 new associations form each day. All in all, over half of all homeowners live in an HOA community.*


  • Homeowners Associations are run by a management company, with neighborhood volunteers working as board leaders or liaisons between the neighborhood and the management company.
  • Some Homeowners Associations are run entirely by a management company, and a portion of your dues pay for this service.
  • Many modern planned communities or developments, such as condominiums, townhouses, and single-family homes, now have a Homeowners Association.

Like most things in life, a Homeowners Association can be a perk or a burden, depending on your individual needs and expectations as a homeowner. What determines this may be as simple as whether or not you’d like to follow the community’s rules and how well the management company runs things.

2. HOAs are created to help protect property values.

Homeowners that belong to a neighborhood association agree to abide by its covenants, conditions, and restrictions—also called CC&Rs, or Common Restrictive Covenants. This is a set of rules determined by homeowners or lawyers hired by the management company, meant to promote positive change and/or uphold what a future neighborhood will look like.

As mentioned, Homeowners Association guidelines may feel limiting to some, while providing comfort to others by ensuring that neighbors will all adhere to the same standards.

As for improving property values: The results are mixed. Some studies have shown that home prices have been “positively affected by membership in an HOA.” Others, conducted on condos, found that high dues might potentially hurt a property’s sales price. The positive impact of a Homeowners Association may be related to the fact that it reduces the likelihood of homes falling into disrepair in your neighborhood.

3. HOAs have a cost.

While every neighborhood association is different, dues typically pay for the presence of communal space:

  • The average monthly Homeowners Association membership fee for a single-family home is around $250.*
  • Amenities might include a pool, tennis courts, basketball courts, fitness center, co-working space, or even a small park.
  • Some Homeowners Associations offer security in the form of a guarded gate; a townhome or condo association may also manage exterior maintenance, including landscaping and roof care.

Important note: Ask your real estate agent to dig into how often a Homeowners Association raises their dues before you purchase. Frequent increases may be a cause for concern as this can add to your monthly housing expense. It can also help to compare a particular neighborhood’s dues to other similar communities.

Whatever your potential Homeowners Association includes, make sure it’s what you want and that it will add to your life rather than detract from it. Pools and tennis courts will have hours of operation. Do they fit into your schedule? If not, then perhaps the added expense doesn’t make sense.

Besides HOA fees, what else might add to the cost of homeownership? Connect with a local Academy Loan Officer to find out.

4. HOAs are intended to unify a neighborhood.

It’s true that the presence of a Homeowners Association can limit individualism in the exterior of homes and yards (such as prohibiting a hot pink house). But for many, these guidelines may also provide peace of mind in knowing that your neighborhood will remain attractive. At least, as long as your neighbors respect the rules.

Without a Homeowners Association, a neighborhood might appear to be a hodgepodge of styles and tastes. Again, this suits some and not others. The benefit of Homeowners Association rules is usually that homes look relatively uniform and well-kept. But it can also discourage uniqueness.

If you have concerns about adhering to these rules, it may help to know that there are limitations. For example, Homeowners Associations aren’t allowed to randomly enact new regulations, restrict native plants, or practice outright discrimination. When the CC&Rs are violated, there are typically warnings and then consequences, ranging from fines to liens against the home of the person in violation.

Have you pre-qualified** yet?

When you pre-qualify** for a mortgage, you find out how much house you can afford so you don’t waste time shopping in the wrong price range. Pre-qualifying** also helps you plan out your housing budget so you can decide if you feel comfortable paying for an HOA. To take the first step: Reach out to a local Loan Officer and pre-qualify**.

**Pre-qualification is not a commitment to lend. This is for informational and educational purposes only and not intended as an advertisement as defined by Regulation Z. Please consult a trusted professional as personal circumstances may vary. No specific results are guaranteed. For real estate professional use only and should not be considered an advertisement to the general public. MAC1023-1483469 .