HOA Fees: What They Cover and How Lenders Count Them

Most buyers meet HOA fees twice. Once on the listing, as a small line under the price. Then again in underwriting, when the lender adds the same number to the mortgage payment and the approval gets smaller.

The listing figure is also the least reliable number in the whole transaction. It is a budget divided by a unit count, and both halves move. Here is a short walkthrough of what buyers should ask about before they sign.

1. What Are HOA Fees, and Who Decides the Amount?

Quick Answer: HOA fees are your share of a community budget, not a price the association charges. The board approves annual spending, divides it by the units, and bills the result monthly or quarterly. That amount then sits beside taxes and insurance in your full monthly housing payment.

The number on the listing is arithmetic, not policy. Because it is a division problem, two things move it and neither needs a vote from you: the budget goes up, or the unit count stays fixed while costs do not.

Three documents tell you which way it is heading, and all three exist before you make an offer:

• The current operating budget. What insurance, utilities, management and maintenance cost, and what the board expects next year.
• The reserve study. When big components fail and how much is saved toward them. A thin reserve is a future bill, not a saving.
• The CC&Rs and recent minutes. The rules you are agreeing to, and the arguments the board is having about money.

2. What Do HOA Fees Cover?

Quick Answer: HOA fees cover everything the association owns rather than everything you use. In a single-family community that is usually roads, landscaping and amenities. In a condo it also includes the roof, the exterior walls and a master insurance policy that your own HO-6 condo policy is written around.

The Census Bureau draws the same line: HOAs collect fees to manage common areas and amenities, while condo fees cover more shared services and structural features such as roofs and hallways, per its 2024 American Community Survey analysis.

The useful question is not what is on the list but where the list stops. In a single-family HOA that line is simple: your house is yours. In a condo it depends entirely on which of three master-policy forms the association carries.

• Bare walls. The association insures the structure only. Cabinets, flooring, fixtures and every upgrade are yours to cover.
• Single entity. Original builder-grade finishes are included. Anything a previous owner upgraded is not.
• All-in. Finishes are covered as installed, which narrows what your own policy has to carry.

Three things sit outside the dues in every community, whatever form applies: your belongings and personal liability, anything behind your own drywall, and your share of a master-policy deductible, which many associations pass back to the owners affected by the claim.

3. How Much Are HOA Fees in 2026?

Quick Answer: The national median condo or HOA fee was $135 a month in 2024, but the average HOA fees you hear quoted hide a very wide spread. About 26% of paying households owe under $50 and about 14% owe more than $500 — a range that changes how much house you can afford far more than the median does.

Around 21.6 million of the nation’s 86.6 million owned households paid a condo or HOA fee in 2024, according to the Census Bureau’s 2024 ACS 1-year estimates. That is close to one owner in four.

One split is easy to misread. Households with a mortgage paid a median of $120 a month; those without one paid $184, and no state reversed it. Paid-off owners are not charged more. They have more often downsized into amenity-heavy communities.

4. Which States Have the Highest HOA Fees?

Quick Answer: New York is the outlier. Roughly 64% of its fee-paying homeowners owe more than $500 a month, against 14% nationally. Washington DC and Hawaii sit near half. In those markets the dues can rival the local property tax bill as a share of the monthly cost.

Two different things drive the state numbers. How many owners pay a fee tracks planned communities: Arizona, Florida and Nevada rank high, while Maine, North Dakota, Rhode Island, South Dakota and Wisconsin have the smallest shares. How much they pay tracks dense urban buildings — elevators, staff and structural reserves.

5. Where Your HOA Fees Actually Go

Quick Answer: Two line items explain most of the difference between a cheap community and an expensive one: master insurance and the reserve contribution. Both have climbed with construction costs and with property insurance rates generally, and a condo carries far more of both than a single-family HOA does.

Use the shape, not the exact percentages. A single-family HOA spends most of its money on what you can see from the street. A condo spends it on the building envelope and on insuring it, which is why condo dues move faster when insurance markets harden.

6. How Lenders Count HOA Fees in Your Mortgage Approval

Quick Answer: Lenders add HOA fees to your monthly housing expense at full value, exactly like taxes and insurance. That pushes up both ratios in your debt-to-income calculation, so the dues shrink your approved loan amount dollar for dollar against the payment you can support.

Fannie Mae’s Selling Guide B3-6-03 lists association or project dues as a required component of monthly housing expense, alongside principal and interest, real estate taxes, hazard insurance and mortgage insurance. That total is the numerator of the DTI ratio underwriting runs you through.

Here is the trade in plain numbers. At 6.5% on a 30-year fixed loan, every dollar of monthly payment supports about $158 of principal — so dues buy nothing toward the mortgage:

A buyer comparing a $475,000 condo with $500 dues against a $550,000 house with none is often looking at the same approval. The condo is the more expensive purchase.

7. Are HOA Fees Part of Your Monthly Mortgage Payment?

Quick Answer: Usually not. HOA fees are counted in your approval but billed separately by the association, so they do not flow through the servicer the way escrowed insurance and taxes do. You pay the association directly, on its schedule, using its own payment system.

The CFPB puts it plainly: condo, co-op and HOA dues are usually paid directly to the association and are not included in the payment you make to your mortgage servicer, though a servicer may agree to escrow them on request. That is uncommon.

Two practical consequences follow:

• A missed payment is not caught by autopay. Your mortgage can be current while your dues fall behind, and associations in most states can place a lien for unpaid amounts.
• Dues show up at closing anyway. Escrowed, Regulation Z requires each charge itemized under the initial escrow payment. Not escrowed, they appear as a proration between you and the seller, per the CFPB’s Closing Disclosure rule.

8. Special Assessments: The Bill Nobody Budgets For

Quick Answer: An HOA special assessment is a one-off charge on top of regular HOA fees, voted when reserves cannot cover a repair. It can arrive as a lump sum or as a temporary surcharge, and it is the fastest route from comfortable to house poor that owners in managed communities face.

Assessments are not random. They follow a pattern you can check for before you buy:

• A major component reaches end of life. Roofs, elevators, boilers, garage decks and building envelopes all have known service lives.
• The reserve study was ignored. Boards under pressure to hold HOA fees flat often underfund the schedule the study recommends.
• Insurance repriced. A higher master premium or bigger deductible eats operating cash earmarked elsewhere.
• A claim landed with a large deductible. Storm, fire or water damage can leave a six-figure gap the association has to raise.

Ask the seller and the management company two questions in writing: has an assessment been levied in the past five years, and is one under discussion now. In most states the resale certificate must disclose pending assessments.

9. Where HOA Fees Are Headed Over Ten Years

Quick Answer: Dues compound, and a mortgage payment does not. Starting from the $135 national median, a 6% annual increase reaches $228 a month by year ten. That drift belongs in the same long-run budget as your mortgage and other loan costs, because it never resets.

The 9% row is not a worst case. Communities that repriced master insurance after a hard market, or that started catching up on a deferred reserve schedule, have seen jumps that size in one year. And no row here includes a special assessment; those land on top.

10. How to Check an HOA Before You Buy

Quick Answer: Five documents tell you whether the HOA fees are stable: the budget, the reserve study, two years of minutes, the master policy and the resale certificate. Request them during your inspection period and price the transfer charges into your closing costs.

Work through these in order while your contingency is still live.

1. Pull the budget and two years of actuals. Compare budgeted against spent. Repeated overruns mean the dues are set too low.
2. Read the reserve study’s percent funded. A well-funded association saves on schedule; a thin one defers the cost onto whoever owns the unit when the bill lands.
3. Scan two years of board minutes. Look for assessment, litigation, deferred and insurance renewal. Problems appear in minutes long before they appear in the dues.
4. Get the master policy declarations page. Check the deductible and whether it is bare walls or all-in. That decides how much personal coverage you need.
5. Order the resale certificate early. It discloses pending assessments, the delinquency rate and any transfer fee, and can take days to produce.
6. Re-run your approval with the real dues. Give your lender the exact figure before you remove the financing contingency.

11. The Bottom Line

Quick Answer: HOA fees are a permanent line in your housing budget that lenders count in full and no amortization ever retires. The national median is $135 a month, one in seven paying households owes more than $500, and every $100 of dues costs about $15,800 of borrowing power.

Our advice for buyers: treat the dues as part of the price. Add ten years of projected HOA fees to the asking price of two properties before you compare them, and the cheaper listing is often the more expensive home.

That is how DollarVisor handles every money decision: rules from the agencies that write them, numbers from federal data, the math shown in full. Companies cannot pay for placement in our rankings. The rest of the cost of buying sits in our cash-to-close guide, and the coverage side lives in our insurance hub.

This article is information, not financial or tax advice. See our disclaimer.

12. Frequently Asked Questions

1. Are HOA fees tax deductible?

Not on a home you live in. HOA fees on a primary residence are a personal expense, unlike the property tax portion of your bill. They are deductible against rental income if you own the unit as an investment, and partly deductible if you claim a qualified home office.

2. Can you refuse to pay HOA fees or opt out of the HOA?

No. Membership runs with the deed, so buying the property means accepting the dues obligation. Non-payment usually triggers late fees and interest first, then a lien, and in many states the association can eventually foreclose on that lien. Disputes go through the board, mediation or the courts, not through withholding payment.

3. What happens to HOA fees when the association raises the budget?

The board approves a new budget, divides it by the units and issues the new amount, usually with 30 to 60 days’ notice. Many CC&Rs cap how much dues can rise in one year without an owner vote, so check your governing documents. A special assessment is a separate action, often outside that cap.

4. Do HOA fees hurt your chances of getting a mortgage?

They reduce how much you can borrow rather than disqualifying you. Fannie Mae requires lenders to include association dues in the monthly housing expense used for your debt-to-income ratio, so higher dues mean a smaller approved loan at the same income. The loan type is unaffected; only the maximum amount moves.

5. How do I find the average HOA fees for a specific community?

Ask the listing agent for the current dues, then verify against the association’s own budget. Listings go stale and often omit quarterly or annual charges billed separately. The resale certificate gives you the authoritative figure, including any transfer or move-in fees due at closing.