4 Ways HOAs Are Making Your Home Unaffordable
Written by
Yaël Bizouati-Kennedy
Edited by
Jenna Klaverweiden
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
The road to homeownership has been an arduous one for many Americans lately. Inflation, soaring mortgage rates, high prices and low inventory have all made it very difficult for buyers. And now, for those who bought a home that’s part of a homeowners association (HOA), there may be additional charges that could become very burdensome. And the sting might be painful.
Many HOA communities have added features and shared amenities, such as gyms, pools, tennis courts and landscaping maintenance, and are ruled by a board. Surprisingly, these are now very common. More than 75 million Americans are part of an HOA, according to RubyHome.
Being part of an HOA community has its benefits and downsides. One of the downsides is the additional strain it can put on homeowners’ budgets — which can further aggravate the affordability crisis many Americans are facing. Here are four ways that HOAs are making your home unaffordable.
Fees
HOA fees vary, but generally, they cover things like trash pickup, landscaping, security, maintenance and community areas, according to Rocket Mortgage.
And as Zillow noted, HOA fees can range from $100 per month to over $1,000. The fees can depend on your location and the amenities offered in the community.
As such, it’s important to be knowledgeable about HOA fees before you purchase a home and take them into account in your monthly budget.
Super Liens
According to Bloomberg, around 20 states in the country enforce the so-called “super lien” priority.
In the context of an HOA, this means the HOA is placed in front of the first mortgage holder. “That means an HOA can claim the property, even over the bank, if an owner is behind on fees or fines,” Bloomberg reported.
“That allows HOAs to move to foreclosure and really be ruthless in getting that debt paid off,” said Sarah Holder, a Bloomberg CityLab reporter, on the Big Take podcast.
Fines
Many HOAs also impose rules and guidelines that residents must follow. And if the rules aren’t followed, residents can be fined.
Residents could be fined for issues with lawn care, parking and noise, among other things, according to APS Management. “Most HOA fines start at around $25 and increase to $50 and $100-$200 if you don’t pay or continue to violate the rule,” it stated.
Special Assessments
Finally, HOAs can impose special assessments, which generally occur during unexpected emergencies.
It’s worth noting that these special assessments are different from typical HOA fees, like dues and planned assessments, according to Rocket Mortgage, and they typically are outside of the HOA’s yearly budget — “potentially by a lot.”
HOAs come with many benefits but also many costs, so be sure to take those expenses into consideration when you’re looking to purchase a home.
More From GOBankingRates
