Homeowner association fees: What they cover and how they affect you

Written by Samantha SheltonNMLS 1647301Updated September 2026

Homeowner association (HOA) fees are mandatory recurring payments, usually monthly, sometimes quarterly or annual, that fund shared amenities, common-area maintenance and the services a community association provides to every owner inside it. The national median was $135 a month in 2024, according to the U.S. Census Bureau’s American Community Survey, and the spread around that median is enormous: about 26% of paying households owed less than $50 a month, while roughly 3 million owed $500 or more.

The number matters well beyond your monthly budget. Lenders count association dues inside the housing payment they qualify you on, so the fee attached to a listing quietly changes the mortgage you can be approved for before you ever negotiate on price.

Learn how homeowner association fees work, including what they pay for, how much they typically run, how they reshape your loan approval, and what happens when they rise or go unpaid. If you’re mapping the full cost of ownership, start with our Homeownership guide.

Key takeaways:

• The median is $135 a month, but the median tells you little: About 5.6 million paying households owe under $50 a month and about 3 million owe $500 or more, so only the specific community’s number matters.
• About a quarter of every dues dollar is saved, not spent: U.S. community associations collected $124.2 billion in assessments in 2025 and routed $31.1 billion of it into reserve funds for future roofs, roads and elevators.
• Dues shrink your borrowing power dollar for dollar: Lenders count them in your qualifying payment, so carrying a $300 monthly fee takes roughly $8,000 of additional annual gross income at a 45% debt-to-income ceiling.

What are HOA fees?

An HOA fee is a recurring assessment every owner in a community association is contractually obligated to pay, set by the association’s board through an annual budget and enforceable against your property. It isn’t a service you subscribe to, the obligation runs with the deed, so it transfers to you at closing whether or not you use a single amenity.

The scale is easy to underestimate. The Foundation for Community Association Research counts 373,000 community associations in the United States in 2025, holding 29.6 million housing units and housing 78.1 million residents about 35.2% of all U.S. housing. Homeowners associations make up roughly 58% – 63% of that total, condominium communities 35% – 40%, and cooperatives 2% – 4%.

Three terms get used interchangeably and shouldn’t be. Regular assessments are the budgeted dues you pay monthly or quarterly. Special assessments are one-time charges levied when reserves can’t cover a major repair. Fines are penalties for rule violations. All three can become obligations attached to your home, which is why an association fee belongs on the same list as taxes and insurance when you’re spotting the hidden costs in a home purchase.

What do HOA fees cover?

Dues fund the shared property and shared obligations no single owner controls, and, critically, they pre-fund repairs that haven’t happened yet. Nationally, associations put $31.1 billion of the $124.2 billion they collected in 2025 into reserves, roughly a quarter of every dollar assessed.

• Grounds and seasonal work: Landscaping, mowing, irrigation, snow removal and common-area lighting, the line items owners notice first when a board cuts the budget.
• Amenities: Pools, clubhouses, fitness rooms, trails, playgrounds and gated entries, along with the staffing, utilities and insurance each one carries.
• Master insurance: A blanket policy on common elements and, in most condominium projects, the building structure itself. It does not cover your belongings, your liability or, usually, your interior finishes.
• Shared services: Trash and recycling contracts, private road and parking-lot maintenance, security, and in many condo buildings water, sewer or heat billed at the building meter.
• Management and administration: A management company or on-site manager, accounting, legal fees, rule enforcement and the association’s own tax and audit work.
• Reserve contributions: The savings line for roofs, siding, elevators, repaving and pool systems. A board that keeps dues artificially low is almost always doing it here, and the bill arrives later as a special assessment.

What dues generally do not cover is anything inside your walls. Fannie Mae requires a borrower to carry a unit owners property insurance policy whenever any portion of the unit interior or its improvements isn’t covered by the master policy, or whenever the master policy carries a per-unit deductible with coverage at least equal to the greater of the uncovered interior amount or that deductible. Your own systems, appliances and finishes stay on your ledger, which is why an association doesn’t excuse you from budgeting for home maintenance.

How much are HOA fees?

The national median monthly condo or HOA fee was $135 in 2024, and 21.6 million of the nation’s 86.6 million owned households paid one, according to the Census Bureau’s American Community Survey. The distribution matters more than the midpoint.

Geography drives much of that spread. In New York, 64% of fee-paying homeowners reported paying $500 or more a month, and about half did in the District of Columbia and Hawaii. You can pull the underlying Census Bureau housing data yourself, but the practical lesson is simple: a national median is not a budget.

Why fees differ by property type

Property type is the single biggest predictor of where a fee lands, because it determines how much of the building the association is responsible for.

Condominium fees run highest because the association maintains and insures the building itself; a detached subdivision HOA that only mows a boulevard and runs a pool can charge a fraction of that. Neither is automatically a better deal, a low fee on a detached home simply moves the roof back onto your own repair budget, a trade laid out in our guide to the pros and cons of buying a home with an HOA.

How do HOA fees affect your mortgage?

They reduce what you can borrow, dollar for dollar. Fannie Mae’s Selling Guide defines monthly housing expense, the PITIA figure that drives your ratios, as the sum of principal and interest, property, flood and mortgage insurance premiums, real estate taxes, ground rent, special assessments, owners’ association dues and any subordinate financing payment. Freddie Mac counts association dues in the housing expense the same way. A $300 fee sits in that calculation exactly like $300 of principal and interest.

Here is the arithmetic in payment terms. Say your file supports a 45% total debt-to-income (DTI) ratio on $9,000 of monthly gross income, and you carry $600 in car and student loan payments. That leaves $3,450 a month for housing. In a community charging $300, only $3,150 of it can go to principal, interest, taxes and insurance, and the purchase price that supports drops accordingly.¹ Run it the other direction and the same point lands harder: carrying $300 a month of dues at a 45% ceiling takes about $8,000 of additional annual gross income.

Those ceilings are real numbers, not lender folklore. Fannie Mae’s maximum total DTI is 36% of stable monthly income on manually underwritten loans, which can be exceeded up to 45% when the borrower meets the credit score and reserve requirements in the Eligibility Matrix; for loan casefiles underwritten through Desktop Underwriter, the maximum allowable DTI is 50%.

Condominiums add a second layer, because the association gets underwritten too. Under Fannie Mae’s Full Review, the project’s budget must fund replacement reserves at a level that is at least 10% of the budget, and no more than 15% of total units may be 60 days or more past due on common expense assessments. On the FHA side, a unit in a project that isn’t FHA-approved may still qualify through Single-Unit Approval, which HUD limits to completed projects of at least five dwelling units that meet a subset of the project requirements including FHA insurance concentration, owner-occupancy percentage and the project’s financial condition.² An association’s finances can decline a loan on a unit that appraised perfectly well.

One practical note on paying them: association dues usually aren’t part of your mortgage payment at all. Property taxes and homeowners insurance are what a servicer collects through your escrow account; association dues are billed by the association and paid straight to it. Some servicers will agree to escrow dues on request, but that’s the exception rather than the rule. So the dues count against your approval while landing as a separate bill you have to remember, one of the recurring costs the CFPB’s guide to owning a home walks through.

Because Align is a broker, we can move an association-governed file to the wholesale lender whose project-review and ratio guidelines actually fit it, instead of forcing it through one bank’s box.

What homeowners need to know about increases, assessments and nonpayment

Dues rise, and the governing documents, not your preference, decide how far and how fast. Some CC&Rs cap annual increases or require an owner vote above a threshold; others leave it to the board’s budget. Read the covenants and the state statute together before you assume there’s a ceiling, and treat navigating HOA regulations as part of your due diligence rather than post-closing homework.

• Increases follow costs, not inflation targets: Insurance premiums, contractor pricing and aging components drive the budget. Ask for five years of dues history and the last reserve study, not just this year’s figure.
• Special assessments are the reserve shortfall arriving late: When the reserve fund can’t cover a roof, a repaving or storm damage, the board levies a one-time charge per unit on its schedule, not yours. Two or three in five years is a pattern.
• Unpaid dues become a lien: Late charges and interest come first, then loss of amenity privileges, then a lien recorded against the unit. In many states the association can pursue foreclosure to collect, even on a balance that’s small next to the home’s value.
• Some states give assessments priority over your mortgage: Fannie Mae’s Selling Guide requires the title policy to insure that the mortgage is superior to any lien for unpaid common expense assessments, and in jurisdictions that give those assessments limited priority over a first mortgage, that they’ve been paid through the policy’s effective date.

The practical rule is unglamorous: pay the assessment and dispute it in writing, rather than withholding payment to make a point. If money is genuinely tight, contact the board early. Most associations would rather write a payment plan than pay a lawyer.

Are HOA fees tax deductible?

Generally, no. IRS Publication 530 lists “Homeowners association fees, condominium association fees, or common charges” among the payments a homeowner can’t deduct, and it explains that association assessments aren’t deductible because the homeowners’ association, rather than a state or local government, imposes them.³ That holds even when the dues fund things a municipality would otherwise provide, like road maintenance or trash pickup.

The picture changes when the property isn’t purely personal. Space used for a trade or business, or a unit you rent out, is governed by different rules, and the treatment turns on facts a publication can’t decide for you. The same is true at sale: dues themselves don’t shift your gain calculation, but the rules that do including the ownership-and-use test behind capital gains tax exemptions. Are worth understanding well before you list. Our Taxes & Money hub covers the broader picture, and a qualified tax professional should cover yours.

FAQ: HOA fees

Here are answers to common questions about homeowner association fees.

What do HOA fees actually pay for?

HOA fees fund shared community expenses: landscaping and snow removal, maintenance of common areas and amenities like pools, gyms and clubhouses, trash collection in some communities, master insurance for shared structures, security, and a reserve fund for future big-ticket repairs. In condominiums, fees also typically cover exterior building maintenance and sometimes utilities like water, which is why condo fees run higher, a cost structure worth studying in the pros and cons of investing in condominium markets.

Do HOA fees affect how much house I can afford?

Yes. Lenders add the monthly HOA fee to your housing expense when calculating your debt-to-income ratio, exactly like principal, interest, taxes and insurance. A $300 monthly fee can reduce your qualifying loan amount by tens of thousands of dollars. Always compare total monthly cost, mortgage payment plus HOA fee, when weighing an HOA property against a non-HOA home, and see how the math works in our guide to the debt-to-income ratio.

What happens if you don’t pay HOA fees?

Unpaid HOA fees typically trigger late charges, interest and loss of amenity privileges, and the association can eventually place a lien on your home. In many states, an HOA lien can lead to foreclosure even if your mortgage is current. If you are struggling to pay, contact the board early. Many associations will set up payment plans rather than escalate to legal action. The enforcement process itself is spelled out in the governing documents covered in navigating HOA regulations.

Can HOA fees go up, and is there a limit?

Yes, HOA fees can and usually do rise over time as maintenance costs, insurance premiums and reserve needs grow. Limits on increases depend on the association’s governing documents and state law; some cap annual increases or require a homeowner vote above a threshold. Associations can also levy one-time special assessments for major repairs, so review the reserve study and fee history before buying, a step covered in our guide to buying a home with an HOA.

The bottom line on HOA fees

Homeowner association fees are mandatory recurring assessments that fund common-area upkeep, amenities, master insurance and reserves for future repairs. The national median was $135 a month in 2024, but about 26% of paying households owed under $50 and roughly 3 million owed $500 or more, so the only number that matters is the one attached to the specific community. Nationally, about a quarter of every assessment dollar goes into reserves, which is exactly why an underfunded budget shows up later as a special assessment. And because lenders count dues inside your qualifying housing payment, a $300 fee reduces your borrowing power just as surely as $300 of principal and interest.

If you’re ready to shop HOA and condo communities with a real qualifying number in hand, talk to Align Lending, we’ll shop your scenario across our lender network and show you the full payment, dues included, side by side. Call 248-506-5727 or start online today.

Footnotes:

1. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Your qualifying payment, rate and terms will depend on your application, the property, the association’s dues and market conditions. Return to text.

2. Align Lending is not acting on behalf of or at the direction of FHA or HUD. FHA condominium project approval and Single-Unit Approval requirements are set by HUD and are subject to change. Return to text.

3. This is general information, not tax advice. Deductibility depends on your individual circumstances, on how the property is used, and on whether you itemize. Consult a qualified tax professional about your situation. Return to text.

Sources: national median monthly condo or HOA fee of $135 in 2024, 21.6 million of 86.6 million owned households paying a fee, medians of $120 with a mortgage and $184 without, about 5.6 million (26%) paying under $50, about 3 million paying $500 or more, and the New York, District of Columbia and Hawaii shares at $500 or more, U.S. Census Bureau, 2024 American Community Survey 1-year estimates. Counts of 373,000 community associations, 29.6 million housing units, 78.1 million residents, 35.2% of U.S. housing, $124.2 billion in assessments collected, $31.1 billion contributed to reserves, and the association-type shares, Foundation for Community Association Research, 2025 U.S. National and State Statistical Review. Monthly housing expense (PITIA) components including owners’ association dues and special assessments, Fannie Mae Selling Guide B3-6-03. Maximum total DTI of 36%, up to 45% with Eligibility Matrix credit score and reserve requirements on manually underwritten loans, and 50% for loan casefiles underwritten through Desktop Underwriter, Fannie Mae Selling Guide B3-6-02. Replacement reserve funding of at least 10% of the budget and the 15% limit on units 60 days or more past due on common expense assessments under Full Review, Fannie Mae Selling Guide B4-2.2-02. Title policy assurance that the mortgage is superior to liens for unpaid common expense assessments, and the limited-priority jurisdiction provision, Fannie Mae Selling Guide B7-2-04. Unit owners property insurance policy requirement and coverage amount, Fannie Mae Selling Guide B7-3-04. Inclusion of owners association dues in the monthly housing expense for a primary residence, Freddie Mac Single-Family Seller/Servicer Guide Section 5401.1. FHA Single-Unit Approval eligibility, including projects of at least five dwelling units and the subset of project requirements covering FHA insurance concentration, owner-occupancy percentage and financial condition, U.S. Department of Housing and Urban Development, Project Approval for Single-Family Condominiums final rule (84 FR 41846, effective October 15, 2019) and HUD Handbook 4000.1 Section II.C. Nondeductibility of homeowners association fees, condominium association fees and common charges, IRS Publication 530. Escrow accounts and the recurring costs of owning a home, Consumer Financial Protection Bureau, Buying a House / Owning a Home.

This article is for informational purposes only and is not intended to provide legal, financial, insurance, or tax advice. HOA lien, foreclosure and fee-increase rules vary by state and by the association’s governing documents; consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154, and is not acting on behalf of, endorsed by, or sponsored by FHA, HUD, Fannie Mae, Freddie Mac, or any government agency.

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