The 5 Most Important Questions to Consider About HOA Fees Before Buying a Home

More than half of U.S. homeowners live in neighborhoods governed by a Homeowners Association (HOA). If you’re in the market for a new home, there’s a strong chance your next property will be part of one.

When you purchase a home within an HOA community, membership is mandatory—and so are the associated fees. These monthly or annual dues contribute to maintaining the shared spaces, amenities, and services that enhance community living. It’s also important to note that HOA fees can affect your home loan qualification, as they’re included in your debt-to-income ratio.

While HOA fees add to the cost of homeownership, they also provide value—covering amenities and services that would otherwise be your responsibility and potentially boosting your property’s long-term appeal.

Before you make an offer, take the time to understand exactly what you’re paying for. Here are five key questions every buyer should ask about HOA fees before purchasing a home.

1. What Are HOA Fees, and What Do They Cover?

HOA fees are regular payments (typically monthly or quarterly) collected by the homeowners association to maintain shared areas and community operations. Depending on your neighborhood, fees may include:

Maintenance of common areas: Landscaping, exterior lighting, playgrounds, pools, fitness centers, clubhouses, and other shared spaces.
Insurance: Liability or hazard insurance for community property and amenities.
Reserve fund contributions: Funds set aside for future repairs or major projects, such as roof replacements or road resurfacing.
Security: Gated access systems, patrol services, or surveillance cameras.
Utilities: Services like trash collection, water, gas, or sewer may also be covered.

Each HOA is different, so review the association’s budget and fee breakdown carefully to understand what’s included.

2. What’s Not Covered by HOA Fees?

Knowing what’s not covered is just as important when budgeting for homeownership. HOA fees typically don’t include:

Property taxes
Homeowner’s insurance (for your individual unit or property)
Utilities for your private residence, unless otherwise stated

Some HOAs may include limited utilities—such as trash removal or water—but others may not. Review the fee schedule closely so you can plan for all additional monthly expenses.

3. Are HOA Fees Tax Deductible?

For most homeowners, HOA fees are not tax-deductible on a primary residence. However, if the property is used as a rental or investment property, portions of your HOA dues related to maintenance or management may qualify as deductible expenses. Always consult a tax advisor or accountant for guidance specific to your situation.

4. What Are Typical HOA Fees by Community Type?

HOA fees can vary widely based on location, community type, and amenities.

According to industry research by iPropertyManagement.com:

The average monthly HOA fee for single-family homes is approximately $250.
Condominiums and common-interest communities average around $170 per month.
Fees can range from under $100 to several thousand dollars in luxury or urban communities.

In general, communities with extensive amenities—such as pools, gyms, or gated security—tend to have higher HOA dues.

5. What Happens If I Can’t Pay My HOA Fees?

If you experience financial hardship, contact your HOA board immediately before missing a payment. Late or unpaid HOA fees can lead to penalties, liens, and, in severe cases, foreclosure.

Many associations are willing to work with homeowners on temporary solutions, so early communication is key.

Additional Questions to Ask Before Buying in an HOA Community

Most HOA residents report positive experiences, especially when communities are well-managed and transparent. However, living in an HOA means agreeing to the association’s Covenants, Conditions & Restrictions (CC&Rs)—legal documents that outline what homeowners can and cannot do with their property.

These rules can include regulations on:

Exterior paint colors
Landscaping and lawn care
Parking restrictions
Noise levels
Seasonal or holiday decorations

If you value flexibility and autonomy over your property, these restrictions are important to review before buying.

When evaluating a community, ask the HOA board the following:

How much are the monthly (or annual) fees, and what do they cover?
How often are fees increased, and by how much?
What is the size and current balance of the reserve fund?
When was the last special assessment issued, and for what reason?
Are there any pending or recent lawsuits involving the HOA?

Understanding the financial health and governance of the association can help you make an informed decision and avoid future surprises.

Final Thoughts

Buying a home within an HOA community can offer convenience, peace of mind, and access to amenities that enhance your lifestyle—but it also comes with ongoing financial obligations and shared decision-making.

Before committing, take time to review the HOA’s financial statements, governing documents, and fee structure. And if you’re financing your purchase, speak with a loan officer to understand how HOA dues factor into your mortgage approval and monthly payment.

This information is provided for educational purposes only. All loan programs, terms, and interest rates are subject to change without notice. All loans are subject to credit and underwriting approval. Please consult your tax advisor or accountant for specific eligibility and deduction guidance.