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What Is an HOA?

What you'll learn: Understanding the pros and cons of HOAs


HOA stands for Homeowners Association. Many communities and condos have HOAs, and there are fees involved that you need to be aware of when you are deciding where to live. You should also understand what benefits an HOA offers.

An HOA is a self-governing organization meant to provide standards and guidelines for the community. They may also be in charge of building and amenity maintenance. For example, if your neighborhood is gated, or has a pool or playground, keeping these features in good working condition might be the HOA’s responsibility. In general, HOA rules and guidelines create community standards that everyone needs to follow to help maintain the beauty and upkeep of your community.

If your property has an HOA, you’ll need to follow certain rules and bylaws. Members of the community will elect officials from among the residents to help manage and maintain the values of your neighborhood.

What might be covered in HOA rules?

Depending on your community, it’s not uncommon for HOA rules and regulations to be many pages long. Before you actually commit to your new home, you need to be comfortable with the rules of your neighborhood. Here’s a short list of things that might be covered under your HOA guidelines. Of course, every community is unique so be sure to read and understand your HOA rules before you purchase your home. Also be sure to include any HOA dues in your budget as a monthly cost and be aware that they can increase over time.

Here are some examples of things that may be included in your HOA rules:

  • Acceptable house colors
  • Landscaping requirements
  • Requirements for additions to property — including decks, sheds, or other structures
  • Requirements for fencing
  • Requirements for lighting
  • Limits on public noise
  • Restrictions on basketball hoops in driveways
  • Restrictions on having RVs overnight in your driveway or on the street
  • Requirements for keeping your lawn and home regularly maintained and clean
  • Pool usage and rules

What do HOAs cost?

Every HOA is different based on the community or buildings. HOA costs can range from $250 to $10,000 per year. On the high end are condos that have access to pools, gyms, and other amenities. Those may have very high yearly/monthly HOA dues. Some HOAs for residential neighborhoods might only cost $50 to $80 per month and still offer great amenities.

As you’re calculating your homeownership costs and what you can afford, HOAs need to be part of that equation. The cost of an HOA can increase over time and — as we’ve seen — the costs can be high.

Some neighborhoods have both condos and single-family homes. If the condo has an elevator, or amenities like a pool or gym, the HOA fees for the condo could be significantly more than the HOA fees in the very same neighborhood for a single-family home. You’ll need to determine if the benefits are worth the increased fees, or you may be able to translate the savings in HOA dues to a single-family home.

What are the pros and cons of an HOA?

Some people love having an HOA in their neighborhood because it can mean having beautifully manicured landscaping and terrific amenities. Others don’t want the restrictions of an HOA and don’t need or want to pay for the amenities. You need to understand your needs and what’s important for you. Are you comfortable having a governing body tell you what you can and can’t do on your property?

Pros of an HOA

  • Property values may be higher in HOA communities due to the standardization and maintenance of homes and yards.
  • HOA boards can mediate neighbor disputes regarding property issues.
  • Your HOA may plan social activities, which can help you meet new people.
  • Some HOAs include amenities such as pools, clubhouses, security, or gyms.

Cons of an HOA

  • HOAs have fees that you need to calculate into your  monthly budget.
  • HOAs can place restrictions on what you can and cannot  do on your property.
  • Some HOAs can pester you for the slightest infraction, so you’ll need to understand your tolerance level.
  • There can be penalties if you break the HOA rules, and continued defiance can be costly.

Like everything else with homeownership, it’s important for you to understand the value that an HOA can bring and determine if the benefits ultimately suit your needs.

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1Rates are updated daily at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.