Becoming a homeowner comes with many responsibilities, but if the home you’re purchasing requires you to be part of a Homeowners Association (HOA), you’ll have to follow additional guidelines and pay additional fees. As you’re looking for homes, talk to your agent about whether purchasing a home that’s part of an HOA is right for you.
What is a Homeowners Association (HOA)?
A Homeowners Association is an organization that governs a community of homes. Homeowners within the governed community must follow certain guidelines for property upkeep and maintenance and will face restrictions on their ability to make additions and/or changes to the property. These rules exist to maintain a standard level of quality amongst the community to maximize property value.
Different HOAs may have different stipulations based on the type of housing they govern. For example, an HOA may oversee a community of detached single-family homes, but they are commonly found in communities of condo or townhome housing styles where there is a shared, communal living style. Each HOA has a Board of Directors in charge of enforcing rules, collecting fees, and managing the funds, and certain associations may hire a third-party management company to help the Board of Directors carry out their operations. The members of an HOA are the residents who live in that community. Here are some examples of typical HOA property restrictions:
- Exterior paint color choices must be submitted for approval
- Grass must be mowed regularly
- Flower beds must be kept weed-free
- Noise regulations and/or noise curfew
- Pet restrictions (type of animal and/or number of pets per household)
Homeowners Association (HOA) Pros and Cons
Living in an HOA community means your property will maintain its curb appeal and you can live with the knowledge that systems are in place to protect property values. However, the benefits come with additional restrictions on your freedoms as a homeowner while increasing your monthly payments.
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How much are HOA fees?
If you buy in a development governed by a Homeowners Association, you will be required to pay HOA fees on top of your monthly mortgage payment. Typically paid monthly, HOA fees go toward the neighborhood’s shared spaces, property maintenance, and amenities. Homeowners Association fees vary greatly depending on the particulars of that community’s agreement. These fees often cover landscaping costs, parking, community security, garbage pickup, maintenance and repair, insurance, and other amenities, such as a shared pool or gym. If the home is your primary residence, your HOA fees are not tax-deductible.
HOA fees are an additional expense you’ll have to budget for when buying a home. To get an idea of what you can afford, ask your lender for a mortgage calculator. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price, accounting for any HOA fees you may incur.
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