A Quick Guide to HOA Fees

• HOA fees are mandatory and vary widely depending on location, property type, and amenities.
• Your HOA fee should match what you get, covering maintenance, services, and insurance.
• Buyers should always review CC&Rs and budgets to understand the future cost risks.

When you purchase a home near a new duty station, it is easy to focus only on your mortgage payment. However, if the property is part of a homeowners’ association, you must also budget for mandatory HOA fees. Understanding how these fees work is especially important for military families managing PCS timelines, tight budgets, or future rental plans.

Homeowners’ association (HOA) fees are recurring payments that cover costs such as community maintenance and landscaping, as well as neighborhood amenities and common areas. HOA fees can be used to maintain or improve residents’ quality of life.

A homeowners’ association (HOA) is an organization that establishes and enforces a set of agreed-upon rules in a housing community.

• HOA membership is typically mandatory for anyone who buys a house in the community.
• Homeowners pay regular dues, or HOA fees, to fund community upkeep and services.
• A board of elected homeowners runs the HOA.
• Responsibilities can include maintaining common areas, enforcing community rules or architectural and exterior design standards, managing amenities (pools, gyms, parks), and organizing community improvements.

Because HOA membership is mandatory in these communities, homeowners must pay recurring dues. These fees, sometimes called dues or assessments, are made regularly. Depending on your community, assessments may be monthly, quarterly, biannual, or annual.

Although what they cover varies widely by neighborhood, HOA fees are intended to fund shared services and maintain community standards. Your HOA’s governing documents, often called Covenants, Conditions, and Restrictions (CC&Rs), will outline what is specifically covered for your community. Some examples of what HOA fees can cover include:

• Maintenance services such as community landscaping and ground maintenance, pest control for common areas, upkeep of roads and parking lots, and exterior maintenance of shared buildings like condos and townhomes
• Municipal services such as trash, snow removal, and water and wastewater management
• Legal fees and association insurance, which covers accidents and injuries in common areas, recreational spaces, or sidewalks
• Amenities and services such as pools, fitness centers, gates and security, community rooms, or luxury and concierge services for high-end communities

HOA fees vary but generally cover maintenance, upkeep, and improvements to better your community.

According to U.S. Census Bureau data, HOA fees nationwide can range from under $50 to more than $500 per month, depending on region and property type.

For military families, Basic Allowance for Housing (BAH) can help offset these costs. Since BAH is a flat-rate stipend, you have flexibility in how you use it, including putting it toward HOA fees alongside your mortgage and other housing expenses.

Location

Homes located in retiree-heavy states like Florida, Arizona, and Nevada report a higher proportion of homeowners who pay HOA fees than states like Maine, Wisconsin, Rhode Island, North Dakota, and South Dakota, which reported the fewest homeowners who pay HOA fees.

Property Type

HOA fees can vary based on the type of home you buy and the amenities your community offers. Single-family homes with fewer amenities may have lower HOA fees, while condos, which often have considerably more amenities such as a pool, fitness center, sports facilities, concierge services, and more, may charge higher HOA fees.

Special Fees

In addition to your regular dues, HOAs can impose additional fees or special assessments. These are often one-time charges authorized by the board to cover unexpected costs, such as major repairs or non-routine maintenance. Special assessments may also be used to build up the HOA’s reserve fund in anticipation of a big future project that regular fees wouldn’t cover.

Fines

If you fail to abide by your HOA’s rules–like keeping your yard mowed, choosing the right exterior paint color, or failing to take your Christmas decorations down on time–you may find yourself subject to a fine. Your community’s CC&Rs should clearly outline potential fines.

HOA fees can increase over time. Inflation is a significant factor in fee increases. If your HOA fees cover the cost of goods and services, such as ground or pool maintenance, and that service provider raises their costs, the HOA will pass those costs on to the homeowners. Fees can also increase if the board projects extensive repairs or as infrastructure ages and needs more frequent maintenance.

Another reason your HOA fees might jump up, or your HOA might decide to levy a special assessment, is that they are conducting a reserve study. A reserve study helps an HOA plan for major future repairs, such as roof replacement or road repaving, and determines how much should be set aside in reserve funds. If reserves are underfunded, homeowners may face fee increases or special assessments.

For active-duty military members, it’s worth knowing that the Servicemembers Civil Relief Act (SCRA) offers some protection if you fall behind on fees. The SCRA caps interest rates on pre-service debts at 6% and prevents HOAs from pursuing certain foreclosure actions without a court order, giving deployed or relocating service members some financial breathing room.

When you’re budgeting to buy a home, you definitely need to account for HOA fees. Homebuyers should ask questions to determine if the value the HOA provides outweighs the cost of the fees. Ask questions like:

• What do the HOA fees cover?
• What is the recent fee history?
• Are there any pending assessments that may incur additional fees?
• What is the current reserve fund status?

After reviewing what the fees cover and any upcoming expenses, determine whether the cost aligns with the home’s value and the services provided.

If you’re using a VA loan, pay particular attention to HOA fees during the budgeting process. Lenders include HOA fees when calculating your debt-to-income ratio, which can affect your loan eligibility. High fees could also reduce the amount you can borrow or make the home harder to afford over time.

Before signing a contract on a home governed by an HOA, you should always review the association’s financial statements, meeting minutes, and CC&Rs to make sure the HOA is transparent and well-managed.

If you’ve decided that the HOA provides adequate value and you buy a home, as a homeowner, you should prioritize attending meetings, joining boards or committees, and pushing for transparent budgeting. Being involved in your HOA gives you an opportunity to have a say in decisions, preserve the value of your home, and improve the community you live in.

How do you weigh whether living in an HOA community is worth it? Here are some pros and cons to help you decide:

Pros of HOA Fees

• Protects Property Values– Community standards help keep the neighborhood looking good and prevent neglected homes from dragging down values.
• Well-Maintained Community– The HOA handles landscaping, shared areas, and community maintenance, saving you time and effort.
• Fewer Neighbor Conflicts– The HOA enforces rules, helping prevent issues like noise, messy yards, or parking disputes.
• Added Safety– Many HOA neighborhoods include security features that enhance safety.
• Amenities Included– Pools, gyms, parks, and other perks are available without you having to worry about the upkeep.

Cons of HOA Fees

• Extra Monthly Expense– Mandatory fees can add an unwelcome cost to your housing budget.
• Rules and Restrictions– HOAs may regulate things like exterior paint colors, parking, or decorations.
• Potential Fee Increases– Fees can go up, and unexpected special assessments may be charged for large repairs.
• Less Flexibility– Customizing your home’s look or adding certain features may require approval or might not be allowed.

If you are looking to preserve resale value, take advantage of amenities, and prefer a neighborhood with a more uniform appearance, an HOA community may suit you well. If you value individuality, the ability to customize, and more freedom when it comes to your home’s exterior and grounds, you may not be happy living in an HOA community.

If you’ve ever lived in military base housing, living in an HOA community can have a similar feel. For those whose daily lives are governed by rules and regulations, that can be either a comfort or a reason to steer clear.

HOA fees can affect your bottom line if you rent out the home. Ensuring your budget covers both the mortgage and HOA fees is essential. You may structure your lease so that rental income accounts for HOA fees, but you remain legally responsible to the association for payment and compliance.

Are HOA Fees Tax Deductible?

HOA fees are generally not tax-deductible for a primary residence. However, if you rent out the property, HOA fees may be deductible as a rental expense for the period the home is used as an income-producing property. Tax situations vary, so consult a qualified tax professional before claiming deductions.

Does Your HOA Allow Renting?

If you’re buying a home and plan to rent it when you PCS again, you’ll need to make sure your HOA allows renting. Some HOAs require prior approval to rent, copies of leases, or minimum lease terms to keep the community feel of the neighborhood. Renting out your HOA community home can be a great option, but it comes with specific rules and responsibilities for both landlords and tenants. Landlords are still responsible for HOA fees and for ensuring their tenants comply with HOA rules, and should include all HOA information in the rental agreement. Many renters don’t realize they must follow HOA guidelines, which can lead to surprise fines or lease issues for you as the landlord.

Before you buy a home and commit to paying HOA fees, be sure to:

• Confirm current dues and review the history of past increases
• Request the HOA budget and reserve study to understand financial health
• Verify what your fees cover (amenities, maintenance, utilities, etc.)
• Ask about upcoming major repairs or possible special assessments
• Check the rental rules if you plan to rent out the property
• Plan your budget to include HOA fees, mortgage, insurance, and other costs

Before you decide to buy a home, it’s essential to take a close look at whether HOA fees exist and what amenities and services they cover, so you know exactly what you’re signing up for. While they do add to your overall monthly housing costs, a good HOA can give you real value in return. Just make sure you do your homework, understand what the fees cover, and factor them into your budget. A little upfront checking can help you find a place and a community that feels like home.