The Role of HOA Fees in Your Monthly Budget

Jeffrey Brager
Sep 4
2 min read

When you’re calculating how much home you can afford, it’s easy to focus only on the mortgage, property taxes, and insurance. But if you’re buying in a community with a homeowners association (HOA), there’s another cost you need to plan for: HOA fees. These monthly or quarterly payments can significantly impact your budget — and your lifestyle.

What Are HOA Fees?

HOA fees are payments made by homeowners in certain neighborhoods, condo buildings, or planned communities. These fees cover the cost of maintaining shared spaces and services, which can range from landscaping and security to community pools and gyms.

How HOA Fees Affect Affordability

Lenders consider HOA fees when calculating your debt-to-income (DTI) ratio, which means they directly impact how much you can borrow. A $400 monthly HOA fee could reduce the mortgage loan you qualify for by tens of thousands of dollars.

Example:

Without HOA fees: $2,000/month mortgage budget.
With $400 HOA fees: only $1,600 left for your mortgage payment.

The Benefits of HOA Fees

Well-Maintained Community – Landscaping, exterior upkeep, and repairs keep the neighborhood looking great.
Amenities – Access to pools, gyms, clubhouses, or parks.
Added Security – Gated entrances, security patrols, or cameras.
Property Value Protection – HOAs enforce rules that prevent neglected homes from dragging down values.

The Drawbacks of HOA Fees

Ongoing Expense – They never go away and may increase over time.
Restrictions – HOAs often set rules about paint colors, fences, or even parking.
Budget Strain – Higher fees may reduce your flexibility for savings or other expenses.
Special Assessments – Unexpected costs can arise if major repairs are needed.

How to Plan Ahead

Ask for the HOA fee amount upfront when looking at homes.
Review what the fees include — not all communities provide the same services.
Factor the fee into your monthly budget before making an offer.
Check the HOA’s financial health — poorly managed HOAs may charge surprise assessments.

Final Thoughts

HOA fees can add real value by maintaining the community and providing amenities, but they also affect your affordability. By understanding what’s included and planning for them in your budget, you can make sure your new home is a financial fit as well as a lifestyle match.