An association that manages a condo or townhome complex and establishes certain rules of ownership.
A homeowners association or HOA is an association that manages a condo or townhome complex and establishes certain rules of ownership. Typical responsibilities of a homeowner’s association include collecting HOA dues (fees) for landscaping or recreation areas, building maintenance, common area property insurance, and creating and enforcing community bylaws.
You will most commonly see HOAs on condo and townhome properties, but small HOAs can also be present on single-family homes. HOA dues are most typically paid to the HOA on a monthly or quarterly basis, and their monthly expense must be factored into qualification (see Debt-to-Income ratio). For condos and townhomes, lenders must obtain additional documentation regarding the HOA in their qualification analysis to ensure the HOA is in good standing.