Understanding HOA Finances
Before buying, review the HOA's budget, reserve fund, and history of special assessments. A well-funded reserve (typically 10-25% of the annual budget) indicates the association is planning ahead for major repairs. Low reserves or frequent special assessments are red flags.
Financing Considerations
Some condo complexes are not FHA or VA approved, which limits your financing options. Lenders also review the HOA's financial health, owner-occupancy ratio, and litigation history before approving the loan. Ask your lender about project approval early in the process.
What the HOA Controls
HOA rules govern what you can and cannot do with your unit — from exterior modifications to pet policies to rental restrictions. Read the governing documents (CC&Rs, bylaws, rules and regulations) before committing to buy.
