The Growing Financial Pressure Facing HOA and Condo Residents

HOA and condo residents are facing growing financial pressure as higher costs, underfunded reserves, and stricter lending requirements collide. At the same time, HOA-related foreclosures have jumped nearly 40% in two years, raising concerns about what happens when struggling associations pass their financial problems on to homeowners. Tim Lucas and Craig Berry examine the new condo reserve requirements, why dues could rise, and how unpaid HOA assessments can ultimately put a homeowner’s property at risk.Connect with Mortgage Research Network:YouTube: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.youtube.com/@MortgageResearchNetwork⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.instagram.com/mortgageresearchnetwork/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Facebook: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.facebook.com/mtgresearchnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠MortgageResearch.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠First Time Homebuyer Cheat Sheet: https://bit.ly/4w8CiVMHomebuyer Calculators: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4n0hDPv⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Connect with a lender: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/426GyawIn this episode you'll learn:Why some condo owners could face higher dues: New Fannie Mae and Freddie Mac requirements generally call for condo associations to direct more of their income toward reserve funding.Why reserve funds matter: Associations use reserves to pay for major repairs and replacements, helping reduce the need for large unexpected special assessments.How widespread underfunding may be: Only about one-quarter of condo reserve funds are considered well-funded, leaving many associations with limited financial cushions.What the new requirement could cost residents: Fannie Mae estimates the higher reserve contribution could add roughly $13 to $14 per month for some condo owners.Why ignoring the rules could affect property values: Condos that do not meet Fannie and Freddie requirements may be harder to finance, potentially shrinking the pool of prospective buyers.Why HOAs are under pressure too: Rising insurance premiums, maintenance costs, and inadequate reserves are putting financial strain on many community associations.How HOA-related foreclosures are changing: Foreclosures tied to unpaid association dues increased nearly 40% over the two years ending in the first quarter of 2026.How unpaid dues can threaten a home: Depending on state law and governing documents, associations may place liens on properties and eventually pursue foreclosure to collect delinquent assessments.Why foreclosure practices vary: Industry groups recommend giving homeowners notice and opportunities to resolve delinquent balances, but those guidelines are not legally binding on every association.The big takeaway: Stronger reserves can make condo and HOA communities more financially stable over the long term, but getting there may mean higher costs for residents today. Homeowners should pay close attention to their association’s reserves, dues, insurance expenses, and collection policies.Read the full article: https://www.mortgageresearch.com/articles/hoa-condo-financial-pressure-foreclosures/