Is that Scottsdale condo or townhome really in your budget? The HOA fee can change the math more than you think. If you are comparing homes across DC Ranch, Scottsdale Ranch, or a gated golf community, understanding how dues affect your loan approval and monthly costs is essential. In this guide, you will learn how lenders count HOA fees, what those dues typically cover, and how to evaluate an HOA’s financial health before you buy or sell. Let’s dive in.
HOA fees in Scottsdale: why they matter
HOAs are common across Scottsdale, from condos near Old Town to master-planned and gated single-family communities. Fees range widely because responsibilities vary by association and amenity level. Luxury communities with pools, landscaping, and security tend to have higher dues than smaller neighborhood associations.
For your budget, HOA fees are not optional. They are a fixed monthly cost that sits alongside your mortgage, taxes, and insurance. Because lenders treat HOA dues as part of your housing expense, they can reduce how much you qualify to borrow and influence your total monthly payment.
How lenders count HOA fees
Lenders include HOA fees in the housing expense used to determine your debt-to-income ratio. This applies to most loan programs, with program-specific limits and lender overlays. Higher HOA dues reduce the mortgage payment you can carry within those limits, which can lower your maximum purchase price.
- Conventional loans often use housing ratios in the 28 to 35 percent range and total DTI up to roughly 43 to 50 percent, depending on the file.
- FHA typically allows around 31 percent front-end and 43 percent back-end, subject to updates and lender rules.
- VA uses different ratio and residual income standards, and lender overlays are common.
Example monthly cost snapshot
When you estimate your payment, include every housing cost:
- Principal and interest
- Property taxes
- Homeowner’s insurance
- HOA dues
- Mortgage insurance, if applicable
For example, if your mortgage payment is $2,400, taxes are $300, insurance is $100, and the HOA fee is $350, your total housing cost is $3,150 per month. Reducing dues or choosing a home without an HOA can increase the mortgage payment you can carry within your target DTI.
Condo financing and approvals
If you are buying a condo in Scottsdale, the project itself must meet lender and program standards. Some loan types require project approval. Lenders may also review the HOA’s budget, reserves, insurance, owner-occupancy ratio, and delinquency rates. Thin reserves, many investor-owned units, high delinquencies, or active litigation can make financing harder or limit certain loan programs.
Fee increases and special assessments
Most HOAs raise dues over time to keep up with costs. It is wise to model annual increases of 3 to 5 percent in your budget. Special assessments can occur for major repairs or shortfalls and may create large one-time obligations. Planning for this risk helps you avoid surprises after closing.
What HOA fees cover
What dues include depends on the community. In Scottsdale, common inclusions are exterior maintenance, common-area landscaping, pools and spas, security services, street or entry maintenance in private communities, common-area utilities, trash, community insurance for shared elements, and amenity operations.
Some HOAs bundle water, sewer, or cable and Internet. Others fund roof replacement or structural items in attached communities. Reserve contributions are also part of many budgets, which are set aside for long-term capital projects such as repaving or pool equipment.
Reserves and reserve studies
A strong reserve fund protects owners from large surprise bills. A professional reserve study analyzes expected future repairs and recommends funding levels. A missing or outdated reserve study, or a low reserve balance, is a red flag that can increase the chance of special assessments.
Insurance details that matter
The HOA’s master insurance policy covers common elements and sometimes exterior components, while you carry interior and contents coverage as an owner. Review what the master policy covers and note the deductible. A high deductible can translate into significant per-unit assessments if there is a covered loss.
Delinquency, rules, and litigation
High owner delinquency strains cash flow and can lead to fee hikes or assessments. Review recent financials and board minutes to spot trends. Rules on rentals, pets, parking, and remodeling can shape demand and resale value by influencing the pool of potential buyers. Active lawsuits involving the association may affect underwriting and should be reviewed carefully.
How to evaluate an HOA before you buy
Request and review these items early in your due diligence:
- HOA budget and year-to-date operating statement
- Reserve study and current reserve balance
- Board meeting minutes for the past 6 to 12 months
- CC&Rs, bylaws, and rules and regulations
- Master insurance declarations and deductibles
- List of pending or recent special assessments
- Current monthly fee and a 3 to 5 year fee history
- Delinquency rate for owner dues
- Rental restrictions and occupancy limits
- Any active litigation
- Management company details
- For condos, owner-occupancy and investor concentration
Lender and loan steps
- Share the HOA fee with your lender at pre-approval so it is included in DTI.
- For condos, ask whether project approval is required and whether the project qualifies.
- If you plan to rent the unit, confirm how rental rules and potential income are treated by your lender.
Affordability modeling tips
- Treat HOA dues as part of your fixed housing cost, not a separate line item.
- Model 3 to 5 percent annual increases and a what-if scenario for a one-time assessment.
- Compare total cost across property types, such as a condo with HOA services versus a single-family home without an HOA, to see where you get the best value for your needs.
Negotiation strategies
- If reserves are weak or an assessment is pending, use that to negotiate a price reduction or a seller credit.
- Include an HOA document review contingency in your offer and give yourself time to analyze the materials.
- If investor limits or rental caps apply, ensure your contract addresses any required approvals.
Guidance for Scottsdale sellers
Be transparent about HOA dues and what they cover in your listing and marketing. If fees are on the higher side, highlight the value to buyers, such as included maintenance, amenities, security, or insurance components that lower out-of-pocket costs. Providing fee history, reserves information, and clear rules can reduce friction with buyers and help the lender’s underwriting.
If your condo community lacks certain program approvals, note that in your pricing and positioning. Work with your agent to make documents readily available so interested buyers can move forward with confidence.
Comparing HOA and non-HOA options
There is no one-size-fits-all answer in Scottsdale. A condo with a higher fee may still be the right choice if it includes substantial maintenance and amenities that you value. A single-family home without HOA dues may offer lower monthly costs but more responsibility for upkeep.
Focus on the total monthly cost, the stability of the HOA’s finances, and how the rules fit your lifestyle. This approach helps you pick the property that aligns with your budget and goals.
Your next step in Scottsdale
Before you write an offer, gather the HOA documents, confirm the fee with the lender, and model your total monthly cost with realistic increases. If you are selling, prepare a clean package of HOA information and position the benefits clearly for buyers.
If you want a clear, numbers-first look at your options, our team can help you compare neighborhoods and costs side by side and set up property alerts that match your criteria. When you are ready, get a fast estimate of selling potential or set a plan for your next purchase.
Ready to run the numbers or review HOA documents together? Get your Instant Home Valuation and schedule a consult with The Real Estate Experts of Phoenix.
FAQs
Do HOA fees count toward mortgage qualification in Scottsdale?
- Yes. Lenders include HOA dues in your monthly housing expense or recurring debt, which reduces the mortgage payment you can support within debt-to-income limits.
What is a typical HOA fee in Scottsdale?
- Fees vary widely by property type and amenities. Some single-family neighborhoods have modest dues, while condos and luxury communities can be several hundred dollars per month or higher. Always verify the current fee in the HOA documents.
How do special assessments affect my budget?
- Special assessments are one-time charges for major repairs or shortfalls and can significantly increase your costs. Review reserves, meeting minutes, and any pending projects to gauge this risk before you buy.
What do HOA fees usually cover in Scottsdale communities?
- Common items include exterior upkeep, landscaping, pools and spas, security, common-area utilities, entry and street maintenance in private communities, and community insurance. Some associations include water, sewer, or bulk internet.
Can I finance a Scottsdale condo if the HOA’s finances are weak?
- Possibly, but lenders may require more documentation, higher reserves, or deny certain government-backed loans if the project fails program standards. Check budget strength, reserves, delinquencies, and any litigation early in the process.
Do HOA rental restrictions affect resale value?
- Rental caps and short-term rental bans can limit investor demand and reduce the future buyer pool. Review the rules to understand how they may influence your exit options and pricing.
