HOA Fee for New Loans vs Refinancing

Started by EricaA • 26 replies • 245 views

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EricaA (Colorado)
Posts: 5

Posted:

Question: What are typical HOA fees for new loans, refinancing, and limited reviews?

I'm seeking perspective on what volunteer HOA boards typically charge for loan-related fees and whether different types of transactions (new purchase loans vs. refinances vs. limited reviews) warrant different fee amounts.

Background:

My partner and I purchased our unit in a 9-unit condo HOA in June 2024. In October, the HOA voted to approve a fee for "new loans" that was tied to the monthly HOA fee amount. Most owners have been here 10-20+ years, and there was no previous fee structure for loans or refinancing. No documentation was provided clarifying whether this applied to refinancing or what "new loans" specifically meant.

The Issue:

When we attempted to refinance recently, our lender was notified the HOA fee would be $500 (our lender noted this seemed high given we qualified for a limited review requiring only an insurance copy and a one-page questionnaire). We've since had two meetings with our board that yielded conflicting information:

-Stated rationale #1: The work involved justifies the fee, and since it doesn't benefit the HOA, owners should pay
-Stated rationale #2: The fee helps ensure collection (they were unable to collect a previous $75 fee)
-Board position: No distinction should be made between new loans and refinances, despite different lender requirements

We proposed a tiered structure (new loan $500, full refinance $250, limited review $75-100) that wasn't tied to the monthly fee. The board rejected this as too confusing, stating they can't determine what's in a loan package when requested.

My Questions:

1. What do most small volunteer HOA boards charge for loan-related services?
2. Is it standard to charge the same fee regardless of whether it's a purchase, refinance, or limited review?
3. How are these fees typically determined and structured?

Any insights would be appreciated as we work toward a reasonable solution.

LetA (Nevada)
Posts: 2,679

Posted:

What is the purpose of your HOA getting into the loan business?
I'm confused, what is the purpose of said "fees"

The HOA should stay out of the private affairs of the homeowners.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By LetA on 11/21/2025 7:50 PM
What is the purpose of your HOA getting into the loan business?
I'm confused, what is the purpose of said "fees"

The HOA should stay out of the private affairs of the homeowners.

It’s not the HOA intruding on the affairs of the owner - It’s the lenders gathering information to understand the impact of HOA rules, fees and liabilities on a borrower's ability to repay the loan. Mortgage companies may request burdensome information from HOAs to assess risk and verify the financial health of a property before approving a loan. This can include a property's governing documents, financial statements, insurance, engineering inspection reports, owner delinquencies, number of rental units and a full breakdown of assessments, fees and financial projections.

I can’t imagine what a lender would require from a high rise HOA in FL these days. It really makes zero difference if the loan is new or a refi because mortgage company is going to want all this stuff regardless.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By EricaA on 11/21/2025 12:27 PM
Question: What are typical HOA fees for new loans, refinancing, and limited reviews?

I'm seeking perspective on what volunteer HOA boards typically charge for loan-related fees and whether different types of transactions (new purchase loans vs. refinances vs. limited reviews) warrant different fee amounts.

Background:

My partner and I purchased our unit in a 9-unit condo HOA in June 2024. In October, the HOA voted to approve a fee for "new loans" that was tied to the monthly HOA fee amount. Most owners have been here 10-20+ years, and there was no previous fee structure for loans or refinancing. No documentation was provided clarifying whether this applied to refinancing or what "new loans" specifically meant.

The Issue:

When we attempted to refinance recently, our lender was notified the HOA fee would be $500 (our lender noted this seemed high given we qualified for a limited review requiring only an insurance copy and a one-page questionnaire). We've since had two meetings with our board that yielded conflicting information:

-Stated rationale #1: The work involved justifies the fee, and since it doesn't benefit the HOA, owners should pay
-Stated rationale #2: The fee helps ensure collection (they were unable to collect a previous $75 fee)
-Board position: No distinction should be made between new loans and refinances, despite different lender requirements

We proposed a tiered structure (new loan $500, full refinance $250, limited review $75-100) that wasn't tied to the monthly fee. The board rejected this as too confusing, stating they can't determine what's in a loan package when requested.

My Questions:

1. What do most small volunteer HOA boards charge for loan-related services?
2. Is it standard to charge the same fee regardless of whether it's a purchase, refinance, or limited review?
3. How are these fees typically determined and structured?

Any insights would be appreciated as we work toward a reasonable solution.

Sometime HOAs have initiation fees, but I haven’t owned in an HOA that collected loan processing fee.

I’d ask your HOA for the section in your declaration that authorizes the HOA to establish and collect this fee.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

This seems to be a "cost of business" for HOA management companies and is baked into expected services.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By EricaA on 11/21/2025 12:27 PM

My Questions:

1. What do most small volunteer HOA boards charge for loan-related services?
2. Is it standard to charge the same fee regardless of whether it's a purchase, refinance, or limited review?
3. How are these fees typically determined and structured?

Any insights would be appreciated as we work toward a reasonable solution.

Some fee is not unreasonable. Your options:

-- What does the association charge for the HOA disclosure required before closing?

-- Ask the board to justify the charge of $500.

-- Challenge the fee in court as being "unreasonable."

-- Elect new directors to the board.

EricaA (Colorado)
Posts: 5

Posted:

I do not believe there was a disclosure fee when we closed on our property in June 2024.

The HOA voted to approve the loan related fee in October 2024, but there were no details in writing given and we didn't think to ask, as we were under the impression a 'new loan' meant the process of a new owner taking over the property, not refinancing. The initial reason we were given (at an HOA meeting in August 2025), was that the time it takes for the treasurer and secretary to collect the paperwork and fill out the questionnaire were inordinate and because they do not benefit the HOA, there should be a fee. The second reason we were given, in our last meeting in November, was that there was a $75 fee instituted many years ago, but I guess no one paid it (which was an odd excuse, because it didn't seem our lender was getting past it). We did propose a tiered fee structure, but they've said it's too complicated to decipher different loan types, so we are looking for reasonable fees instituted by similar volunteer HOA boards. We're hoping we can give them enough background information to support a reasonable fee. We don't currently plan to take this to court. We do have a new board president, but I don't think there are too many interested in the role of treasurer (or secretary), although it may come to that.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By EricaA on 11/23/2025 10:47 AM
The initial reason we were given (at an HOA meeting in August 2025), was that the time it takes for the treasurer and secretary to collect the paperwork and fill out the questionnaire were inordinate and because they do not benefit the HOA, there should be a fee.

The treasurer and secretary are almost always volunteers, receiving no compensation. Is this the case for your association?

If so, associations are not supposed to bill owners for non-existent expenses.

Most likely, buried in the bylaws or declaration is wording to this effect.

Fighting this is another matter. You could threaten suit, but you will become pariahs.

I have not heard of any fee for the association's paperwork for a refinancing of any kind. I have only heard of fees for new owner purchases, charged at closing.

EricaA (Colorado)
Posts: 5

Posted:

Yes, something someone else mentioned here prompted me to look into what CO law says, and if it's not in the bylaws, it's not legal. Our covenant doesn't seem to state the HOA can collect loan processing fees, so this looks like our best 'defense' /argument against the fee.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Our covenant doesn't seem to state the HOA can collect loan processing fees, so this looks like our best 'defense' /argument against the fee.

You could also point out that this fee is not "exempt function income." This may cause problems when filing the HOA's tax return.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By EricaA on 11/23/2025 11:24 AM
Yes, something someone else mentioned here prompted me to look into what CO law says, and if it's not in the bylaws, it's not legal. Our covenant doesn't seem to state the HOA can collect loan processing fees, so this looks like our best 'defense' /argument against the fee.

Good work.

BryonW (Massachusetts)
Posts: 55

Posted:

Hi EricaA -

1) My property manager charges $245 to fill out a lender questionnaire, and provide copies of the bylaws, etc. This is a professional manager, not a volunteer board.

2) Our fee is the same regardless of loan type. It is the same documents, same amount of work.

3) In theory the cost should be based on the number of hours of work. And it should be no more than 1 hour to put together a lender response (assuming bookkeeping and records are otherwise kept up to date). But in reality I think people set the fee based on “what’s the most I can get away with”. And that’s really frustrating.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By BryonW on 11/25/2025 12:03 PM
Hi EricaA -

1) My property manager charges $245 to fill out a lender questionnaire, and provide copies of the bylaws, etc. This is a professional manager, not a volunteer board.

2) Our fee is the same regardless of loan type. It is the same documents, same amount of work.

3) In theory the cost should be based on the number of hours of work. And it should be no more than 1 hour to put together a lender response (assuming bookkeeping and records are otherwise kept up to date). But in reality I think people set the fee based on “what’s the most I can get away with”. And that’s really frustrating.

HOA managers can charge non owners any fee they desire. Owners have already paid for PM services and an owner unhappy with this charge to take both the HOA and management company to small claims court.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By DeanJ on 11/22/2025 12:18 AM

The fee seems ungodly unreasonable and unethical. these documents should be readily available upon request as any publicly traded company's financial health statements. We are in the digital age, it does not cost $500 to hit the attach icon on an e-mail and hit select then send.

Any well run HOA is going to have a their financials on a couple of excell spreadsheets including the data needed for an estopel letter.
This information should already be second nature to an HOA's ongoing bookkeeping.

EricaA (Colorado)
Posts: 5

Posted:

Thank you for your feedback. It's helpful to hear from people who have experience in these arenas, as I'm a first time homebuyer and figuring out the ropes. I've had trouble finding data for what a typical HOA would charge for loan processing fees, but the consensus between humans and AI seems to be that between $50 and $100 is what's typical for a limited review and $250-$600 for a full review. Though part of the problem we're having is that our HOA doesn't want to distinguish between the two because they say its too much work to decipher when its a limited review vs a full, and they also have said they don't know what type of laon it is when it comes in from the lender. Additional feedback I've gotten questions the legality of HOAs imposing fees that are not in their bylaws, though all of that seems very unclear to me at the moment (whether it falls under reasonable fees they are privy to introducing). I appreciate your perspective and if you have any additional insight, I'm listening.

DavidJ21 (Arizona)
Posts: 22

Posted:

This is essentially an estoppel fee. The work required is essentially the exact same whether it is a new loan, a refinance, or a "limited-review" and should be charged the same amount. In the state of Florida, the max fee you can charge for a condo is $299 and you can add a "rush" fee of up to $119. In Florida there is NO such thing as Condo HOA. It is a COA.

Colorado may not distinguish Condos as such, but keep in mind, you live in a condo. They aren't just mortgages for the interior of the unit. They are providing a mortgage for the general health of the community and all the units.

The reality is this is work. For instance, recently, I filled one of these out for a homeowner because the property management firm was having a hard time answering the one-page questionnaire, which had a lot of very specific things.

In our case our condo has a code violation out and we have had an engineering study to assess the safety of our stairs into each unit and this was a question asked. Our property management has a back office that handles a lot of these requests, but they aren't familiar with the property and it takes a lot of back forth with all parties. My hourly rate at my day job is $500 fwiw.

I believe lenders have gotten a lot stricter in loaning to condos in Florida because of the condo crisis and I suspect this will translate to the rest of the country as lenders understand that communities continue to fall into disrepair. Times have changed. I was even asked if I could lie on one to help it go through. People legitimately don't really understand how much work being a GOOD board member is.

Sure you can fill out the form FAF, and I am sure there are boardmembers and properties that do because they don't care about being sued down the line.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By DavidJ21 on 11/29/2025 10:55 AM
This is essentially an estoppel fee. The work required is essentially the exact same whether it is a new loan, a refinance, or a "limited-review" and should be charged the same amount. In the state of Florida, the max fee you can charge for a condo is $299 and you can add a "rush" fee of up to $119. In Florida there is NO such thing as Condo HOA. It is a COA.

Colorado may not distinguish Condos as such, but keep in mind, you live in a condo. They aren't just mortgages for the interior of the unit. They are providing a mortgage for the general health of the community and all the units.

The reality is this is work. For instance, recently, I filled one of these out for a homeowner because the property management firm was having a hard time answering the one-page questionnaire, which had a lot of very specific things.

In our case our condo has a code violation out and we have had an engineering study to assess the safety of our stairs into each unit and this was a question asked. Our property management has a back office that handles a lot of these requests, but they aren't familiar with the property and it takes a lot of back forth with all parties. My hourly rate at my day job is $500 fwiw.

I believe lenders have gotten a lot stricter in loaning to condos in Florida because of the condo crisis and I suspect this will translate to the rest of the country as lenders understand that communities continue to fall into disrepair. Times have changed. I was even asked if I could lie on one to help it go through. People legitimately don't really understand how much work being a GOOD board member is.

Sure you can fill out the form FAF, and I am sure there are boardmembers and properties that do because they don't care about being sued down the line.

Florida may permit this fee, but absent law I question if it is permitted. Some may argue it’s not the HOA charging the fee, but the reality is the HOA is authorizing the management to collect this fee. And if the board has not authorized the management to collect this fee, under what authority are they doing it? The unit owner and the management company do not have a service agreement.

EricaA (Colorado)
Posts: 5

Posted:

That's a helpful perspective and has pretty much been the treasurer and secretary's angle, however, our lender has told us and I've looked at multiple other sources of information, that say asking for one document (insurance, which we should have access to for free) and a questionnaire of 10 or less questions is not the same as a full review, and should take a fraction of the time (as long as there are no major issues).

Part of our concern with the way this fee was implemented was that it was voted on last October with no clarification for what the treasurer meant by 'new loans.' My partner and I assumed that meant a new purchase, I'm not sure what other homeowners thought. And there was no documentation. I am learning a lot about CO law, fee loan forms/applications, etc. I'm still not convinced that a limited review is the same work as a full review, considering the amount of documents needed is vastly different. And from what I understand, many management companies charge differently for limited reviews vs. full reviews.

I do understand how times are changing and condos are under pressure on a number of fronts, so it's not having a fee we're disputing, but the amount (we're not in million dollar units) and if the board is unwilling to differentiate between limited reviews and full reviews and new purchases, then we from what we understand, $500 is way outside the market rate.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

In Florida, some single family home HOAs are legally organized as a condominium association.

In Florida, it is the Division of Florida Condominiums, Timeshares, and Mobile Homes (in the Department of Business and Professional Regulation) that responds to complaints of election violations.

If one wants to make a distinction and be clear, one states whether the association is subject to FS 718 or FS 720.

ElleN (Idaho)
Posts: 1,338

Posted:

Quote:

Posted By ElleN on 11/30/2025 9:27 AM

In Florida, it is the Division of Florida Condominiums, Timeshares, and Mobile Homes (in the Department of Business and Professional Regulation) that responds to complaints of election violations.

... for FS 720 homeowners' associations (among other associations).

DavidJ21 (Arizona)
Posts: 22

Posted:

Yes correct, each Florida COA or HOA has a fee schedule for the master agreement between the COA/HOA and the property management firm. The agreement isn't between the unit owner and the property management firm. While I have personally filled out the form for residents and even had conversations with mortgage brokers, the reality is one isn't going to get their mortgage without the questionnaire being filed out.

The fee limit exists for a reason: to prevent property managers from price gouging. Maybe one is savvy enough to understand all this and can get their board to fill it out, but let's be honest. The regular posters here on HOATalk are a special sort of person. Most board members don't really want to be bothered IME.

JulieH4
Posts: 75

Posted:

This is a great thread! I am a property manager of a self managed HOA.

When the banks send these 7 page forms for me to fill out for someone to get a mortgage, our HOA doesn't charge anything. We do require a resale certificate fee of $375 but that's a 4 page document I can do in Adobe.

I need to go to the Board about starting fees for that. They are a PAIN to fill out and it's not computerized. I have to print it out, fill it out, then scan and email it back.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By JulieH4 on 12/08/2025 12:36 PM
This is a great thread! I am a property manager of a self managed HOA.

When the banks send these 7 page forms for me to fill out for someone to get a mortgage, our HOA doesn't charge anything. We do require a resale certificate fee of $375 but that's a 4 page document I can do in Adobe.

I need to go to the Board about starting fees for that. They are a PAIN to fill out and it's not computerized. I have to print it out, fill it out, then scan and email it back.

Honestly, I never heard of a property manager at a self managed HOA. When an HOA is self managed, the board is the management.

I think completing and maintaining daily logs for water quality testing of the pool and meeting with health inspectors is a PAIN. That doesn’t mean the HOA gets separately bill the owners who opt to use the pool. If you are compensated, you are already being compensated to perform functions for the homeowners.

The purpose of a PM is to serve both the board and the owners. If you have accepted a volunteer position as PM, the HOA should compensate you for various tasks you find a burden, not the owners directly.

JulieH4
Posts: 75

Posted:

Quote:

Posted By DeanJ on 12/10/2025 10:49 PM

Posted By JulieH4 on 12/08/2025 12:36 PM

Honestly, I never heard of a property manager at a self managed HOA. When an HOA is self managed, the board is the management.

I think completing and maintaining daily logs for water quality testing of the pool and meeting with health inspectors is a PAIN. That doesn’t mean the HOA gets separately bill the owners who opt to use the pool. If you are compensated, you are already being compensated to perform functions for the homeowners.

The purpose of a PM is to serve both the board and the owners. If you have accepted a volunteer position as PM, the HOA should compensate you for various tasks you find a burden, not the owners directly.

Not for me personally, that would be wrong. I mean for the HOA. With all the increases and inflation recently, we have very little to spare. It might help. That's all I meant.

And yes, the Board says we are a self managed HOA with a property manager onsite. I take care of everything for the HOA and the Board only has to approve expenses and sign checks. We meet quarterly and email weekly about what is being done or needs to be done.

It's worked here for over 50 years, they are happy and I'm happy to be here.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By JulieH4 on 12/11/2025 11:03 AM

Posted By DeanJ on 12/10/2025 10:49 PM

Not for me personally, that would be wrong. I mean for the HOA. With all the increases and inflation recently, we have very little to spare. It might help. That's all I meant.

Again, under what authority in your HOA declaration will your be imposing this fee? Completing forms is administration. Probably every single unit in your HOA will require the preparation of these documents at least once, if not many times. It’s part of normal HOA operations.

.

DeanJ
Posts: 1,786

Posted:

Surprisingly, this fee came up at a gathering of some homeowner in my HOA, one of which is a realtor. A management company in the area is using a third party contractor to process these requests and charging $500. Why owners are paying these fees are a bit baffling.

JulieH4
Posts: 75

Posted:

That would be for the Board to change our documents to include it. They have been discussing it but we barely get quorums at meetings, let alone the 67% needed to change our governing documents.

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