HOA Fees in Colorado: What They Cover, What They Cost by City, and What to Check Before You Buy

The short answer

About half of the homes for sale along the Front Range carry an HOA. In the newer suburbs (Parker, Castle Rock, Thornton, Commerce City, Brighton) most houses have one and the fee is small, $50 to $160 a month, because it covers a pool, a park and the covenants. In the condo and townhome markets (Boulder, Lakewood, Englewood, downtown Denver) the fee is $300 to $800 a month because it covers the building itself: roof, structure, master insurance, water, trash and reserves. Downtown towers run $500 to $2,500. The fee is part of your mortgage payment for qualifying purposes: every $100 a month of HOA removes about $15,031 of loan at 7 percent.

Which Colorado cities have HOAs, and what they charge

From this week’s active listings in the 24 largest markets on this site. The share is the percentage of homes for sale carrying a monthly fee; the median is the fee among those that do.

What an HOA fee covers: house versus condo

A single-family HOA in a Colorado subdivision pays for what the neighborhood shares: the pool and clubhouse, parks and trails, entry monuments and medians, snow removal on private streets where there are any, and the management company that enforces the covenants. The house, roof, yard and driveway are yours to maintain and insure.

A condo or townhome HOA pays for the building. The typical Colorado condo fee covers the roof and exterior, the grounds and snow, water, sewer and trash, the master insurance policy on the structure, and a reserve contribution for the next roof and paint cycle. Where the building has elevators, a front desk, a pool or a fitness room, the fee pays the staff and the utilities behind them. Here is what the fee includes on the 150 condos for sale downtown this week:

HOA fee versus metro district: two different bills

Colorado subdivisions built since the 1990s sit inside a metro district, a taxing district that financed the roads, water and sewer lines. The metro district is not the HOA: it appears as a mill levy on the county property tax bill, and it adds 0.3 to 0.6 percent of value a year on top of the county tax. A Parker house can carry a $128 HOA and a $350 a month metro district line at the same time. Ask for both numbers on any home built after 1995, and read the tax bill, not the listing, for the district. New construction pages on this site show the district cost by community.

What a fee does to your payment

Underwriters add the HOA fee to the mortgage payment before testing your debt ratio, so the fee competes with the loan. At 7 percent on a 30-year loan, $100 a month of HOA equals $15,031 of principal; $300 equals $45,092; $800 equals $120,246. Two homes at $500,000, one with a $600 fee and one with none, are $90,185 apart in real cost. Can I afford a home now? runs the full payment with the fee in it.

What to check before you buy into a Colorado HOA

• The budget and the reserve study. Colorado law (the Common Interest Ownership Act) requires the association to hand over its declaration, bylaws, rules, budget and financials, and the Colorado purchase contract gives you an Association Documents deadline to read them and walk away. Read the reserve balance against the reserve study; a roof due in three years with $40,000 in reserves is a special assessment waiting.
• Special assessments, past and pending. Ask for the last three years of minutes. Assessments show up there before they show up on the statement.
• The master insurance deductible. Colorado condo policies now carry deductibles of $25,000 to $100,000 per claim on hail and water; the owner pays the deductible share on a loss. Your HO-6 policy needs loss-assessment coverage sized to it.
• Rental and lease rules. Minimum lease terms, rental caps and short-term rental bans live in the covenants. They decide whether the unit is an investment.
• Transfer fees and working-capital contributions. Many Colorado associations charge the buyer one to three months of dues at closing. It is a closing cost; closing costs for Colorado buyers shows where it lands.
• FHA and VA approval. A condo building must be on the FHA or VA approved list, or pass a single-unit review, for those loans to work. Financing a Colorado home covers the loan side.

Homes without an HOA

Greeley (72 percent of listings have no fee), Windsor (76 percent of listings have no fee), Peyton (81 percent of listings have no fee), Monument (81 percent of listings have no fee), Pueblo (91 percent of listings have no fee) carry the fewest HOAs on this site. Inside Denver, Denver homes with no HOA is the live search; the older neighborhoods (Park Hill, Washington Park, Berkeley, Congress Park) are largely covenant-free.