The High Cost of Low Dues: Why “Saving” Money in Your HOA Might Cost You Everything

Saving money feels good. For homeowners’ associations (HOAs) and condominium owners’ associations (COAs), resisting the urge to raise dues can feel like a win—proof that the board is being fiscally responsible.

But what if I told you that keeping dues low can end up costing homeowners more—much more—than what they thought they were signing up for?

In a growing number of communities across the country, including right here in Idaho, we’re seeing the consequences of underfunding play out in real time. From surprise special assessments to Fannie Mae blacklists that make entire condos unsellable, the illusion of short-term savings is unraveling—and homeowners are left footing the bill.

This piece is a call to action for board members and homeowners alike: smart planning beats temporary relief, and the most expensive mistake an HOA can make is choosing to do nothing.

I. The Colorado Warning: When Cheap Insurance Turns into Unsellable Property

In March 2025, The Colorado Sun reported a chilling trend: entire condo complexes were appearing on a Fannie Mae “blacklist”—meaning buyers could no longer secure traditional mortgages to purchase units in these communities.

Why? Because in response to skyrocketing insurance premiums, many HOAs in Colorado opted for insurance deductibles higher than Fannie Mae’s 5% cap. This tactic helped keep monthly dues flat, but it quietly violated the lending criteria used by most banks.

The result?

• Thousands of homeowners are stuck in unsellable homes

• Property values are dropping

• Buyers must be cash-only or use expensive private loans

• Communities face reputational and financial damage

  
  

This isn’t theory—it’s real. It’s happening. And it can happen in Idaho, too.

II. Why Idaho Is Just as Vulnerable

In Idaho, HOAs and COAs are on the rise, especially in growing areas like Boise, Meridian, and Blaine County. But here’s the problem:

That means many associations are budgeting blind, with no plan for roof replacements, siding projects, asphalt repairs, or emergency mitigation.

Pair that with the national surge in insurance premiums and inflation in basic maintenance services—and suddenly, any Idaho HOA that chooses not to raise dues is playing financial roulette.

It may feel like you’re saving money, but in reality?

You're just kicking the can into a more expensive future.

III. The Illusion of Savings: Why Low Dues Can Be a Trap

Let’s use a relatable analogy:

HOAs are no different.

Flat dues mean:

• Roofs are patched, not replaced

• Siding issues go ignored

• Landscaping is done at minimum quality

• Emergency fund balances dwindle

• Special assessments loom like storm clouds

  
  

📉 What Looks Like Savings Today Is a Loss Tomorrow

Case in point:

One Idaho HOA held dues flat for 8 years. When their asphalt began failing and drainage issues worsened, they found themselves needing a $250,000 repair—with only $30,000 in reserves.

The board had no choice but to impose a $3,500 special assessment per unit. Several owners couldn’t afford it. One sold their home below market. The “savings” had vanished—and then some.

IV. Lending Doesn’t Lie: How Banks Judge Your HOA

Fannie Mae and Freddie Mac—who influence the majority of mortgage underwriting—care deeply about how HOAs manage their money.

Lenders are looking at:

• Reserve account balances

• Annual budgets

• Insurance deductibles

• Capital project backlogs

• Pending litigation

  
  

If your community appears underfunded, overexposed, or mismanaged, it can be blacklisted—meaning:

• Buyers can’t get conventional loans

• Refinancing is denied

• Appraisers lower valuations

• Home prices drop

  
  

This has already happened in Colorado. In Idaho, it’s not a matter of if, but when, unless boards start budgeting with discipline and foresight.

V. Real Idaho Examples: When It Goes Sideways

🔧 The Roof That Couldn’t Wait – Blaine County

A mid-sized HOA in the Wood River Valley delayed all major maintenance to keep dues flat. When the roof began leaking after a harsh winter, they discovered:

• Roof replacement cost: $540,000

• Reserve balance: $82,000

• Emergency special assessment: $4,300 per homeowner

  
  

🔒 The Lending Trap – Treasure Valley

A COA in the Boise area increased their master insurance deductible to 10% to save money. Shortly after, two unit sales fell through when buyers were denied Fannie-backed loans. Within six months, the complex gained a reputation among lenders as "unwarrantable," dropping home values 12%.

These aren’t stories from a decade ago. They’re happening now.

VI. What Smart HOA Planning Looks Like

There is a better path—and it doesn’t require punishing homeowners. It requires planning with courage and communicating with clarity.

✅ Best Practices for Idaho HOAs & COAs

VII. Let’s Change the Conversation Around Dues

Dues increases aren’t a failure of the board. They’re a sign of maturity. They mean you’re planning for tomorrow—not gambling with people’s investments.

That’s the real conversation.

Conclusion: Dues Are Not the Enemy—Apathy Is

If there’s one takeaway here, it’s this:

Proactive boards:

• Build trust

• Protect home values

• Ensure financial resilience

• And preserve community reputation

  
  

As Idaho continues to grow, our HOA landscape must mature alongside it. That means trading fear for foresight—and understanding that planning isn’t pessimism.

It’s protection.