When struggling with housing payments, is it more beneficial to pay the mortgage payment or the HOA fees?
When you have to choose, paying the HOA fees is always more beneficial than paying the mortgage!
Most folks are surprised to hear this, but yes you should always pay your HOA (or condo) fees, BEFORE the mortgage!
Why is it better to pay the HOA?
Florida is considered a "super lien" state for Homeowners Associations (HOAs) because its lien for unpaid assessments take priority over the mortgage lien. This means that your HOA can move to foreclose on your house, even with the mortgage in place. Furthermore, HOA's are generally much quicker to act on a default than a mortgage lender. Your mortgage lender has many available options to cure a default, including a forbearance, loan modification or short sale, while your HOA offers just one - immediate full repayment.
The Problem with unpaid HOA in a short sale:
In a short sale, a home is sold for less than the balance on the mortgage, a common solution for when loan modification efforts have been exhausted and the home must be liquidated. The lender will allow most costs of sale to be paid out of the proceeds of the sale with their approval. This will never include large past due HOA balances, and someone will still need to come up with the full amount of past due HOA payments in order for title to be cleared out to transfer to the new owner.
If sellers lack the funds, the fees may come from the buyer, but they cannot be included in the purchase price of the home, leaving the buyer to have to come up with a large cash sum out of pocket, in addition to all their costs of sale. This greatly reduces the buyer pool and makes the property much harder to sell .
HOA's also move much faster than mortgage lenders. While a Florida mortgage foreclosure can take years to complete, giving you plenty of time to work things out, HOA's move much quicker to foreclose on your property. This means you can be in the middle of doing a mortgage workout, and the HOA will foreclose and take ownership of your property, leaving you with no options to move forward.
What happens is the HOA forecloses? Does my mortgage go away?
NO! Most folks assume that their problems end at foreclosure, but that is simply not the case. If the HOA forecloses, title of the home will transfer to the HOA, but there will not be enough to satisfy the mortgage, and you will be responsible for the losses to the lender. However without being the titled owner, you lose all your rights to sell or dispose of the property, since it no longer belongs to you. HOA foreclosure is never the end. It is just the beginning of a new set of financial consequences.
Keeping the HOA current is the best way to have successful mortgage workout!
Whenever possible, PAY THE HOA! If you must neglect the mortgage, do so in favor of paying the HOA. This is your best bet to ensure a successful loan workout, especially in a short sale situation!
Facing foreclosure and need help liquidating your Florida home?
We can help and we offer free consultations!
I recently found myself in the unfortunate situation of being underwater on the mortgage of my condo and unable to continue to afford the mortgage payments. My real estate agent at the time suggested renting the unit to cover the cost each month until I was no longer underwater. I thought this was my only option at the time so I agreed and listed the condo for rent and quickly ended up reducing the listing price to the point where I’d be losing money each month if I was to secure a renter. To add to the loss, I’d also be responsible for maintaining the property and have heard numerous horror stories from other renters who had experienced tenants refusing to pay, drawn out evictions, and ongoing legal fees. As time went on it was clear that renting was no longer a viable option and I started seeking out alternatives. A friend had asked if I considered a short sale, to be honest it was a topic I had no actual knowledge on but a ton of misconceptions. After doing some research online I decided anything was worth a shot but honestly wasn’t too hopeful. I found Minna’s contact information while doing my research; her team is the best in the state when it comes to short sales. After my first phone call with Minna, there was no question in my mind that I was finally on the right track. She listened to my situation and clearly explained the short sale process, timeline and what to expect at every point in the process. Within a month of having the unit listed Minna and her team had received an offer and quickly helped me move forward through the short sale process until the unit was closed on last week. What a burden they have helped me with, I can’t recommend them enough. I only wish I’d found them sooner.
J.M.
Last Updated on August 22, 2025 by Minna Reid
