Definition
HOA lien priority varies by state. Some states give HOA liens high priority equal to property tax liens, while others subordinate them to mortgages. This priority affects foreclosure outcomes.
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HOA lien priority varies significantly by state. Some states give HOA liens priority equal to property tax liens (very high), while others subordinate them to mortgages. This priority affects foreclosure outcomes and lender willingness to finance properties with large HOA arrears. High-priority HOA liens incentivize quick payment but also create risk for lenders. Buyers and lenders should understand their state's HOA lien priority rules.
Pro Tip
Understand your state's HOA lien priority. It affects whether HOA liens must be paid before mortgages.
Example
In a state with strong HOA lien priority, unpaid HOA assessments take priority over a first mortgage in foreclosure.