Homeowners associations face cash crunch, driving a near-40% rise in foreclosures

Rising costs and dwindling reserves are pushing U.S. homeowners associations to foreclose on delinquent owners, with filings up almost 40% in two years.

U.S. homeowners associations are running out of money as insurance costs, reserve shortfalls and stricter safety rules—spurred by the 2021 Surfside condo collapse—mount. To stave off financial collapse, HOAs are eliminating grace periods, employing attorneys and outsourcing debts to collection agencies that tack on substantial fees, often linked to the same law firms advising the associations. This aggressive approach has driven HOA foreclosures up nearly 40% over two years, reaching 6,376 cases in the first quarter, according to real-estate analytics firm Attom, surpassing the national mortgage-foreclosure rate.

Auctions typically allow a 90-day redemption window, but many owners cannot meet the combined delinquent dues, collection costs and legal fees, resulting in loss of the home. The surge is reflected in rising lien filings—285,000 in 2025, an 8.8% increase—and soaring expenses such as a Long Island HOA’s insurance premium jumping from $60,000 to $360,000. Experts warn that these trends depress property values and can destabilize entire neighborhoods, especially in states where “super priority” laws let HOAs foreclose before banks.