The HOA and Condo-Living Guide

When you buy a condo or a loft condo, you're buying two things: your unit, and a membership in the association that runs everything else. Many first-time buyers study the unit closely and barely glance at the association, which is backwards. The association's health shapes your monthly costs, your mortgage, your resale, and your day-to-day life in the building.

This guide is general information, not legal or financial advice. Each association's documents control, so read them and ask your agent, lender, or attorney about anything unclear.

What a condo association actually is

A condo association (often called the HOA or unit owners' association) is the legal entity that manages and maintains the common elements, such as the lobby, hallways, roof, elevators, grounds, and amenities. In a condo, the owners own those common elements together; the association runs them. Every owner is automatically a member, pays dues, and votes.

A board (usually elected owners) governs. While a developer still controls a new building, the developer typically appoints the board. Many associations hire a professional management company for day-to-day operations.

Some buildings have more than one association. At the 710, 720 & 730 Lofts, three buildings share one master condominium, so its budget and reserves cover all of them. At Itasca Lofts, parking is its own separate garage condominium with its own association. Ask how many associations you'd belong to and what each one charges.

Monthly dues: what they cover (and don't)

Dues vary widely from building to building. Ask exactly what's included:

• Common-area maintenance and utilities, trash, landscaping, and snow removal.
• The master insurance policy (the building and common areas; how much of your unit's interior it covers varies, so check).
• Amenities such as a gym, pool, or front desk, which raise costs.
• Sometimes heat, water, or gas (more likely in older buildings with shared systems).
• A contribution to reserves, the savings for big future repairs.

Low dues aren't automatically good news. They can mean the building is underfunding its reserves, which sets up the thing nobody wants: a special assessment.

Reserves and the reserve study

Reserves are the association's savings for major repairs and replacements: roof, elevators, façade, mechanical systems. A reserve study estimates what those will cost and when, and whether the building is saving enough. Before you buy, ask:

• Is there a recent reserve study, and how well funded are the reserves compared with what it recommends?
• Is the budget actually putting money into reserves each year?

Lenders care about this too. Fannie Mae and Freddie Mac look for at least 10% of the budget going to reserves (15% for loan applications on or after January 4, 2027), or a reserve study from the last 3 years that the budget fully funds. See Buying & Financing for how that plays into your loan.

Special assessments: the surprise bill

When reserves fall short of a big repair, the board can levy a special assessment, a one-time charge split among owners. These can be large. Ask for the history of past assessments and any pending or anticipated ones. Older conversions (original windows, masonry, freight elevators) have big-ticket components to plan for.

The governing documents: read them before you buy

You'll receive a packet of association documents (in Minnesota, a resale disclosure certificate plus the governing documents). Don't skim it. The key pieces:

• Declaration (sometimes called CC&Rs): what you own, where your unit's boundaries are, common vs. limited common elements, and owner obligations.
• Bylaws: how the association is governed, including the board, voting, and meetings.
• Rules and regulations: pets, noise, renovations, move-ins, and short-term-rental bans.
• Budget and recent financials: dues, reserves, and any deficits.
• Recent meeting minutes: often the most revealing document. Minutes show looming repairs, disputes, and assessment discussions that a listing won't mention.
• Leasing and rental rules: many associations limit how many units can be rented. That's critical if you ever want to rent yours out. A building's rental mix can also matter for FHA loans, and hotel-style short-term rental operations can make a building ineligible for conventional loans.
• Shared-cost agreements: buildings that share space with a hotel or commercial owner, such as IVY Residences, usually have agreements that divide costs between them. Read those too.

Why the association affects your mortgage

Condo lending looks at the project, not just you. Whether a building is warrantable (eligible for loans sold to Fannie Mae or Freddie Mac) depends on its budget and reserves, delinquent dues, single-owner concentration, commercial space, litigation, and any critical repairs. Owner-occupancy still counts for FHA loans. A weak association can make an otherwise good unit hard to finance, and harder to resell later. The details are in Buying & Financing.

Insurance: two policies, not one

• The association's master policy covers the building and common areas. How much of each unit it covers depends on the policy and the declaration.
• You still need an individual HO-6 policy for whatever the master policy leaves out, plus your belongings and liability. Since July 1, 2026, Fannie Mae and Freddie Mac require an HO-6 when the master policy doesn't cover the unit interior or has a per-unit deductible, and they cap that per-unit deductible at $50,000.
• Check the master policy's deductible. Associations can often pass a deductible on to the owners of the affected units. Look for loss-assessment coverage on your HO-6.

Minnesota specifics

• Reserves are required, but there's no set percentage. Minnesota associations must budget replacement reserves adequate for the components they're responsible for replacing (components with more than 30 years of remaining life can be left out), keep reserves separate from operating money, and reevaluate their adequacy at least every third year. The 10% figure you'll hear is a lender rule, not a state one.
• Owners can choose assessments over reserves, with a vote. A majority vote of owners can approve funding some replacements by special assessment instead, for up to four fiscal years.
• Insurance covers more than the common areas. In buildings with shared walls or roofs, the association's property policy must cover the units as well as the common elements, but it may exclude interior finishes, flooring, cabinets, fixtures, single-unit heating and plumbing, built-in appliances, and owner improvements. The association may assess a claim's deductible to the affected owners.
• The resale certificate tells you a lot. It lists dues, special assessments, reserves, lawsuits, insurance (including which interior items the association insures), and known violations.

Living with the association after you buy

• Get involved. Boards run on a handful of volunteers, and an engaged owner has a real voice.
• Read the minutes, attend the annual meeting, and know your reserve balance.
• Know the rules. They exist because you share walls, floors, and a roof.

Red flags when buying

• No recent reserve study, or reserves far below what the study recommends.
• Recent or pending special assessments.
• A high rental ratio (can limit FHA financing and some lenders' options).
• Pending litigation involving the association, especially over the building's structure.
• Deferred maintenance discussed in the minutes.
• Dues that seem too low for the building's age and amenities.

For a Minneapolis example, browse the verified buildings in our Minneapolis guide, or start with Loft vs. Condo if you're new to the terms.

Frequently asked questions

What is the difference between an HOA and a condo association?

In everyday use, people say HOA for both. A condo association specifically manages a condominium's common elements, which the owners own together. Homeowners associations in other kinds of communities may own common property directly. Either way, you become a member automatically when you buy.

What does a reserve study tell me?

It estimates when the building's major components (roof, elevators, façade, mechanicals) will need repair or replacement, what that will cost, and how much the association should save each year. Comparing the reserve balance and budget with the study's recommendations shows whether the building is on track or likely to need special assessments.

What is a special assessment?

A one-time charge the association levies on owners, usually when reserves can't cover a major repair. It's in addition to regular dues. Ask for the history of past assessments and whether any are pending or being discussed in recent board minutes.

Do I need an HO-6 policy if the association has master insurance?

Usually. The master policy covers the building, but it may exclude interior finishes, fixtures, and improvements, and a deductible can be passed on to owners. An HO-6 covers those gaps plus your belongings and liability. Since July 2026, Fannie Mae and Freddie Mac require one in many cases.

How much does Minnesota require a condo association to keep in reserves?

Minnesota doesn't set a percentage. The law requires reserves adequate for the components the association must replace, kept separate from operating funds, with adequacy reevaluated at least every third year. Lenders apply their own minimums, such as the 10% budget test for Fannie Mae and Freddie Mac loans.

Sources: Minn. Stat. 515B.1-103, 515B.3-113, 515B.3-1141, 515B.4-107, Fannie Mae Selling Guide B4-2.1-03, B4-2.2-02, Freddie Mac Bulletin 2026-C.