For mortgage lenders, properties in these organizations, which can include homeowners associations for single-family homes as well as condos, come with their own issues.

Delinquent HOA dues in a number of states are considered a superior lien to a mortgage when it comes to a foreclosure. At the same time, when it comes to condos, secondary market rules on lending on those properties have tightened since the Surfside disaster.

Research from the National Association of Home Builders found 64.8% of all single family properties constructed last year were in a community or homeowners association, up from 62.6% in 2022.

This is the third highest level ever; the record level of 67.1% was set in 2020, while No. 2 was the following year at 65.5%.

As measured in units, 601,558 homes were started in community associations during 2023.

This data is similar to information from the Foundation for Community Association Research disclosed to National Mortgage News earlier this year. 

The demand for living in a community association exists among a percentage of consumers.

Just over one-third of the respondents, 35%, to a February 2023 LendingTree study said they live in an HOA.

At the time they purchased that property, 53% of that group said they sought out living in an HOA, 31% didn't think about that factor and 16% did not want to be a part of one, but bought a home in one anyhow.

But HOA fees can be considered one of the hidden costs of homeownership, which can be worrisome for servicers because of the super lien.

Yet, a majority of these property owners, 63%, consider HOAs priced fairly for the benefits received.

"HOAs can provide you with the peace of mind that comes with knowing that your neighbors probably aren't going to do anything crazy, like regularly throwing all-night parties or painting their home bright pink," Jacob Channel, LendingTree senior economist, said at that time. "But HOAs aren't for everyone, and people who aren't particularly concerned with regularly mowing their lawn or who want to maximize their freedom to do with their home what they please should probably avoid them."

Last year, the NAHB analysis found the Mountain region had the highest percentage of homes built in community associations at 81.9%, followed by the South Atlantic states at 70.5%. But the Middle Atlantic states had the lowest share at 28.6%.