Texas HOA Foreclosure: What Homeowners in DFW Need to Know

Can a Texas HOA Foreclose on Your Home?

Yes. Under Chapter 209 of the Texas Property Code, a Texas residential HOA can place a lien on your home for unpaid assessments and foreclose on that lien, even if your mortgage is current and your property taxes are paid. For homestead properties, the law requires a $2,500 minimum delinquency in assessments before a lien can be filed, bars foreclosure for fines alone, and mandates a court order before any sale. A 180-day redemption period gives displaced owners a window to reclaim their property after a trustee sale.

By Paul Blair | October 26, 2026

A DFW homeowner returned from military deployment to find his home had been sold at a trustee sale. His HOA had filed a lien for unpaid dues that started at under $1,000. By the time of the sale, fees and attorneys' costs had driven the total balance much higher, but the original delinquency was only a few months of missed assessments. The home sold far below its market value.

That case and others like it pushed the Texas legislature to tighten the rules. The reforms added court oversight, a minimum delinquency threshold, and a right of redemption. But the power itself, the authority to foreclose, was never removed. Texas HOAs in Frisco, McKinney, Allen, Prosper, and across Collin County still hold it. If you live in one of these communities, or are buying into one, understanding how this process works is worth your time.

The Legal Framework: Chapter 209

The Texas Residential Property Owners Protection Act, codified as Chapter 209 of the Texas Property Code, is the primary law governing residential HOAs in Texas. It covers everything from meeting procedures to assessment rules to enforcement, including foreclosure.

The HOA's right to foreclose comes from the lien it holds on your property under the declaration of covenants, the CC&Rs you agreed to at closing. That lien is contractual, not statutory. Chapter 209 sets the rules for how that authority can be exercised.

Two foreclosure paths exist under Texas law:

Nonjudicial foreclosure. This is the faster route. The HOA must first obtain an expedited court order under Rule 736 of the Texas Rules of Civil Procedure before proceeding to a trustee sale. Despite the name "expedited," this still requires filing a petition, proper notice to the homeowner, and a court's review. It is not a foreclosure that happens without court involvement.

Judicial foreclosure. The HOA files a standard lawsuit. This is slower and more expensive for the HOA, so it is less common for routine assessment disputes.

Both paths end at a public trustee sale, where the property is sold to the highest bidder. That bidder is often the HOA itself, because the legal complexity and title clouds that follow HOA foreclosures discourage most outside buyers.

How Common Is This in DFW?

More than 70% of homes in the northern and eastern DFW suburbs are governed by HOAs. Frisco, McKinney, Allen, Prosper, Celina, and communities across Collin County have some of the highest HOA penetration in the country, driven by decades of master-planned community development. With that concentration, HOA lien filings in Texas number in the thousands per year.

HOA foreclosures represent a small fraction of those liens. Most disputes settle before a trustee sale. But the consequences when they do proceed are severe. A home with a $650,000 market value can sell at trustee sale for a fraction of that if competitive bidders stay away.

Here is how the process typically unfolds:

If you receive the 60-day pre-foreclosure notice, that clock is running. It is not a preliminary warning that more letters will follow. It is one of the last procedural steps before a court petition is filed.

What Protects You Under Current Texas Law

The legislative reforms that followed high-profile Texas cases added several meaningful protections. These apply to your homestead, your primary residence.

The $2,500 threshold. An HOA cannot file a foreclosure lien on a homestead unless the delinquent assessments total at least $2,500. Fees, interest, and attorneys' costs can be added on top of that floor, but the underlying assessment delinquency itself must reach $2,500. This threshold does not apply to non-homestead properties: investment homes, rental properties, and vacant lots can be liened at a lower balance.

No foreclosure for fines alone. Under section 209.009, an HOA cannot foreclose on your homestead to recover fines only. A fine for a fence violation, a parking infraction, or landscaping that did not meet guidelines cannot trigger a foreclosure by itself. If the delinquency is entirely fines, the HOA's remedy is a civil lawsuit for money, not a trustee sale.

Court oversight is required. Before proceeding to a nonjudicial trustee sale, the HOA must obtain a Rule 736 court order. This gives you an opportunity to respond to errors in the claimed balance, disputed charges, or procedural failures in how the HOA handled the delinquency. Homeowners who receive a Rule 736 petition notice and do not respond often default, giving up that opportunity. If you receive court paperwork related to your HOA, read it and consult an attorney before the response deadline.

180-day right of redemption. After a trustee sale, the former owner has 180 days to redeem the property by paying the foreclosure sale price plus any reasonable costs the purchaser incurred. This requires the full purchase amount in cash. Lender financing is rarely available under that timeline, but the redemption right is real and has been exercised successfully.

The 2023 Texas legislative session added procedural requirements and expanded notice obligations for HOAs pursuing foreclosure. If your HOA appears to have skipped required steps, a real estate attorney can often find a basis to challenge the process.

If you have received a pre-foreclosure notice or a Rule 736 petition in the mail, do not set it aside. The window to respond closes quickly, and each step you miss narrows your options. Reach out to the Grey Square team and we will connect you with a Texas real estate attorney and help you understand where you stand.

What This Means If You Are Buying in a DFW HOA Community

If you are buying in Frisco, McKinney, Prosper, or anywhere in Collin County, you are almost certainly buying into at least one HOA. A few things worth knowing before you close:

Under Chapter 207 of the Texas Property Code, the seller is required to provide a resale certificate. That document discloses the HOA's financial condition, any outstanding violations or delinquencies tied to the property, the current assessment schedule, and whether any pending special assessments exist. Buying into a Texas HOA without reading the resale certificate is one of the costliest shortcuts a buyer can take. The three-day right of termination tied to the resale certificate is one of the few leverage points buyers have in this process.

Effective July 1, 2026, TREC updated the HOA addendum (Form 36-11) used in all Texas residential contracts. The revised form clarifies buyer and seller responsibilities for obtaining the resale certificate and the timing of the buyer's termination right. If you are under contract right now, ask your agent to confirm your addendum reflects the updated language.

Watch for layered HOA structures. Many communities in Frisco, Allen, and Prosper have both a master HOA and a sub-HOA for individual sections. Each may assess separately and each may hold lien rights independently. Before closing, review both sets of governing documents and both assessment histories. Both can foreclose.

Also check whether the property has any outstanding HOA liens in the title commitment. Property liens in Texas, including HOA liens under section 209.0091, appear in Schedule B-2 of the title report. A buyer who closes without clearing an existing HOA lien inherits it.

Frequently Asked Questions

What is the minimum amount a Texas HOA can foreclose for?

For homestead properties, the delinquent assessments must total at least $2,500 before an HOA can file a foreclosure lien under Texas Property Code section 209.0091. This threshold applies only to assessments. The HOA cannot foreclose on homestead property to recover fines alone, regardless of the fine amount. This minimum does not apply to non-homestead properties such as investment homes, rental properties, or vacant lots.

Can a Texas HOA foreclose if I am current on my mortgage?

Yes. The HOA's lien authority is independent of your mortgage. If you are current on your lender payments but delinquent on HOA assessments, the HOA can still pursue foreclosure through its separate lien. Your mortgage lender has no legal obligation to cure your HOA delinquency to protect its collateral position, though in some cases lenders do intervene to protect their own security interest.

What happens to my home after a Texas HOA foreclosure sale?

Ownership transfers to the buyer at the trustee sale. If the HOA is the only bidder, it takes title to the property. The original mortgage is generally not extinguished by an HOA foreclosure sale, which means the new owner takes the property subject to the existing lender debt. That complication often discourages outside bidders, which is why HOAs frequently end up as the buyer at their own trustee sales. The former owner retains the 180-day right of redemption.

How long do I have to get my home back after HOA foreclosure in Texas?

Texas Property Code section 209.011 gives the former owner 180 days from the foreclosure sale date to redeem the property. To exercise that right, you must pay the full purchase price the buyer paid at the trustee sale plus any reasonable costs and attorneys' fees the buyer incurred. This is a cash transaction. Traditional mortgage financing is rarely available for foreclosure redemptions on that timeline, but private lenders and family loans have been used to redeem properties.

How do I find an agent in DFW who understands HOA issues when buying?

Look for an agent who regularly works in HOA-heavy markets like Frisco, McKinney, and Prosper and who makes resale certificate review a standard part of the option period, not an afterthought. At Grey Square, HOA due diligence is part of every buyer representation from the initial offer through closing. Connect with our team at greysq.com/contact and we are happy to answer questions before you are ever under contract.

If you own in a DFW HOA community and have outstanding assessments, engage before the certified mail arrives. Most HOA disputes resolve before they reach a trustee sale, but only when the homeowner responds early. If you have already received a Rule 736 petition or a pre-foreclosure notice, contact a Texas real estate attorney immediately. And if you are buying into an HOA community and want a thorough review of the governing documents and the resale certificate during your option period, reach out at greysq.com/contact.

Most of my buyers in Frisco, McKinney, Prosper, and Celina are surprised to learn just how much authority an HOA holds over the home they are buying. The lien right, the foreclosure power, the layered structure of master and sub-associations. None of it shows up on a listing page. It shows up in the title commitment and the resale certificate, once you know where to look. That is the work we do before you get to the closing table.

About Paul Blair

Paul Blair is the founder and broker of Grey Square, a virtual real estate brokerage representing buyers and sellers across Dallas, Los Angeles and Houston. With 22 years in the business, Paul works the full range of the market, from luxury homes in the Park Cities and Preston Hollow to estates in the Hollywood Hills and across the Westside. Connect with Paul and the Grey Square team at greysq.com. TX TREC #9011505 · CA DRE #01792671.