One of the major challenges in fracturing low permeability gas formations is the loss of well productivity due to fluid entrapment in the matrix or fracture. Field results have indicated that only 15-30% of the frac fluid is recovered at the surface after flow back. Past studies have suggested that this water is trapped in the rock matrix near the fracture face and remains trapped due to the high capillary pressure in the matrix. Significant efforts have been made in the past to understand the impact of liquid blocking in hydraulically fractured conventional gas wells. This study shows that when considering hydraulic fractures in horizontal wells, the fluid may also be trapped within the fracture itself and may impact the cleanup as well as productivity. Under typical gas flow rates in tight / shale gas formations, liquid loading of both the fractures and the matrix is very likely to occur. This paper presents the results of 3D simulations of liquid loading in hydraulic fractures in horizontal wells, including gravity and capillary pressure effects. The impact of drawdown, fracture and reservoir properties on liquid loading and well productivity is presented. Results show that low drawdown, low matrix permeability or low initial gas rates aggravate the liquid loading problem inside the fracture and thereby impact the gas productivity during initial production.