How Much Should an HOA Have in Reserves?

Two communities with the same budget can need very different reserves. One may have new roofs and no pool. The other may have a 20-year-old roof on every building and a repaving job in three years. That’s why a percentage can only be a starting point.

What the numbers say

• About 25% nationally. The Foundation for Community Association Research estimates that associations collected $124.2 billion in assessments in 2025 and put $31.1 billion into reserves. That works out to about a quarter. It’s an average, and it says nothing about any one community.
• 15% to 45% in one firm’s data. One large study firm says its recommendations cluster in that range. It’s based on the firm’s own clients, not a national sample.
• 15% as a lender minimum. For condo loan applications from January 4, 2027, Fannie Mae and Freddie Mac are scheduled to raise their minimum from 10% to 15% for projects that go through review. Check for any delay. That’s a floor for loan eligibility, not a measure of what your community needs.

These numbers describe yearly contributions, not the balance. A percentage says nothing about whether your roofs are due next year or in 20 years. The explanation of the national reserve study standards makes the same point about budget-based lender minimums: “it does not relate at all to the physical assets within a community.”

A better way to find your number

Ask three questions:

1. What are our big projects, and when are they due? List roofs, paving, paint, pools, fences and anything else the association has to replace.
2. What will each cost by then? Today’s price grows with inflation. A $500,000 job in 10 years costs about $672,000 at 3% a year.
3. Does our balance stay above $0 through all of it? Add your balance, contributions and interest, subtract each project in its year, and look for the lowest point.

The lowest point is the number that matters. A balance that looks large today may be fine, or it may be a few years away from one big bill.

How much cushion is enough?

Staying barely above $0 leaves no room for a high bid or an early failure. The explanation of the standards says it’s “increasingly rare” for providers to recommend a plan that only stays above $0. A higher funding goal adds room. More cushion means higher dues now, so it’s a judgment call for the board.

The same firm’s report also argues that associations “do not need to be 100% funded to be insulated from Special Assessment risk.” That’s one firm’s conclusion from its own data.

One useful check: raise your largest project’s cost by 20% and see whether the balance still stays above $0.

Signs your reserves may be short

• You have no reserve study, or the last one is many years old.
• A major project is due within a few years, and the balance wouldn’t cover it.
• Contributions haven’t changed in years, while repair costs have.
• The board has already delayed a project because of cost.
• A special assessment is under discussion.

None of these proves a shortfall. They’re reasons to run the numbers.

Work out your own number

Our runway calculator gives a rough answer in a few minutes. For a plan the board can adopt, a reserve study lists every component and builds the 30-year schedule.