How Much Should a Condo Have in Reserves? | ReservesPro

How much a condo association should have in reserves comes down to one number in your reserve study, the fully funded balance, and the goal is to hold all of it. That answer can feel abstract the first time a board looks at the reserve line on a financial statement and wonders if it is enough, so this post shows where the number comes from, how to find yours, and how the legal and lender minimums fit underneath it.

A rule of thumb from the internet can tell you whether you are in the neighborhood. It cannot tell you whether your building is on track, because a 20-unit garden condo and a 200-unit tower with elevators and a garage wear out on very different schedules.

Your target is the fully funded balance

Reserve studies break a building into components. A component is one item that reserves pay to repair or replace, such as the roof, the elevators or the parking surface. Each one has a replacement cost and a useful life, and every year of use wears away part of that life.

The fully funded balance is the money that matches the wear the owners have already used. The Community Associations Institute's Reserve Study Standards give the formula for each component:

Fully funded balance = current replacement cost x (effective age ÷ useful life)

CAI's own example is a component with a $10,000 current replacement cost, a 10-year useful life and an effective age of 4 years, which has a fully funded balance of $4,000. Your study does this for every component and adds the results to get the association total.

Percent funded is your actual reserve balance divided by that total. A balance equal to the fully funded balance is 100% funded, which CAI calls "fully funded." For a deeper read on the ratio, see what percent funded means.

So the answer is 100% of your fully funded balance, and everything else here is either a floor under that number or a path to it.

The floors are not the target

Two sets of rules put a minimum under your reserves in Florida, the statute and the mortgage lenders. Both matter, and both are much lower than full funding.

What Florida law requires

Section 718.112(2)(f), Florida Statutes, requires every condo budget to include reserves for roof replacement, building painting and pavement resurfacing, plus any other item whose replacement cost or deferred maintenance exceeds $25,000 or the inflation-adjusted amount. The Division of Florida Condominiums posts that amount each year, and it is $25,675 for 2026. The amount reserved must be computed with a formula based on each item's remaining useful life and replacement cost.

For a building of three habitable stories or higher, the statute adds the structural integrity reserve study (SIRS). A SIRS is a reserve study of the items tied to the building's structure and safety, and it must be done at least every 10 years by a licensed engineer or architect, or by a reserve specialist or professional reserve analyst with the credentials the statute names. Under 718.112(2)(g) it covers at least:

The roof
The structure, including load-bearing walls and primary structural members
Fireproofing and fire protection systems
Plumbing
Electrical systems
Waterproofing and exterior painting
Windows and exterior doors
Any other item over the threshold whose failure would harm the items above

The reserve amount for those items must be based on the most recent SIRS. For budgets adopted on or after December 31, 2024, owners in an association that must have a SIRS cannot vote to waive or reduce reserves for the SIRS items, except for a multicondominium with an alternative funding method that the Division approved. Owners can still vote to waive reserves for other items, and the statute requires a proxy warning that waiving reserves "MAY RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED SPECIAL ASSESSMENTS."

At a minimum, the statute only requires a SIRS to recommend a baseline funding plan, which keeps the reserve cash balance above zero, and it allows the study to recommend other schedules too. If your budget does not align with the funding plan in your most recent SIRS, you must get an updated SIRS before you adopt it. For the full Florida picture, see our guide to Florida condo reserve funding requirements.

What lenders check

When a buyer in your building applies for a conventional mortgage, the lender reviews the association's budget. The Fannie Mae Selling Guide tells the lender to confirm that budgeted reserves are at least 10% of the association's annual budgeted assessment income. A lender can use a reserve study instead, but the budget must then include the study's highest recommended reserve amount, and a baseline plan cannot be used to waive the 10% test.

Freddie Mac's Bulletin 2026-C raises its minimum from 10% to 15% of annual budgeted assessment income for loan applications received on or after January 4, 2027. If your budget sits near 10% today, it is worth planning the step up in the next budget.

Why the floors fall short

The minimum plan a SIRS must recommend is a baseline plan, and CAI's standards describe baseline funding as "the funding goal with the greatest risk" and say it "is not recommended as a long-term solution/plan." The lender tests are a percent of the budget, which says nothing about the age of your roof. A building can pass every floor and still be far from the money its components have already used.

Three funding goals, and why full funding is the one to aim for

Every reserve study is built on a funding goal, and CAI names three of them.

Baseline funding keeps the reserve cash balance just above zero. It is the riskiest goal, and CAI says it may lead to project delays, special assessments or a line of credit.
Threshold funding keeps the balance above a dollar amount or percent funded that the board picks. It is only as strong as that number, and any floor below 100% still leaves part of today's wear for later owners to pay.
Full funding keeps reserves "at or near 100 percent funded."

Full funding is the goal, and the only choice a board has to make is how fast it gets there. A board may hear 70% funded described as a comfortable place to stop, but at 70% part of the wear the owners have already used still has no money behind it. CAI's own standards say percent funded "is not by itself a measure of 'adequacy,'" which is a reason to watch the trend toward 100% rather than settle on a midpoint.

Full funding is also the fairer goal. Owners who live in the building while the roof ages pay for the share of the roof they used, instead of passing that cost to whoever owns the unit in the year the roof is replaced.

And it is usually the cheaper path over time. Saved dollars compound, because money set aside early can earn interest while it waits. Deferred dollars inflate, because the replacement cost keeps rising while the board waits, and the statute lets associations adjust reserve assessments for inflation each year for that reason. Even the state's own threshold moved from $25,000 in 2025 to $25,675 in 2026. In other words, the market does the work, or the owners write the check.

For the side-by-side comparison, see baseline vs. threshold vs. full funding.

Why rules of thumb miss your building

Generic percentages point in a direction, but the right reserve balance depends on your building's age and what it is made of.

Building age. An older building has more components close to the end of their lives, so more of its replacement cost is already used up.
Component mix. Elevators, a pool, a parking garage and a long list of mechanical systems all add to the fully funded balance. A small building with a shared driveway has far less to carry.
Florida conditions. Salt air, sun, heat and storms are hard on roofs, waterproofing, paint and metal, so useful lives on the coast can run shorter than a national rule of thumb assumes.
Number of units. The same roof bill split across 200 units and across 20 units leads to a very different conversation about each owner's share.
Deferred maintenance. Work that an earlier board postponed does not go away. It still needs money, and it often costs more when it finally gets done.

Two buildings with the same reserve balance can be in very different shape, which is why the answer has to come from your own study.

How to find your number

You can work through this with the reserve study you already have and the latest financial report.

Pull your most recent reserve study. If your building needs a SIRS, use the SIRS for the structural items and the full reserve study for everything else. If a study is out of date, ask your reserve professional to update it on the schedule they recommend, and keep the SIRS inside its 10-year window. Our guide on how to read a reserve study walks through the pages that matter.
Find the fully funded balance. CAI's standards calculate it for each component and then add the results into an association total. That total is your target.
Check your percent funded. Divide your current reserve balance by the fully funded balance. Then look at the direction over the last few years, not only this year's figure.
Compare this year's contribution with the full-funding contribution. Section 718.111(13), Florida Statutes, directs the Division's financial reporting rules to include a good faith estimate of the annual amount needed to fully fund each reserve item, using the straight-line method (it does not apply to pooled reserves). Your study's funding plan gives the same comparison.
Set a date for 100%. Pick the year your board will reach full funding and the contribution schedule that gets you there, then put it in the budget so the next board inherits a plan.
Check the floors. Make sure the budget meets your SIRS funding plan and the lender test for the year ahead.

To see the contribution that one component needs, try our asset reserve calculator. To see what a delay costs, try the cost of waiting calculator.

When your number is far from the target

Finding a large gap is not a sign that the board failed. Many boards inherit a fund that earlier boards kept low, and the first job is to see the gap clearly and start closing it.

Underfunding is the cause of most special assessments that a board could have avoided. Some assessments come no matter how well a fund is run, because a hurricane, a code change or a lawsuit can bring a cost that no reserve plan predicted. A board that is moving toward full funding meets those moments from a stronger position, with less to borrow and a smaller assessment to ask for.

Under 718.112(2)(f)2.c, SIRS reserves can be funded by regular assessments, special assessments, lines of credit or loans, and a special assessment, line of credit or loan for that purpose needs a majority vote of the total voting interests. For a step-by-step catch-up plan, see how to catch up on underfunded condo reserves, and for the funding strategy itself, see how to fund condo reserves.

Putting your number into a plan

Your fully funded balance tells you where reserves should be. The harder part is deciding how to get there alongside insurance costs, any loans and the special assessments the board may have to ask for. A Capital Plan puts reserves, insurance, debt and special assessments into one board-facing plan, so the board can compare the real choices (finance it, assess for it, or draw from reserves) before it votes. Reserves Pro builds the plan with your board, working from the reserve study your licensed professional prepared, and refreshes it every quarter.

See how a Capital Plan works for your board

Frequently asked questions

How much should a condo association have in reserves?

A condo association should aim to hold its fully funded balance, which is 100% funded. The fully funded balance is the share of each component's replacement cost that the building has already used up, added together for every component. Your reserve study gives the inputs. Florida law and lenders set floors below that number, but the floors are minimums, not the target.

Is there a minimum reserve amount in Florida law?

Florida law does not set one dollar figure. It requires reserves for the roof, painting, paving and any other item over $25,000, adjusted for inflation ($25,675 for 2026), computed with a formula based on remaining useful life and replacement cost. For a building that needs a structural integrity reserve study, the reserve amount for the study items must be based on the most recent study, and owners cannot vote to waive those reserves, except for a multicondominium with a funding method that the Division approved.

What percent of the budget should go to reserves?

The percent of the budget is a lender test, not a target. Fannie Mae's guide has lenders check that budgeted reserves are at least 10% of assessment income, and Freddie Mac raises its minimum to 15% for loan applications received on or after January 4, 2027. The amount your building needs comes from its reserve study, and it is often more than either figure.

What if our association cannot reach 100% funded right away?

Most underfunded boards cannot close the gap in one budget, and that is a normal place to start. Set full funding as the goal, pick a date to reach it, and raise contributions on a schedule that owners can see. The question is how fast the board gets to 100%, not if.

This article is general information about reserve planning, Florida condominium law and lender requirements. It is not legal advice, so consult your association attorney about the statute and your governing documents. It is not financial or investment advice, so consult your CPA, your treasurer or a registered investment advisor before you change how reserves are funded or invested.