ArthurS7 (Pennsylvania)
Posts: 34
Posts: 34
Posted:
Our property management company's regional manager is warning us that the new Fannie Mae/Freddie Mac 15% reserve contribution requirement, effective January 2027, could make our community ineligible for conventional mortgage financing unless we increase our annual reserve contributions.
From what I understand, the existing reserve contribution requirement for certain mortgage lending reviews is 10%, increasing to 15% in January. However, I'm unclear whether these requirements apply to all HOAs or primarily to condominium associations.
Our HOA consists of 96 townhomes in a planned community, where homeowners own their individual lots. We collect approximately $207,000 annually in assessments and have about $285,000 in reserves, primarily invested in CDs. Our last reserve study was conducted four years ago.
Historically, we've contributed approximately 6% of annual assessments to reserves, with additional growth from CD interest, and we're not aware of any mortgage financing problems in our community's 10-year history. Our proposed budget actually calls for $0 in additional reserve contributions.
Does this requirement actually apply to planned communities like ours, or is it specific to condominium associations?
Has anyone with a townhouse HOA or planned community received similar warnings or experienced actual mortgage financing problems because of reserve contribution percentages? Our property manager also indicated that enforcement has become stricter. Has anyone seen evidence of that?