SMA Reserves Expertly Prepared · Simply Presented

The 15% Checker

Is Your HOA Saving Enough?

California and condo lenders now use 15% numbers to judge HOA reserves. In about 90 seconds, see what those numbers mean, and why meeting a minimum isn't the same as being prepared.

Show Me How It Works Check My HOA

Uses a made up sample HOA. No sign up. Anything you type stays on this page.

Chapter 1

Your HOA has a savings jar.

Your HOA saves money each year so it can pay for major repairs when the time comes.

The reserve savings jar Each year a contribution flows into the jar. The money already in the jar is the reserve balance. Major repairs are paid out of the jar. EACH YEAR $130,000 yearly contribution flows in RESERVE BALANCE WHEN THEY COME DUE Major repairs roofs · paving elevators · plumbing
Yearly contributionWhat goes in each year

Part of every owner's dues, set in the budget. Both 15% rules look at this number.

Reserve balanceWhat's already in the jar

The money saved so far. It's what you have on hand when something breaks.

Chapter 2

Two sets of rules. Two different tests.

Both use the number 15%. They measure it against different amounts, and not every HOA is subject to both.

California law · starts January 1, 2032

AB 2050

California looks at what your reserve study says your HOA needs to save.

  1. Every year: put in at least the study's minimum, the least that keeps the 30 year projection from dropping below $0.
  2. Only if the study shows reserves dropping below $0 within 30 years: also put in at least 15% of the whole yearly budget.
Learn more

The "whole yearly budget" is the gross budget: assessments plus other income such as interest or laundry.

The 15% part is conditional. Many HOAs will only need to meet the study minimum. If the budget can't cover what's required, the law points to a reserve funding special assessment.

California does not offer the lender's "reserve study option." The two rules are separate.

Condo lending · loan applications from January 4, 2027

Fannie Mae and Freddie Mac

Condo lenders have their own rules for reserve funding.

  1. The benchmark: at least 15% of yearly assessment income goes into reserves.
  2. Or a lender may accept a current reserve study when the budget funds its recommendation, as long as that recommendation isn't a baseline plan.
Learn more

Assessment income is the regular dues in the budget. It leaves out special assessments and other income.

This mainly matters for condominium projects that get a full lender review. The lender makes the final decision.

Meeting 15% does not make a project or a loan eligible by itself. Lenders also look at insurance, repairs and other risks.

Same 15%. Different starting numbers. Sample HOA

California15% × whole budget $1,040,000$156,000
Lenders15% × assessment income $1,000,000$150,000

Chapter 3

Move the slider. Then try your own HOA.

See how one yearly number compares with each target, in dollars and per home.

Your turn

How does your HOA measure up?

This is the place to put in your own HOA's numbers. Everything below, the slider, the targets and the three findings, will show your association instead of the sample. It takes about two minutes, and nothing you type leaves this page.

or keep exploring with the sample HOA below

Have these handy

From this year's budget

  • Assessment income
  • Whole budget
  • Reserve contribution

From your reserve study

  • Minimum contribution
  • Highest recommendation
  • The 30 year projection

Don't have them all? Enter what you know. Missing numbers are never treated as $0.

See the sample HOA's numbers

Every unit that pays assessments.

Regular dues in this year's budget. Leave out special assessments.

$

All budgeted income, including interest and other income.

$

What this year's budget puts into reserves. Not the balance in the bank.

$

From your reserve study

The least the study says you can put in so reserves never drop below $0.

$

If the study shows more than one recommended plan, use the largest.

$
Does the study show reserves dropping below $0 within 30 years?

This decides whether California's extra 15% applies.

Is the study's highest recommendation a baseline plan?

Only matters for the lender's reserve study option.

Is the HOA a condominium?

The lender benchmark is mainly for condo projects.

Yearly reserve contribution
$0

Per home amounts are simple division. Real dues are set by your governing documents and aren't always split equally.

Show the math

Three separate findings

Each answers a different question. A check means only that the contribution meets the target entered.

California · AB 2050

Does it meet California's funding test?

What this means
Fannie Mae and Freddie Mac

Does it meet the 15% lender benchmark?

What this means
Resilience perspective

How does it compare with the study's highest recommendation?

What this means

Chapter 4

But what happens when something goes wrong?

Even a well maintained community can face an expensive surprise.

A main underground water line breaks. The repair can't wait, and the study didn't expect it for years.

HOA A Smaller cushion

Reserve balance $100,000

HOA B Larger cushion

Reserve balance $300,000

These are made up reserve balances, the money already in the jar. They are not the yearly contributions from Chapter 3.

The difference isn't just how much you save. It's how prepared you are when the unexpected happens.

Meeting a minimum isn't the same as being prepared.

HOA A could be meeting every minimum and still come up $100,000 short. When reserves come up short, the usual answers are a special assessment, a loan, or putting off other repairs.

One caution: a larger cushion today doesn't prove HOA B has a resilient plan. Both may have large projects ahead. Real resilience means looking at future repairs, their timing, their likely cost, the funding plan, and room for surprises, all together.

Chapter 5

Three ideas worth remembering.

1

The Rules

Tell you the funding standards that may apply to your HOA.

2

The Reserve Study

Estimates what your property will need over time.

3

Reserve Plan Resilience

Is about how well the plan prepares your association for those needs, and for the unexpected.

They're related, but different. A good study doesn't guarantee resilience, and meeting 15% doesn't either.

The minimum tells you where the floor is. A resilient reserve plan helps you prepare for what lies ahead.

Questions to ask at your next board meeting

  1. What is our yearly reserve contribution, and how does it compare with our study's minimum and its highest recommendation?
  2. Does our study show reserves dropping below $0 at any point in the next 30 years?
  3. What percent of our assessment income goes to reserves? Does the 15% lender benchmark matter for our owners?
  4. Which large projects are coming in the next 5 to 10 years, and are any bunched together?
  5. If a $200,000 surprise came tomorrow, how would we pay for it?
OptionalWhat happens if we wait to increase funding?

Say your HOA decides it should put more into reserves each year. You can raise it all at once, or step it up over 5 years. The final yearly amount is the same. The money saved along the way is not.

Start now

Phase in over 5 years

Extra money put into reserves, added up year by year

Monthly cost per home, year by year
YearStart nowPhase in

This picture leaves out investment income, inflation, reserve spending, the timing of major projects, and existing reserve balances. It shows a tradeoff. It isn't a recommendation. Your study's 30 year cash flow is the place to test a real plan.

Take this to your board

Your HOA's funding picture

    The minimum tells you where the floor is. A resilient reserve plan helps you prepare for what lies ahead.

    The PDF is made right here in your browser from the numbers on this page. Nothing is uploaded.

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    Managing several associations? Copy the ready to send email and send it to each board before budget season. The sample HOA tells the whole story, so no one has to share their numbers.
    
    
    
  
    

    



    
  
    
    
    Know where your reserve plan stands.
    
    
    Your funding percentage is only one part of the picture. SMA Reserves helps associations understand the condition of their property, upcoming capital needs, and the strength of their reserve funding plan.
    
    
    
      Learn About Reserve Plan Resilience
      Request a Reserve Study Proposal
    
    
    
    The first opens The SMA Approach, our guide to reserve plan resilience: what it means, how to test whether a plan can absorb surprises, and seven questions any homeowner can ask. The second opens our proposal request page. Both open in a new tab.
    
  
    

    



    
  
    
    
    Where these rules come from
    
    
    
    This tool is for education and early funding comparisons. It is not a reserve study, a legal opinion, a lender certification, or a promise of mortgage eligibility. What applies depends on the association, the project, the review process and the rules in effect.
    
    
    
    
    SMA Reserves · Expertly Prepared · Simply Presented · (408) 306-0145 · contact@smareserves.com · www.smareserves.com