Reserve funding for associations varies widely based on the size of the association, number of reserve components, and cost of the reserve components. So comparing the annual funding amount of one association to another is an apples-to-oranges comparison. The best comparison, however, would be to compare the percent funded of associations. Percent funded essentially measures […]
Funding Reserves
Understanding Percent Funded of Reserves
One key feature that a reserve study should indicate is how well funded an association is. The way that is measured is by a term called percent funded. In Layman’s terms, percent funded means how much money you have in reserves versus how much money you should have in reserves. The Community Associations Institute defines […]
FHA Reserve Funding Requirements
FHA financing is a popular choice to finance single family homes or condominium units. FHA loans require only a 3.5% down payment minimum on purchases by the buyer, making it the most affordable option for many families. FHA Condominium Project Guidelines Due to the small down payment amount, many condominium projects are interested in obtaining […]
How a Reserve Study Can Save Your Association Money
Reserve studies are beneficial to associations for several reasons. Proactively Get Organized A reserve study helps an association get organized with its capital assets. A reserve study will have an itemized section for that shows projected asset repair and/or replacement year by year. This serves a meaningful purpose. If an association is not well organized, […]
Reserves for New Community Associations
There is a lot of organization involved when setting up a new community. Budgeting for reserves is not necessarily the first thing that new boards may be concerned with. However, the opposite effect of not setting up reserves properly can have lingering effects. Money that is not set aside is an opportunity lost to fund […]
What Your Reserves Do
Reserve funds are the backbone of community associations. It is how they are able to pay for big ticket repairs and replacements. Funding reserves is advantageous to your association for several reasons: Keep Property Values Up The biggest reason why you fund reserves is they help maintain and increase property values. It is very difficult […]
Identifying Reserve Items
Identifying all of the reserve items in an association can be difficult. One of the most common budgeting mistakes that associations make is not getting all of the proper items on the reserve schedule. Condominiums For condominiums in Florida, Florida Statutes 718.112(2)(f)2, says that reserves must be established for capital expenditures and deferred maintenance of: […]
Why You Should Fund Reserves
In Florida, it is not required for associations to fully fund reserves or fund reserves at all for that matter. Many older associations never set up reserves and would just issue a special assessment to their members when it came time to repair a capital item or asset. Most Equitable Way to Do Things This […]
Why Percent Funded of Reserves is so Important
When reviewing a reserve study, there is a lot of information to comprehend. Important measures to note are the yearly funding totals and the fee per unit per month. Maybe the most noteworthy number to look at, however, is percent funded. Percent funded is a percentage that measures the overall health of an association. Percent […]