Only a minority of states legally require a reserve study at all
As of 2026, roughly 12 states legally require some form of reserve study for condominium or HOA associations — meaning most of the country still leaves reserve funding levels to the association's own governing documents and board judgment, with no statutory floor at all. A board in a non-mandate state is not exempt from the underlying financial risk of underfunded reserves; it simply has no legal minimum forcing the conversation, which makes voluntary, proactive reserve planning more consequential precisely because nothing outside the board is going to require it.
Florida: the state that changed the most
Florida's Structural Integrity Reserve Study (SIRS) deadline has passed, and as of the 2026 budget cycle, full funding of the structural components identified in a SIRS is mandatory for condo buildings three stories or taller. Owners can no longer vote to waive or underfund those specific structural reserves the way associations previously could waive reserve funding more broadly — this is a hard, non-negotiable funding floor for the structural line items a SIRS covers, layered on top of whatever the association's regular reserve practices were before.
Michigan's explicit percentage floor
Michigan requires every condominium association to maintain a reserve fund under MCL 559.205, and the state's administrative code (R 559.511) sets a specific minimum: the reserve fund must equal at least 10% of the association's current annual budget. This is a comparatively simple, budget-percentage-based floor rather than a component-by-component structural calculation, which makes it easier for a Michigan board to self-check compliance without commissioning a full engineering-level reserve study.
Confirm whether this association's state is one of the roughly 12 with a statutory reserve study mandate → if Florida, confirm SIRS applicability (building height/story count) and current structural funding status → if no state mandate applies, check whether the association's own governing documents set a minimum → confirm whether an upcoming loan or refinance triggers the 2027 Fannie Mae/Freddie Mac 15% reserve-contribution rule.
Delaware's tiered no-study default
Delaware sets a fallback minimum contribution tied to how many major systems the association maintains when no current reserve study is on file: 15% of the annual budget for associations maintaining four or more major systems, 10% for three, and 5% for two or fewer. This tiered structure effectively pushes associations toward commissioning an actual reserve study, since the fallback percentages are a blunt substitute for the more precise, component-specific funding a real study would produce.
Massachusetts and New York: funding required, studies not mandated
Both states require condo reserve funding in some form but do not have a statewide statute mandating that associations commission a formal reserve study to determine the amount — leaving the board more discretion over methodology than in states like Florida or Michigan, but also more exposure if an underfunded reserve later forces a large special assessment that a study might have flagged years in advance.
The federal lending rule arriving in 2027 — and why it matters now
- Starting with loan applications dated January 4, 2027, Fannie Mae and Freddie Mac will require associations to direct at least 15% of annual assessment income into reserves, up from the previous 10% floor.
- Associations with a reserve study completed in the past three years, funded at that study's highest recommended level, are exempt from the flat 15% rule.
- Because this rule affects whether units in the association qualify for conventional financing, boards should treat 2026 budget planning as effectively already governed by this incoming standard, not as a problem to address only once the rule takes effect.
What a board should do regardless of state mandate
Commission or update a reserve study on a regular cycle even where state law doesn't require one, both because it's the clearest defense against a future special-assessment crisis and because it's increasingly what mortgage lenders and buyers expect to see before financing a unit in the community. A study funded at its highest recommended level also happens to be the path that exempts an association from the flat 15% federal contribution rule taking effect in 2027.
Why this is showing up in resale transactions now, not just board budgets
Underfunded reserves have become a disclosure and financing issue that reaches well beyond the board's own budget meetings. Buyers and their lenders increasingly ask for the association's most recent reserve study and its current percent-funded figure as part of the loan approval process, and an association that can't produce a recent study — or one that shows a large, unaddressed funding gap — can slow down or derail a unit sale entirely. Sellers in these associations are increasingly the ones pushing boards to commission an overdue study, since it's their closing that stalls when a lender flags the association's reserve position during underwriting.
What to do if the association is already behind
An association discovering it's significantly behind on reserve funding — whether due to a newly mandatory state requirement like Florida's SIRS or simply years of underfunding catching up — should get a current reserve study first, before deciding on a funding response, since the study is what turns "we think we're behind" into a specific, defensible number the board can act on. From there, the same toolkit applies as any underfunded association: a phased contribution increase, a targeted special assessment for the components closest to failure, or, where state law and governing documents allow, a reserve loan to bridge the gap while phased contributions catch up.
Boards should also expect this area of law to keep moving. Reserve funding legislation is one of the most actively amended categories of community-association law right now, driven largely by post-Surfside structural safety concerns nationally, not just in Florida — which means a board that checked its state's requirements even two or three years ago should treat that research as stale and worth revisiting before finalizing the next reserve budget.
The practical takeaway for any condo board, regardless of state, is the same: get a current reserve study, understand the specific funding rules that actually apply, and treat the federal lending rule arriving in 2027 as a deadline the association is already working toward, not a distant future concern to revisit later.