As of today, January 2024, the latest guidance from Fannie Mae and Freddie Mac on condominiums involves their updated project review requirements that came into effect on September 18, 2023. These policies were established in response to the tragic Champlain Towers South collapse in Florida and prioritize project financial stability and structural integrity. Here are [...]
The Challenges of Raising Assessments to fund association reserves As a board president in Washington State, you've just discovered that your association needs $200,000 to replace the clubhouse roof due to a leak. Your operating budget has no contingency funds, and your reserve fund, which has not had an increase in many years, has a [...]
7 reasons to not ignore your condominium reserve study: Deferred maintenance: Without a reserve study, it can be difficult to budget for and plan for major repairs and replacements. This can lead to deferred maintenance, which can cause the condition of the condominium/ homeowner complex to deteriorate over time. Special assessments: If the condominium/ [...]
For purposes of this question we are defining capital improvements as the expenditure of funds for new, not previously existing, components. Some associations want to include capital improvements in the reserve study. Most do not. In our experience the only reason that associations include capital improvements in their reserve study funding plan is because they [...]
We frequently get questions from board members on why certain assets not included. What assets are most likely to be excluded? The general rule is if a component (assets) has a life greater than 30 years its outside the scope of the study. For example, natural gas piping has a life of 50 years [...]
Before a board votes to use reserves to fund a project they should ask three questions to determine whether or not to use HOA or Condominium reserve funds. Members should ask: Is this a maintenance project? Use HOA reserve funds for maintenance projects only. Painting the exterior of the building(s) is a great example of [...]
We have talked previously about reserve fund balances or percent funded. To help you better manage your HOA reserve fund balances, here’s a list of tips to take into consideration: Adjust the budget when needed. Most boards are afraid to increase dues just to fund reserves. Increasing dues incrementally over time is better than asking [...]
In Washington State do reserves have to be fully funded? It’s a great question - when you review the Washington Uniform Common Interest Ownership Act (WUCIOA) it really doesn't say how much an association needs to have. Fully funded is one of the most misused terms in our industry because there is not just one [...]
What is the 10% Rule There are two areas where condominium buyers may hear about the 10 percent rule: FHA Approval - FHA stipulates that any one single owner cannot own more than 10% of the units. This is for FHA approval which frankly I don't hear much about these days FHA / [...]
What is a Healthy Reserve Balance? We get this question in our office all the time - do we have enough money in reserves? HOA or Condominium associations need to keep track of how much money they have on hand at all times. This helps ensure that there will always be enough cash available for [...]
