Is Our HOA Reserve Fund Underfunded? Reading Percent Funded

Percent funded is the reserve balance divided by the reserve needed. The disclosure summary also asks for the deficiency per unit (Civ. Code §5570), which buyers and lenders read.

Better test: 30 years of cash

The question that counts is whether the fund covers every repair and replacement as it comes due. Reservetally projects 30 years of contributions, interest and expenses and finds the lowest contribution that never dips below your floor.

The app's sample is a fictional 48-unit townhome association with 27 components costing $1,189,400 to replace today. By the §5570(b)(4) formula the reserve needed at the end of 2026 is $770,034; the projected balance is $486,000, so the association is 63.1% funded, a deficiency of $284,034 ($5,917 a unit). Its planned $118,000 contribution, growing 3% a year, keeps the fund above zero for 30 years — the low point is $267,479 in 2032. The lowest contribution that still does that is $85,977, about $149 a unit a month.

Last reviewed 2026-10-29. General information, not legal or financial advice. Your governing documents, reserve specialist and adviser come first.