Does Your New Condo Have a Reserve Fund?
Summary: A reserve fund is the condo's savings account for big repairs, and it's your best protection against a surprise assessment. We checked the first-year budgets in NYC condo offering plans to see how much new buildings set aside.
Reserves by Building Size
Roofs leak, boilers die and facades need repair. When they do, the condo pays from its reserve fund, or, if there isn't enough, from a special assessment on every owner. About 77% of the NYC condo budgets we checked include a reserve line, rising to 92% of those accepted since 2022. The typical (median) reserve is 10% of the budget, about $590 per apartment a year.
| Building size | Budgets with a reserve line | Before 2022 → since | Median reserve, % of budget | Median per apartment, per year |
|---|---|---|---|---|
| Under 10 apartments | 86% of 897 budgets | 75% → 96% 426 · 471 budgets | 10% | $600 696 budgets |
| 10–29 apartments | 71% of 440 budgets | 62% → 84% 267 · 173 budgets | 10% | $550 205 budgets |
| 30–99 apartments | 67% of 288 budgets | 59% → 87% 206 · 82 budgets | 9% | $660 83 budgets |
| 100+ apartments | 62% of 144 budgets | 56% → 92% 120 · 24 budgets | 5% | $510 25 budgets |
Budget shares are among the budgets with a reserve line. Per apartment: the reserve lines ÷ residential units, in plans with no stores or offices, rounded to the nearest $10.
Notice the last column: big and small buildings put away similar dollars per apartment, and the size groups' medians stay between $510 and $660 (the 100+ figure rests on fewer budgets than the others). As a share, buildings with 100+ apartments set aside only about 5% of the budget. Big buildings simply have much larger budgets for staff and amenities, so the reserve is a smaller slice. Since 2022, the share of budgets with a reserve line has risen in every size group.
- 10%Under 10 apartments
- 10%10–29 apartments
- 9%30–99 apartments
- 5%100+ apartments
Among the budgets with a reserve line.
A Reserve Line Isn't a Funded Reserve
The catch: in some new condos, the reserve starts at zero. The budget line means the board plans to save a little each month from common charges. Some plans say outright that no reserve fund is set up at closing: 13% of the 1,273 plans with a reserve line whose reserve fund provision we extracted.
That's usually fine for a brand-new building, since big repairs are years off and new construction typically comes with warranties. But it means the reserve grows slowly, and the first board decides whether to keep funding it.
Good to know: some plans route part of the buyer's working capital contribution at closing into the reserve, which gives it a head start.
Why a Condo Wants a Reserve: Mortgages
A reserve isn't only about avoiding assessments. It also decides whether buyers can get a mortgage in the building, and that affects every owner's resale value.
Most standard (conforming) mortgages are sold to Fannie Mae or Freddie Mac, the two government-sponsored companies that buy home loans from lenders. Before a lender makes a loan it plans to sell to them, it has to check the whole condo, not just the apartment. One of the checks is the budget: both companies' guides look for at least 10% of the condo's budgeted common charge income going to replacement reserves. A building that falls short can still qualify, for example with a professional reserve study showing its funding is adequate, but that's extra work and not every lender will do it.
If a building doesn't pass, a lender can't sell those loans to Fannie or Freddie. Buyers there are left with lenders who keep loans on their own books, which can mean fewer choices, a bigger down payment or a higher rate. Fewer buyers who can finance can mean slower, cheaper resales for everyone in the building.
That's why the 10% typical reserve in the budgets we checked matters: it lines up with the benchmark these lenders use. Even so, only 66% of the reserve lines reach 10% of the budget. Since the 2021 Surfside collapse in Florida, both companies have also looked harder at buildings with big unfunded repairs, which may help explain why more NYC budgets now include a reserve line.
The catch: many NYC condo loans are larger than the conforming limit (jumbo loans), and those lenders set their own rules, though many look at reserves too. Ask your lender early whether the building is approved for your loan.
What to Look For
- Find the reserve line in Schedule B. It may be called "reserve," "reserves for replacement" or "capital reserve."
- Check the size. Around 10% of the budget is typical for a small building. Much less, or none at all, means more risk of assessments down the road.
- Read the footnote. It often explains whether the reserve is funded at closing, monthly, or not at all.
- For resales, ask for the current balance. The building's most recent financial statements will show how much is actually in the reserve, which matters far more than the original budget.
- Watch for amenities. Pools, gyms and roof decks all wear out. A building with lots of amenities and a thin reserve deserves extra questions.
Compare buildings on our operating expense benchmarks. See also first-year condo operating expenses and how to read Schedule B.
FAQ
How much should a NYC condo reserve fund be?
In new NYC condo budgets, the typical reserve line is about 10% of the annual budget, or roughly $590 per apartment a year. Large buildings tend to budget a smaller share, about 5%.
Do new condos have reserve funds?
Most budget for one: about 92% of NYC condo plans accepted since 2022 include a reserve line. But it may start at zero and build up through common charges.
What happens if a condo doesn't have enough in reserves?
The board can levy a special assessment on owners, raise common charges or borrow to pay for major repairs.
Does a condo's reserve fund affect getting a mortgage?
Yes. Fannie Mae and Freddie Mac, which buy most standard mortgages, generally look for at least 10% of a condo's budget going to replacement reserves before a lender can sell them a loan in that building. Buildings that fall short may need a reserve study to qualify, and buyers there may have fewer loan options.
Where do I find the reserve fund in an offering plan?
In Schedule B, the projected first-year budget, and its footnotes. For an existing condo, ask for the latest audited financial statements.
Where do these figures come from?
From the projected first-year budgets (Schedule B) in 1,769 NYC condo offering plans whose expense lines add up to the stated total. Budgets are developers' first-year projections. The 10% lending benchmark is from Fannie Mae's Selling Guide and Freddie Mac's Seller/Servicer Guide condo project rules. Updated October 2026.
How is a reserve line counted?
Reserve lines are budget items with "reserve" in the name. Per-apartment figures are from the 1,009 budgets with a reserve line in plans without stores or offices.
Related: Condo Supplies Cost per Unit, by Size · How Much Should NYC Condo Common Charges Be?