Does Your New Condo Have a Reserve Fund?

Condo Book Research · Updated Oct 11, 2026 · 4 min read

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 about 2,100 NYC condo offering plans to see how much new buildings set aside.

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. So it's worth knowing whether a new building is saving up from day one.

Every offering plan includes a projected first-year budget (Schedule B). We checked about 2,100 of them for a reserve line.

The Short Version

• About 75% of all NYC condo budgets include a reserve line, rising to 89% of those filed since 2022.
• The typical reserve is 10% of the budget.
• That works out to a median of about $50 per apartment per month, whatever the building's size.
• Large buildings set aside a smaller share: about 4% of the budget in buildings with 100+ apartments.

Reserves by Building Size

Notice the last column: big and small buildings put away about the same dollars per apartment. 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.

A Reserve Line Isn't a Funded Reserve

Here’s the catch: in many new condos, the reserve starts at zero. The budget line means the board plans to save a little each month from common charges. Many plans say outright that the sponsor isn't contributing a lump sum to start the reserve.

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 means 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. It's also part of why, since the 2021 Surfside collapse in Florida, both companies have looked harder at buildings with big unfunded repairs, and why more NYC budgets now include a reserve line.

Keep in mind: 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 or mid-size 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.

Common Questions

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 $50 per apartment per month. Large buildings tend to budget a smaller share, about 4%.

Do new condos have reserve funds?

Most budget for one: about 89% of NYC condo plans filed since 2022 include a reserve line. But it often starts at zero and builds 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 this comes from: the projected first-year budgets (Schedule B) in about 2,100 NYC condo offering plans. Reserve lines are budget items with "reserve" in the name. 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.