Over the last few post, we’ve outlined several of the key changes in the recent Fannie Mae update and where those changes may begin to show up in practice. These changes are generally aligned with Freddie Mac as well, reflecting a broader shift in how reserve funding is evaluated in lending.
The final consideration is determining the appropriate time to review a specific property and assess whether its reserve study aligns with the new changes.
When a Review May Be Worthwhile
In many cases, no immediate action is needed. However, a closer look may be helpful in situations such as:
- A property with an older reserve study that may not reflect current costs or conditions
- Communities using baseline or lower funding approaches
- Associations where reserve contributions may not align with the study’s recommendations
- Properties where financing, refinancing, or sales activity is expected
A proactive review in these situations can help prevent complications or questions during the sales or lending process. This review also serves to determine if an updated reserve study is necessary.
A Practical Next Step
A closer review does not always require a full update. In many cases, the goal is simply to confirm that the current reserve plan will hold up well if reviewed in connection with lending.
Where adjustments are needed, addressing them in advance is generally more straightforward than responding during a transaction or lender review.
Once you have reviewed your reserve study, if you have a property that may experience any of these situations, we would be glad to help.
We are ready to assist with any property concerns that arise after you have reviewed your reserve study.
