Why this page exists
This reference summarizes public guidance and industry standards; links are included so readers can verify independently.
What is “Percent Funded”?
Definition
Percent Funded compares your current reserve balance to the Fully Funded Balance (the amount you should have, based on the age and replacement cost of each component). In short: how close are you to 100% of what you ought to have set aside?
See: CAI Reserve Study Standards & primers; “Fully Funded Balance” explanations.
Standards language
CAI’s Reserve Study Standards describe “fully funded” as being at or very near 100%, and urge providers to use consistent terminology when presenting funding goals.
References: CAI Reserve Study Standards and summaries.
Benchmarks you can use
| Funding level | Typical interpretation | What it often implies |
|---|---|---|
| ~70%–100%+ | Generally considered “well/adequately funded” by many practitioners. | Lower risk of special assessments when projects come due. |
| ~30%–70% | Middle band / fair. | Some risk; depends on timing of near-term replacements. |
| <30% | Weak / poorly funded. | Higher likelihood of special assessments or deferrals. |
Benchmarks summarized from reserve-study providers and industry guidance; exact targets vary by community age, components, and risk tolerance.
California context: what must be in the plan
California’s Davis-Stirling Act requires associations to conduct reserve studies and to adopt a reserve funding plan at an open meeting. That plan must include a schedule of changes in regular or special assessments needed to fund reserves. If projections rely on future special assessments, owners should be able to see when and how much in that plan.
References: Davis-Stirling Civil Code §§5550–5560 (plan & assessment schedule), CAI summaries.
How to compare one HOA to another
Checklist (quick)
- Compute or confirm the Percent Funded on the same “as-of” date.
- Look for a funding plan showing timing and size of any special assessments used in projections.
- Separate cash on deposit today from hypothetical future revenue in owner-facing summaries.
- Note whether the latest financials are an audit or a review.
Simple comparison table (example)
| Association | As-of Date | Percent Funded | Special assessments assumed? |
|---|---|---|---|
| HOA A (sample) | FY 2025 | 82% healthy | No |
| HOA B (sample) | FY 2025 | 46% fair | Yes (documented) |
| HOA C (sample) | FY 2025 | 24% weak | Yes (not yet approved) |
Tip: replace the sample rows with local associations once you have public reserve summaries or owner packets.
Primary sources & further reading
- CAI Reserve Study Standards (definitions, “fully funded” guidance).
- Davis-Stirling: reserve study & funding plan requirements; plan should include schedule of changes to regular/special assessments.
- Benchmarks commonly used by reserve-study providers describing 70%+ as generally healthy and <30% as weak.
- Percent Funded formula and “Fully Funded Balance” overview (plain-English primers).
Note: benchmarks are guidance, not law. Component age, scope, and risk tolerance vary by community; consult your reserve professional.