Minimum Reserve Contributions
While most HOA governing documents do not require minimum monthly reserve contributions and the Davis-Stirring Act is silent on the subject, nearly all mortgage lenders are currently requiring that homeowner associations deposit at least 10% their monthly assessments into their reserve bank account.
Given that nearly all real estate lenders sell their loans into the secondary mortgage market, most mortgage lenders find it necessary to comply with the requirements of the Federal Housing Administration (FHA), the Veterans Administration (VA), the Federal Home Loan Mortgage Corporation (FHLMC), and Federal National Mortgage Association (FNMA).
Unless a current reserve study justifies a lower amount, the mortgage industry requires that 10% or more of an association's assessments be set aside as reserves.
American HOA Management