A reserve study can present several funding schedules. When a lender uses the study pathway, the adopted budget’s contribution and the selected schedule both matter.
ReserveGap applies published tests to numbers you enter. It is not a reserve study, not legal advice, and not a lender determination.
The study pathway in one sentence
If the association is not budgeting reserves at the Selling Guide’s percentage floor, a lender may rely on a qualifying reserve study instead — but only when the other Full Review criteria are met and the adopted budget funds the study’s highest recommended reserve allocation.
That rule is the heart of the August 2026 clarification in Lender Letter LL-2026-03.
What “highest recommended” means
Reserve studies often show more than one funding goal: for example baseline, threshold, and full funding — or a single “recommended” contribution. For the mortgage study pathway:
- For the budget year being evaluated, identify the highest recommended annual contribution across the study’s recommended funding schedules. Do not select a different year’s maximum.
- Compare that figure to the reserve line in the adopted budget (this year’s contribution, not only cash in the bank).
- If the study shows one schedule, use that schedule.
- Recency matters: lenders look for a study (or update) generally within three years of the project decision date, plus independence and other Selling Guide conditions. Recency alone does not force acceptance.
A budget below the highest recommended contribution does not meet that numerical study comparison, even if it follows another schedule in the study.
Why baseline funding dropped out
Baseline funding is the model where projected reserve cash is allowed to approach, but not fall below, zero over the study horizon. It can look “adequate” in a cash-flow chart while contributing less each year than threshold or full-funding schedules.
For loan applications dated on or after August 3, 2026, lenders using the study pathway are not permitted to rely on baseline funding to waive the percentage reserve requirement. Baseline funding and the lender’s study pathway answer different funding questions.
Florida boards comparing HB 913’s baseline-style goals to mortgage tests should read both sets of rules side by side — state compliance and lender pathways answer different questions. See our Florida HB 913 vs mortgage tests piece for that split.
How this differs from the 15% floor
| Comparison | Study pathway | Percentage floor |
|---|---|---|
| Core question | Does the budget fund the study’s highest recommended contribution? | Is the reserve line ≥ 15% of budgeted assessment income (from Jan 4, 2027)? |
| Key date | Applications from Aug 3, 2026 (enhanced study rules) | Applications from Jan 4, 2027 (15% replaces 10%) |
| Needs a study? | Yes, qualifying study + lender acceptance | No, if the percentage clears (lender still reviews the rest of the project) |
They are alternative numerical pathways, not two penalties stacked on the same contribution line. A building can clear one comparison and still need the lender’s full project review on insurance, repairs, delinquencies, and other items.
A worked comparison
Suppose the study shows:
- Baseline recommended contribution: $80,000 / year
- Threshold: $110,000 / year
- Full funding: $140,000 / year
The association’s adopted budget reserves line is $95,000. Budgeted assessment income is $900,000.
- Highest recommended for the study pathway: $140,000 → budget is $45,000 / year short of that schedule.
- 15% floor (from Jan 2027 applications): 15% × $900,000 = $135,000 → budget is $40,000 / year short of the percentage benchmark.
Neither gap is a fine. These are annual contribution comparisons, not immediate cash requirements. Financing illustrations need a separately sourced funding amount and timing; borrowing or collecting a special assessment does not automatically resolve either comparison.
Read alongside
- Reserve study to funding plan
- The 15% condo reserve rule
- Florida HB 913 baseline funding vs the mortgage tests
For Full Review budget and reserve-study conditions, see the Selling Guide.
Reports are prepared after checkout and emailed within 1 business day. Not an instant download. Results are indicative; only a lender’s project review decides eligibility.