reserve contribution: That Doesn’t Count Towards the 10% Reserve Contribution - 11/10/15 08:03 PM
That Doesn’t Count Towards the 10% Reserve Contribution
It’s budget season for many condominiums who run on a calendar year and we have run across an issue with several of our clients and potential clients.  Everyone knows that FHA (and Fannie/Freddie) require that a condominium contribute 10% of its budget to the reserve fund each year.  So when don’t the contributions count towards the 10%?
When the funds are already delegated to fund an existing liability.  We have seen this many times but let’s take a recent example:
A condominium client’s budget is $450,000 so the minimum that they should be transferring annually to … (10 comments)

reserve contribution: Condo Unit Financing Almost Killed Due to Reserve Contribution - 03/10/15 11:35 PM
Condo Unit Financing Almost Killed Due to Reserve Contribution
Last week a loan officer friend of mine contacted me regarding a loan he had in  process.  At the 11th hour, the lender was rejecting the conventional (Fannie Mae) loan based on the association’s contribution to the reserve account.  According to the underwriter, the association was contributing less than 10% to the reserve account.
He asked for my input.
After reviewing a copy of the budget, I wrote down some points for my friend to bring to the attention of the underwriter.
The first of which was that the underwriter was calculating … (23 comments)