Virginia HOA Reserve Fund Requirements (2026)
Va. Code § 55.1-1965 (Virginia Common Interest Community Act); HB 2178/SB 1175 (2023)
Law changed after Surfside — new requirements apply
Virginia enacted HB 2178/SB 1175 in 2023, requiring reserve studies every 5 years for common interest communities (including both planned communities and condominiums). This was part of a broader national legislative response following the Surfside collapse.
Yes
Reserve study required for common interest communities; update every 5 years per HB 2178/SB 1175 (effective 2023)
None
No statutory minimum funding percentage; board must follow the reserve study's recommended funding plan or document reasons for deviation
Yes
Reserve study results and current funding status must be disclosed to members as part of the annual budget disclosure required under the Common Interest Community Act.
Yes
New law passed after June 2021
- Reserve study required for common interest communities per HB 2178/SB 1175 (2023); update every 5 years
- Annual budget disclosure must include reserve study findings and current funding status
- Board must follow reserve study recommended funding or document deviation in meeting minutes
- No statutory minimum funding percentage, but 70%+ is the industry benchmark
- Fannie Mae and FHA guidelines apply regardless of state law
Reserve study results and current funding status must be disclosed to members as part of the annual budget disclosure required under the Common Interest Community Act.
Fannie Mae requires HOA to allocate at least 10% of assessments to reserves or demonstrate a 10% funding ratio. FHA requires similar. Low reserve funding can block unit sales and refinancing.
Fannie Mae requirement
Minimum 10% of assessments allocated to reserves, or a demonstrated 10% funding ratio. Associations below this threshold may face loan-level pricing adjustments or deal failure.
FHA requirement
Similar 10% minimum allocation. FHA-backed financing unavailable for units in HOAs that do not meet the threshold, reducing the buyer pool and depressing values.
- Virginia's 2023 law (HB 2178/SB 1175) requires reserve studies every 5 years — confirm your compliance schedule
- Commission a qualified reserve study professional to ensure the study meets statutory requirements
- Aim for 70%+ funded status to avoid Fannie Mae and FHA flags
- Disclose reserve study results in your annual budget as required
- Consult an HOA attorney to verify the exact applicability and effective dates for your association
Related tools for Virginia HOA boards
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Start 14-Day Free TrialThis page provides general legal information about Virginia HOA reserve requirements only — not legal advice. Reserve laws vary by community type (planned community vs. condominium) and change frequently. Always consult a licensed Virginia HOA attorney and review your governing documents for advice specific to your situation. Statute citations accurate as of 2026.