Washington HOA Reserve Fund Requirements (2026)
RCW 64.34.388 (Washington Condominium Act); SB 5796 (2024)
Law changed after Surfside — new requirements apply
Washington enacted SB 5796 in 2024, requiring reserve studies every 3 years for condominiums. This is part of a national legislative trend following the Surfside collapse, requiring more rigorous reserve planning and transparency.
Yes
Reserve study required for condominiums per SB 5796 (2024); update every 3 years
None
No statutory minimum funding percentage; board must follow reserve study recommended funding plan
Yes
Reserve study results and funding status must be disclosed to unit owners annually as part of the annual budget. Owners may request the full reserve study.
Yes
New law passed after June 2021
- Reserve study required for condominiums per SB 5796 (2024); update every 3 years
- Annual budget must include reserve study findings and current funding status
- Unit owners may request the full reserve study document
- Board must follow reserve study recommended funding plan
- Fannie Mae and FHA guidelines apply regardless of state law
Reserve study results and funding status must be disclosed to unit owners annually as part of the annual budget. Owners may request the full reserve study.
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.
- Washington's SB 5796 (2024) requires reserve studies for condominiums every 3 years — confirm your compliance timeline
- Commission a qualified reserve study professional promptly if you have not done so recently
- Aim for 70%+ funded status to avoid Fannie Mae and FHA flags
- Disclose reserve study findings in your annual budget as required
- Washington's wet climate and seismic risk create unique capital planning considerations — use a reserve professional familiar with Pacific Northwest conditions
Related tools for Washington HOA boards
Managing reserves for a Washington HOA? LotWize tracks your reserve contributions automatically.
LotWize helps self-managed HOA boards stay on top of reserve contributions, annual budget preparation, and state-mandated reserve planning — without hiring a property management company.
Start 14-Day Free TrialThis page provides general legal information about Washington HOA reserve requirements only — not legal advice. Reserve laws vary by community type (planned community vs. condominium) and change frequently. Always consult a licensed Washington HOA attorney and review your governing documents for advice specific to your situation. Statute citations accurate as of 2026.