What percent funded means
Percent funded is the most quoted number in a reserve study. It compares what you have saved to how much of your property has already worn out.
The calculation
Each component has a fully funded amount: its replacement cost multiplied by the share of its life already used.
Example. Roofs cost $290,400 to replace and last 25 years. They have 9 years left, so 16 of 25 years are used up. The fully funded amount is $290,400 × 16 ÷ 25 = $185,856.
Add that up across every component to get the fully funded balance. Percent funded is your reserve balance divided by that total.
Example. An association's components add up to a fully funded balance of $475,413. It has $185,000 in reserves. $185,000 ÷ $475,413 = 38.9% funded.
How to read it
At 100%, the association has saved exactly as much as its components have worn. Reserve professionals often describe an association below roughly 30% as weak, 30% to 70% as fair, and above 70% as strong. Treat those as a rule of thumb, not a standard.
What it does not tell you
- Whether you will run out of cash. An association can be 40% funded and fine for a decade, or 60% funded with a roof due next year that it can't pay for. Only a year-by-year projection shows that.
- Whether the inputs are right. Understate a cost or overstate a remaining life and percent funded rises without a dollar being saved.
- What to contribute. It is a snapshot. The contribution comes from the projection.
Why it still matters
It is a quick, comparable measure, some states require it to be disclosed, and lenders and buyers ask for it. Report it alongside the projection, not instead of it. The steps for the projection are in how to do a reserve study yourself.
Skip building the spreadsheet
Reserve Study Kit is an Excel workbook that does this math for you: a 30-year plan, percent funded for every year, and the contribution that keeps you above your minimum. $79, one time.
See how it works