Reserve Funding for DC Condos: Why The Overlook at Washington View Can't Afford to Wait
Hard data on what you actually need to protect your property value and avoid devastating special assessments
Critical Issue
The DC Reserve Reality
DC condo law doesn't mandate specific reserve percentages, but that flexibility creates risk. While the statute allows boards to set their own reserve policies, lenders and the market effectively set the standards you must meet.
For a 77-unit building, falling short of industry benchmarks can trigger financing problems, unit-value erosion, and emergency special assessments that devastate household budgets.
Legal Framework
DC Law Sets No Hard Floor—But That's Not Freedom
What DC Law Actually Says
DC's condo statute authorizes boards to fund reserves and disclose balances, but imposes no minimum percentage or study schedule. This flexibility sounds good—until you realize it leaves boards vulnerable to underfunding.
The real test isn't legal compliance; it's lender acceptance and financial resilience.
The Real-World Standard
Without a statutory mandate, DC condos are judged by two metrics: whether reserves cover long-term repairs and whether the building qualifies for common mortgage products.
Fall short on either front, and you face financing rejection or emergency special assessments.
Why Reserve Funding Matters Now
For a 77-unit DC condo, there's no magic number in the statute—but lender requirements and industry standards create very real thresholds. Fall below them, and you risk financing problems, emergency assessments, and plummeting property values.
Understanding these benchmarks isn't optional. It's essential for protecting your investment and maintaining the building's marketability.
Critical Issue
DC Law: Flexible But Not Optional
DC's condo statute doesn't mandate a specific reserve percentage or study schedule—it leaves those decisions to boards. But this flexibility comes with a catch: lenders and buyers judge your building's financial health by industry benchmarks.
Without adequate reserves, you risk losing financing eligibility and tanking property values.
The message is clear: funding reserves isn't just good practice—it's essential for protecting your investment.
Why Reserve Funding Matters for Your 77‑Unit Condo
Reserve funding isn't just financial housekeeping—it's about protecting your home's value and your financial stability. Inadequate reserves trigger special assessments, block potential buyers from securing loans, and crater resale values. For DC condos, there's no statutory minimum, but lender rules and market realities set clear expectations.
Understanding reserve funding keeps your investment secure, your building financeable, and your community thriving.
Chapter 1
DC Law: Flexible but Not Optional
DC condo law doesn't mandate specific reserve percentages or formal study schedules. Instead, it authorizes boards to include reserves in budgets and requires disclosure in offering documents.
This flexibility means your board's decisions are judged by two critical standards: adequacy for long-term repairs and maintaining loan eligibility for unit owners.
Without statutory minimums, lender requirements and industry benchmarks effectively become the law of the land.
The Bottom Line
Why Reserve Funding Actually Matters
Preserve Property Values
Under-reserved buildings face financing restrictions that make units harder to sell and lower property values.
Avoid Special Assessments
Adequate reserves prevent surprise 5-figure bills when roofs, elevators, or facades need replacement.
Maintain Loan Eligibility
Most lenders require minimum reserve funding levels—underfunded buildings can't qualify for standard mortgages.
The Reality Check
DC Law Sets No Minimums—But Lenders Do
Washington DC condo law gives boards flexibility to set reserve levels, but staying financeable means meeting lender expectations. Your reserve strategy determines whether owners can secure mortgages—and whether you'll face surprise assessments.
The Legal Baseline in DC
What DC Law Requires
DC condo law authorizes boards to maintain reserves and disclose balances in offering documents. However, it does not mandate a specific reserve percentage or formal study schedule.
This flexibility means boards are judged by two key metrics: whether reserves adequately cover long‑term repairs and whether the building remains eligible for common mortgage products.

The Real Standard
Without statutory minimums, lender requirements and industry benchmarks effectively become the law for financially healthy condos.
The Bottom Line
Measuring Reserve Health: Success & Failure Signals
For your 77-unit building, these are the critical benchmarks that determine financial strength and market viability:
Success: Funded Percentage
Maintain 75% or higher funded status based on the latest reserve study. This signals proactive financial management and stability.
Failure: Below 75% funded often leads to scrutiny, higher interest rates, or outright loan rejections.
Success: Up-to-Date Reserve Study
Commission a professional reserve study every 3-5 years, and fund to its recommendations. This demonstrates foresight and accurate planning.
Failure: Outdated or ignored studies mean planning in the dark, leading to financial surprises.
Success: Lender Eligibility
Ensure the building consistently meets FHA/VA and conventional loan requirements. This opens the market to all potential buyers.
Failure: Ineligibility significantly restricts buyer pool, impacting property values and sales.
Success: Special Assessment Trends
Special assessments should be rare, planned, and minor, covering unforeseen but small expenses. Major projects are covered by reserves.
Failure: Frequent or large special assessments erode owner confidence and financial stability.