Massachusetts Reserve Study Requirements: What the Law Says, and What Lenders Now Expect

Massachusetts does not have a law requiring condominium or homeowner associations to commission a reserve study. However, this doesn’t tell the full story.

It is also increasingly beside the point. Between the Condominium Act's "adequate reserve" rule and the 2026 changes to Fannie Mae and Freddie Mac lending standards, most Massachusetts condo boards now need a current professional reserve study whether the statute says so or not.

Here is what the law actually requires and what changed this year, as well as what boards should know (and do) about it.

What Massachusetts Law Requires

The relevant statute is the Massachusetts Condominium Act, M.G.L. Chapter 183A. Section 10(i) requires every condominium in the Commonwealth to maintain an adequate replacement reserve fund, collected as part of common expenses and held in an account separate from operating funds.

Two things stand out about that wording:

• "Adequate" is not defined. The statute sets no dollar figure, no percentage of budget, and no funding method. Adequacy depends on the property: its age, its components, and what they will cost to replace.
• There is no requirement to prove adequacy through a study. The law tells trustees to hold enough in reserve. It does not tell them how to work out what "enough" is.

Chapter 183A applies to condominiums. Homeowner associations governed by a declaration of trust or restrictive covenants rather than a master deed generally fall outside it, and their reserve obligations come from their own governing documents.

Legislators have tried to add a study requirement before, most notably a Senate bill that would have required capital reserve studies for larger condominium associations, but nothing has been enacted. For the moment, the Massachusetts reserve study requirement is a best practice, not a mandate.

What Changed in 2026

On March 18, 2026, Fannie Mae issued Lender Letter LL-2026-03 and Freddie Mac issued a matching bulletin. Together they rewrite the financial tests a condominium project must pass for units to qualify for conventional mortgages, and reserves sit at the center of the changes.

Minimum reserve contribution rises from 10% to 15%. From January 4, 2027, a condo association's budget must allocate at least 15% of annual assessment income to reserves for the project to be warrantable. Most Massachusetts associations that have been sitting at the old 10% floor will need to raise dues, cut elsewhere, or use the alternative below.

A reserve study is now the only alternative, and it comes with conditions. From August 3, 2026, an association funding below the minimum can still qualify by relying on a professional reserve study, but only if:

• the study was completed or updated within the last three years, and
• the budget funds reserves at the study's highest recommended level. Baseline funding no longer counts.

For a board, that turns a vague statutory duty into a concrete lender test. If your building loses warrantable status, buyers in your community cannot get Fannie Mae or Freddie Mac-backed loans, resale values suffer, and refinancing gets harder for every owner, not just the one trying to sell.

In a state where condominiums make up a large share of the housing stock, from Boston and Cambridge to Worcester and the Cape, that is a requirement in everything but name.

What Counts as a Compliant Reserve Study

Neither Chapter 183A nor the Fannie Mae letter dictates the format, but lenders and the industry work to the Community Associations Institute's National Reserve Study Standards. 

A study that will satisfy a lender review, and stand up if owners challenge the budget, should include the following:

• A physical analysis – a component inventory of everything the association is responsible for replacing (roofs, siding, paving, boilers, elevators, decks, drainage), with condition, remaining useful life, and current replacement cost. Massachusetts freeze-thaw cycles, coastal exposure, and heating-system wear shorten the lifespan of several of these compared with national averages, so generic figures are not enough.
• A financial analysis – the current reserve balance, the percent funded figure, and a 30-year funding plan showing what annual contribution keeps the fund adequate without special assessments.
• A recommended funding level that the board can adopt and show in the budget. Under the new lender rules, this is the number a lender will check against.

Because the Fannie Mae rule requires the study to be no more than three years old, the standard three-to-five-year update cycle should now be treated as a three-year cycle for any Massachusetts condo that wants to use the study alternative.

What Massachusetts Boards Should Do Now

So, what exactly should Massachusetts boards do now?

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We know a lot of the legal information can be confusing, so here is a quick checklist to run through to make sure you are up to date with all the recent changes:

1. Check your current reserve line. Divide your annual reserve contribution by total assessment income. If it is below 15%, you have until January 2027 to either raise it or have a qualifying study in place.
2. Check the date of your last study. If it is older than three years, or you have never had one, you should commission a full study as soon as possible.
3. Fund at the recommended level, not the minimum. If you plan to rely on the study alternative, the budget has to match the study's highest recommendation, and that has to be visible to a lender reviewing your documents.
4. Minute the decision. Record the funding plan the trustees have adopted. It protects the board and gives lenders and buyers a clean paper trail.
5. Confirm who prepares the study. Massachusetts does not restrict who can prepare a reserve study, but a designated Reserve Specialist working to national standards is what lenders expect to see. Our guide to choosing a reserve study company covers what to look for.

A professional study for a typical Massachusetts association costs a few thousand dollars. Losing warrantable status costs every owner in the building.

Reserve Studies Across Massachusetts

Reserve Study Group prepares plain-English reserve studies for condominium associations and HOAs across Massachusetts, built to the National Reserve Study Standards and delivered through the PropFusion planning platform so your board can track funding between updates. If your community needs a study on file before the 2027 lender changes, request a proposal and we'll scope it for your property. Reserve study rules vary widely from state to state, and our state law guide covers the rest of the country.

FAQs

• Is a reserve study required in Massachusetts? Not by state law. Chapter 183A requires condominiums to maintain an adequate replacement reserve fund but does not require a study to determine it. From 2026, however, Fannie Mae and Freddie Mac lending rules mean most condos need a current study to stay warrantable unless they fund reserves at 15% of budget or more.
• What is the Massachusetts condo reserve fund requirement? M.G.L. c.183A §10(i) requires every condominium to maintain an adequate replacement reserve fund, funded through common expenses and kept separate from the operating account. "Adequate" is not defined in the statute.
• How often should a Massachusetts association update its reserve study? Industry practice is every three to five years. Because the new Fannie Mae rule only accepts studies conducted or updated within the last three years, three years is now the practical maximum for condos relying on the study alternative.
• Do the Fannie Mae changes apply to HOAs as well as condos? The project standards apply to condominium projects. HOAs with detached homes are generally not reviewed under condo project standards, but their reserve obligations under their own governing documents still apply.

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