Definition
Percent funded is the ratio of an association’s actual reserves to the amount its reserve study says it should have, expressed as a percentage.
Why It Matters Financially
Percent funded is a key indicator of financial health that lenders, agencies, and buyers all watch. A low percent funded signals likely future borrowing and can affect both loan terms and unit values.
Example Use Case
An association at 30 percent funded faces a large project and turns to financing to cover the gap.
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Related Terms
Reserve Fund, Full Funding, Reserve Study, Association Reserves, Creditworthiness