The reserve-study alternative, and the loophole that closed

The 15% figure is a default, not the only route. A project may substitute a reserve study, on conditions Fannie's Selling Guide states directly: the budget “must include the highest recommended reserve allocation amount in the reserve study,” and the lender may rely on a study “provided it has been completed within three years of the date on which the lender approves the project.”

Read those two conditions together before treating the study as the easier path. It must be current within three years, and the budget must fund it at its highest recommended tier — not its baseline, not its threshold, not the number the board found most palatable. What LL-2026-03 tightens is precisely the baseline-funding workaround that let projects claim study-based compliance while funding at the bottom of the study's range.

So an Indiana board has three honest options, and should pick one deliberately:

1. Fund 15% of budgeted assessment income to reserves and stop thinking about it.
2. Commission or refresh a reserve study, then fund it at its highest recommended level. This can come in below 15% for a well-maintained building with long remaining useful lives — that is the case in which the study is worth its cost.
3. Do neither, and discover the consequence at the closing table on somebody's unit sale.

The critical-repair cliff

Separate from reserve percentages, and harsher. Fannie's ineligible-projects rules make a project ineligible where there are:

“any unfunded repairs costing more than $10,000 per unit that should be undertaken within the next 12 months (does not include repairs made by the unit owner or repairs funded through a special assessment).”

Note the parenthetical, because it is the escape hatch: a special assessment that funds the repair takes it out of the ineligibility calculation. A board facing a large structural item is generally better off levying for it than deferring it, in financeability terms — the deferral is what makes the project unlendable, not the cost. This $10,000 figure is Fannie's; we did not separately confirm Freddie's corresponding threshold, which sits in its own Guide sections.

Why this lands harder in Indiana this year

Indiana associations are heading into this with roofs on their minds. The derecho of 11 August 2026 produced a federal major disaster declaration covering 21 Indiana counties, including the dense association counties of Marion, Hamilton, Hancock, Lake and Porter. Hail and straight-line wind damage drives exactly the category of capital expenditure — roofing, siding, gutters, common-element envelope — that reserve studies are built around.

An Indiana condominium that spends its reserve balance on storm repair in autumn 2026 and does not rebuild it enters January 2027 measured against a floor half again as high as the one it was last measured against. The two events are unconnected in origin and thoroughly connected in effect.

What a board can do in the next ninety days

• Calculate the actual percentage now. Reserve contribution divided by total annual budgeted assessment income. Boards routinely guess this wrong in the optimistic direction.
• Date your reserve study. If it will be more than three years old when a 2027 buyer applies, it is not usable, and commissioning one takes months.
• Set the 2027 budget against the 15% figure, not the 10% one. The budget adopted this autumn is the one lenders will be reading in January.
• Deal with deferred structural items rather than carrying them. An unfunded critical repair over the per-unit threshold is a harder disqualifier than a thin reserve percentage.
• Watch the interaction with Indiana's new budget rules. Since 1 July 2026 an association within IC 32-25.5's reach that cannot raise a quorum faces statutory ceilings on how much it may increase the budget without one. A board that needs a substantial reserve increase and cannot get members to a meeting now has two constraints operating at once, pulling in opposite directions.

What to watch

The January 2027 date applies to loan application dates, not closings, so the practical effect begins with applications taken over the New Year holiday. Boards budgeting in October and November are already inside the window that matters.