Why this is the sleeper change of 2026

Reserve studies sold in the upper Midwest very commonly present a baseline plan as the recommended plan. It is the least painful number, it is defensible on its own terms, and it is what a board under assessment pressure asks for. An association with a professional, current reserve study and a board that followed its recommendation can therefore fail this test without having done anything wrong.

It also compounds with the other reserve change. From January 4, 2027 the minimum allocation rises from ten to fifteen percent of annual budgeted assessment income. An association relying on the reserve-study route to satisfy that requirement now has to be relying on a study whose highest recommendation is not a baseline plan.

The currency rule, and the North Dakota footnote in it

The study also has to be recent enough:

“The lender may review the most current reserve study or a reserve study update provided it has been completed within three years of the date on which the lender approves the project.”

And there is a note in the Selling Guide that matters more in some states than others:

“Note: Individual states may have various statutes concerning the use and content of reserve studies. Fannie Mae requires that a reserve study used by the lender in its analysis meet or exceed requirements set forth in relevant state statutes.”

North Dakota has no such statute. There is no state requirement to commission a reserve study, no content standard, and no funding mandate. SB 2394, which would have created one, failed in the Senate 0 to 46 in 2025. So for a North Dakota association the secondary-market standard is not a floor above a state requirement — it is the only requirement there is. Our North Dakota reserve studies page covers the state-law position.

What a board faces this autumn

Read your own study's recommendation page. Identify which plan is presented as recommended and whether it is a baseline plan. The language to look for is exactly the one in the rule: a plan under which the reserve cash balance approaches but never falls below zero.

If it is, ask the provider for a full-funding or threshold-funding recommendation. Most providers model several scenarios already. This is usually a request, not a new study.

Check the date. A study older than three years at the point of a lender's project approval is out, regardless of how good it is.

Then budget the number. The requirement is that the budget includes the allocation, not that the study recommends it. A study on the shelf changes nothing.

Expect to have to explain it. Moving from a baseline plan to the study's highest recommendation, on top of the fifteen percent floor arriving in January, can be a substantial assessment increase in one year. The honest framing is that it is the price of the units remaining financeable. Our North Dakota budget approval page covers how the increase gets adopted.

And it is now a disclosure item

Since August 1, 2025, N.D.C.C. § 47-10-02.3(2)(e) requires a North Dakota association to disclose on a resale “Whether the homeowners' association or condominium project uses a reserve study,” alongside the reserve and capital fund balances and the budgets. A buyer's lender is going to be looking at the study and the budget together. The statute makes sure both arrive.

What to watch next

Watch how North Dakota reserve study providers respond — the most likely outcome is that baseline scenarios stop being presented as recommendations at all. Watch, too, for the first North Dakota projects to discover the problem the hard way, which will be in January when the fifteen percent floor and the funding-method rule bite in the same loan file.