FHA Condo Approval Specialist: Can We Use Reserve Funds for Landscaping During Drought?

Can We Use Reserve Funds for Landscaping During Drought?

Can We Use Reserve Funds for Landscaping During Drought?

fha condo approval reservesWe receive a lot of questions from associations on how they are able to use their reserve funds and still be eligible for FHA condominium project approval.  Up in our neck of the woods in New England, these questions are primarily geared towards excessive costs due to storms, especially during the winter.  This past winter was particularly annoying with bitter cold and high snowfall totals.  Many, if not all, associations ran over-budget due to the storms.  You can read more about that topic HERE.

Currently, California is suffering a severe drought and questions are flowing in regarding use of the reserve funds to cover the costs of maintaining an aesthetic environment and to replace burned out lawns.

Association Reserves, one of the largest reserve study providers in the country, published a very comprehensive article that details the circumstances by which reserve funds can be used during times of extreme drought.  The article is thorough we chose to merely provide the link rather than to attempt to summarize it here.

From an FHA condominium project approval standpoint, a severe drought is an exceptional circumstance that is beyond the control of the association.  If budget overruns do occur, they must be explained and there is a great chance that FHA will ask for previous years financials to demonstrate that the association does not consistently operate at a loss.

We have assisted many association to get certified with FHA that have posted such losses due to rare circumstances such as this.  FHA understands that associations work to budget for common, predictable expenses so such overruns can occur from time-to-time...so long as they don’t occur every year. 

Top Photo Credit: tiverylucky/freedigitalphotos.net

The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA.  We have assisted nearly 200 condominiums and we can help your association.


ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.


Please contact us with any questions regarding FHA or VA condominium project approvals.  You can email me at askeric@readysetloan.com or call me at 404-433-4565. I will be happy to answer any of your questions.


FHA/VA Condo Approval Specialist

404-433-4565 Cell Phone

860-644-3772 Fax Phone

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 Check out our article in Common Interest magazine on page 19!

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Comment balloon 5 commentsReadySetLoan Condo Approval Team • July 28 2015 09:20AM


Eric- I'm not familiar with but it makes sense to me that associations need to hire a professional for questions like this

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) almost 4 years ago

Eric - It is an interesting concept to use reserve funds for landscaping during drought.

Posted by John Pusa, Your All Time Realtor With Exceptional Service (Berkshire Hathaway Home Services Crest) almost 4 years ago

Eric, you teach us so much. Thank you for always sharing something new for us to digest.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) almost 4 years ago

Eric I was not aware of that, so now I have another piece of information I can share.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 4 years ago

Eric - that is a very interesting question.  My concern would be whether the landscaping would be sustainable during the drought.  Fixing something that will break again might be considered a waste of reserves.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) almost 4 years ago