What does percent funded mean, and what number is good?
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Percent funded compares reserve cash with a calculated reserve need at a point in time. It is a ratio, not a universal grade, and Fannie Mae's current Full Review rules do not publish weak, fair, strong, or passing percent-funded bands.
What is the ratio?
California's current statutory disclosure provides a concrete primary-source example: Civil Code 5565 compares accumulated reserve cash with the calculated cash-reserve need, and section 5570 reports the result as “percent funded.” Section 5570 also states the component calculation behind its required amount and permits disclosure of an alternate generally accepted calculation.
That means the percentage is only interpretable with its date, reserve balance, required-balance calculation, and method. A changed cost, useful life, balance date, or calculation basis can change the ratio.
What number is good?
No universal grading band is published here because no current primary source reviewed for this pass supports one. Fannie Mae's Full Review instead tests the budget reserve allocation and the conditions for any reserve-study substitution. It does not use a percent-funded score as a standalone pass/fail rule.
Use the number as a study-specific planning indicator. Study Check can identify the value, its basis, and visible gaps; it cannot turn the ratio into a lender decision or universal adequacy grade.
Sources
- California Civil Code 5565, operative January 1, 2014 — reserve summary amounts and percentage.
- California Civil Code 5570, effective January 1, 2017 — statutory disclosure and calculation method.
- Fannie Mae Selling Guide B4-2.2-01, Full Review Process, version August 5, 2026 — budget test and reserve-study substitution.
Primary sources accessed September 11, 2026.