Is Your HOA Running Out of Money? How to Read HOA Reserves

Right now the average HOA in Santa Clara County runs just over $600 a month, based on what I’m seeing as of November 2026. And that $600 often doesn’t buy a pool or a gym. Sometimes it’s parking, a master insurance policy, and the exterior. That’s it.

I’m third-generation South Bay. I grew up in Almaden, went to Leland High School, and my family was here before anyone called it Silicon Valley. I also live in an HOA myself. So when my livestream filled up with HOA questions, I wanted to lay out how to read HOA reserves, why dues keep climbing, and when buying into an HOA still makes sense.

I walked through this on camera:

Why are HOA dues going up in Santa Clara County?

The biggest driver is insurance. Premiums have climbed across California, and HOAs pass that cost straight to owners through dues. Some of it is wildfire losses. Some of it is that a lot of boards renew with the same carrier every year and never shop it. I covered the insurance side for houses in my post on the forces repricing Silicon Valley home values. Condos feel it through the master policy.

Here’s a real example. I know of a 13-unit complex in Palm Springs. It’s out of our area, but the math is the same anywhere in California. Someone there finally shopped the insurance and cut the premium by $13,000 a year.

One 13-unit complex, as of fall 2026

Item	Before	After
Master insurance premium	$37,000 a year	$24,000 a year
Insurance cost per unit	About $2,850 a year	About $1,850 a year
Savings per unit		About $1,000 a year
Monthly HOA dues	About $700 (four years earlier)	About $1,400 (fall 2026)

And that $24,000 only covers the walls out. It doesn’t pay for the grounds, the water, the pool, or a roof that starts leaking. Every one of those still comes out of dues or reserves.

What does a $600 HOA do to a condo buyer’s payment?

Condos and townhomes are still the entry point for most first-time buyers here. The San Jose condo median I’ve been tracking was about $630,000 in early November 2026, down from over $675,000 three months earlier. Here’s what that looks like with 10% down.

$630,000 condo with 10% down, as of November 2026

Piece of the payment	Monthly	Notes
Principal and interest	$3,772	$567,000 loan at 7%, 30-year fixed
All-in payment before HOA	Over $4,500	Adds property tax, insurance, and mortgage insurance (my estimate)
HOA dues	About $600	County average I’m seeing, Nov 2026
All-in with HOA	Over $5,100	$7,200 a year in dues alone

That extra $600 is a big reason condo values have slipped. On the condos I watch, prices are down about 17% over the past year. MLSListings data for September 2026 showed the county condo and townhome median at $850,000, down 10.5% from a year earlier. Different measures, same direction. If you’re weighing rates on top of this, my post on buying a home at 7 percent walks through the payment math.

I’ve had owners who bought condos a couple of years ago call me after checking their value. They’re worried about ending up underwater. The honest answer is that the HOA’s finances are now part of the price.

How are the new lending rules changing condo sales?

Fannie Mae and Freddie Mac have tightened how lenders review condo projects. The HOA’s paperwork now goes into the loan file, and underwriters read the budget, the reserves, the insurance, and any big repairs coming up.

If the project doesn’t qualify, the buyer may get pushed to a non-QM loan. As of November 2026, that can mean going from about 7% to 7.5% up to 8.5%, 9%, or even 9.5%. Fewer buyers can qualify, so demand drops further.

That splits the condo market in two:

• Healthy HOAs: lenders approve them, more buyers can finance, and the units sell. Good financials put a premium on the home.
• Struggling HOAs: mostly cash buyers and investors buying rentals. Those units sit longer and sell for less.

How to read HOA reserves before you buy

Reserves are the HOA’s savings for big, predictable repairs like roofs, paint, fences, and paving. Percent funded compares the cash in that account to what the reserve study says should be there today. California requires a board to have a reserve study inspection done at least every three years and reviewed every year under Civil Code 5550. Ask for the latest one.

My rule of thumb, as of November 2026

Percent funded	What I’d do
Over 60%	I’d be comfortable moving forward, after a normal read of the budget and minutes.
50% to 60%	Read the reserve study closely. Find out which big items are due in the next five years.
Under 50%	Dig into where the money went. Recent roofs or paint can explain it. Nothing done in decades is a warning sign.

Check what was recently repaired

Low funding isn’t always bad. If the HOA redid the roofs, fences, or paint in the last few years, the account should be lower. That money was spent well. If the roofs haven’t been touched in 30 or 40 years and the reserves are only half funded, the money may not be there when they come due. That’s when a special assessment shows up.

Ask about the SB 326 balcony inspections

Under SB 326, condo associations had to have a licensed structural engineer or architect inspect balconies, decks, and other exterior elevated elements. The first inspection was due by January 1, 2025, and it repeats every nine years. A lot of complexes found repairs and paid for them out of reserves. Ask what the inspection found and how the repairs were funded.

Read the minutes

The minutes tell you what the budget doesn’t. If you see leak repair after leak repair, the roofs are probably close to replacement. If you see owners arguing with the board, I want to know that before I move in.

Know the limits on dues and assessments

The California DRE’s guide, Living in a California Common Interest Development, sums up the rules. Without owner approval, a board can’t raise regular assessments more than 20% in a year, and special assessments can’t total more than 5% of budgeted gross expenses in a year. Emergencies, like a court order or certain urgent repairs, are exceptions.

Is buying into an HOA still worth it?

Yes, if you get the right price and go in with both eyes open. An HOA takes a lot off your plate, especially if you’ve never owned before.

HOA versus owner responsibilities (check your CC&Rs)

What the HOA usually handles	What stays on you
Roof, exterior paint, and siding	Everything inside the walls
Yard work and common areas	Appliances, plumbing fixtures, and finishes
Pest control for common areas	Your own unit insurance policy
Master insurance policy	Following the rules on paint colors and changes

It’s a good way to start building equity and learn what owning takes, before you take on a whole yard, a roof, and a foundation. The tradeoff is control. In a detached house you can paint it any color you want. In an HOA, the board decides.

What I’d do

If you own in an HOA

• Go to the meetings. You don’t really know how a complex is run until you sit in on them. If you can, run for the board.
• Ask the board to shop the insurance every year. The 13-unit example above saved about $1,000 per unit by asking around.
• Read the reserve study and the budget when they come out. A board that’s running the HOA into the ground shows up in the numbers first.

If you’re buying

• Ask for the reserve study, the budget, two years of minutes, the master insurance policy, and the SB 326 report before you remove contingencies.
• Ask your lender early whether the project qualifies for conventional financing.
• Price in the dues. At $600 a month, that’s $7,200 a year that never builds equity.

If you’re selling a condo or townhome

Condo pricing moves fast right now. A price that’s right on day one can be too high two weeks later. I recently had a condo listed at $650,000 while the median was dropping three months straight. I showed my sellers the trend, adjusted the price early, and the home went into contract.

Two things I use: a private listing that tests your price inside the brokerage network before the home goes live on the MLS, so there’s no days-on-market history. And buyer search data. I check every day how many buyers have searches saved between $600,000 and $650,000, $650,000 and $700,000, and $700,000 and $800,000, so I know which band your home belongs in. For more on private and off-market sales, see my recap of the cheapest homes sold in Santa Clara County.

FAQ

What is a good percent funded for an HOA?

Percent funded compares the cash in the reserve account to what the reserve study says should be there today. I’m comfortable above about 60%. Under 50%, I read the reserve study, the budget, and the minutes to find out why before I’d write an offer.

How much are HOA fees in Santa Clara County?

As of November 2026, the average HOA I’m seeing in Santa Clara County runs just over $600 a month. That’s the base. Complexes with a pool, gym, or high-rise amenities usually cost more, and plenty of $600 HOAs cover little beyond the exterior and insurance.

Can an HOA raise dues whenever it wants in California?

No. Under the Civil Code sections summarized in the California DRE’s guide, a board can’t raise regular assessments more than 20% in a year, or levy special assessments above 5% of budgeted gross expenses in a year, without owner approval. There are exceptions for emergencies like court orders and certain urgent repairs.

What is SB 326 and why does it matter to condo buyers?

SB 326 requires condo associations to have a licensed structural engineer or architect inspect balconies, decks, and other exterior elevated elements. The first inspection was due by January 1, 2025, then every nine years. Many complexes paid for repairs out of reserves, so ask what was found and how it was paid for.

Can I get a regular loan on a condo with a weak HOA?

Maybe not. Lenders now review the HOA’s budget, reserves, insurance, and planned repairs with the loan file. If the project doesn’t qualify, buyers can get pushed to a non-QM loan, which I’ve seen priced around 8.5% to 9.5% as of November 2026 versus about 7% to 7.5% for a conventional loan.

Does HOA insurance cover the inside of my unit?

Usually not. The master policy on most condos and townhomes covers the walls out. You insure the inside of your unit with your own policy, so check the CC&Rs and the master policy before you close.

Keep reading

• Best Neighborhoods to Buy in San Jose at $1M, $2M, and $3M: where townhomes still make sense at the first tier.
• Will There Be a San Jose Housing Crash?: what 45 years of downturns say about holding through a dip.
• 5 Costly Mistakes Homebuyers Make: the buyer mistakes I see most often.
• Cheapest Homes Sold in Santa Clara County in October 2026: what sold at both ends of the market.

Numbers are as of the month shown and come from my own market tracking, MLSListings data, and the example in the video. HOA dues, reserves, and loan pricing vary by complex and lender. Verify any figure before relying on it. This is general information, not legal or tax advice. Check the governing documents and talk to a lender, attorney, or tax professional about your situation.