Indiana HOA reserve study requirements (2026)
No mandated study cycle; reserve fund required for condominiums by statute; NRSS 3-5 year study cycle recommended.
Quick facts
What the law actually requires
Indiana is one of a small number of states that requires condominium associations to maintain a replacement reserve fund by statute. Under Indiana Code §32-25-4-4, all assessments set by a condominium association must be established using generally accepted accounting principles and must include the establishment and maintenance of a replacement reserve fund for capital expenditures and for the repair or replacement of common areas and facilities.
The fund must be held in a separate, interest-bearing account with a bank or savings association authorized to conduct business in the county where the condominium is located, or invested in the same types of investments permitted for a political subdivision. Assessments contributed to the fund are exempt from Indiana adjusted gross income tax. Critically, however, the statute does not specify a funding formula, a target percent-funded level, or a required reserve study cycle.
Planned-community HOAs organized under the Indiana Homeowners Association Act (Ind. Code §32-25.5) are not subject to §32-25-4-4. Those communities may voluntarily fund reserves and commission reserve studies, but there is no statutory compulsion. In both contexts, lender underwriting guidelines from FHA, Fannie Mae, and Freddie Mac and the National Reserve Study Standards (NRSS) fill the gap left by the statute.
Because Indiana law mandates the fund but not the study, an NRSS-compliant Level I reserve study every 3-5 years is the practical mechanism most boards use to determine how much to contribute — and to demonstrate financial health to prospective buyers and lenders.
How Apex Reserve Studio handles Indiana
Apex Reserve Studio applies its Generic NRSS compliance jurisdiction to Indiana properties by default, producing an NRSS-standard reserve study deliverable with the percent-funded metric, a 30-year projection, and a three-tier funding plan (Recommended / Threshold / Baseline). The output documents the reserve funding level required to satisfy the IC §32-25-4-4 fund mandate and satisfies lender underwriting expectations.
Indiana does not yet have a dedicated state-module format, but the Generic NRSS output is accepted by Indiana HOA attorneys and lenders. A state-specific module can be added on request — email sales@apexreservestudio.com.
Built-in Indiana compliance.
Select Ind. Code §32-25-4-4 — mandatory condominium replacement reserve fund from the Compliance Jurisdiction dropdown and Apex's PDF builder produces the right disclosure format automatically. Engine math is identical across jurisdictions — only the deliverable changes.
Frequently asked questions — Indiana
Does Indiana require a reserve fund for condominiums?
Yes. Indiana Code §32-25-4-4 requires every condominium association to establish and maintain a replacement reserve fund for capital expenditures and common-area repairs, held in a separate interest-bearing account. No specific dollar amount or percent-funded level is mandated.
Does Indiana require a reserve study?
No. The statute requires the fund to exist but does not specify a study cycle or methodology. Most Indiana condo boards commission an NRSS-compliant Level I or II study every 3-5 years to determine the correct contribution amount and to satisfy lender requirements.
Are planned-community HOAs in Indiana required to have a reserve fund?
No. The mandatory reserve fund under IC §32-25-4-4 applies only to condominiums. HOAs governed by the Indiana Homeowners Association Act (IC §32-25.5) may choose to fund reserves but are not legally required to do so.
Do FHA and Fannie Mae require a reserve study in Indiana?
Indirectly, yes. FHA condo project approval and Fannie Mae / Freddie Mac project standards expect evidence of adequate reserves and often a recent reserve study, so maintaining an NRSS-compliant study keeps the community loan-eligible for its residents.