What Are Mortgage Reserves, and How Much Will You Need?

Short answer: Mortgage reserves are savings you have left over after closing — money that isn’t spent on the down payment or closing costs, sitting in your accounts as proof you could keep making payments if something disrupted your cash flow. Under Community Mortgage, reserve requirements generally range from 6 to 9 months of your mortgage payment, depending on your credit tier, and the underlying assets need to be sourced and seasoned for 30 days.

Why lenders ask for this at all

Without a calculated income figure to point to, reserves become one of the ways a loan demonstrates staying power. Think of it less as “extra money the lender is taking” and more as proof already sitting in your own accounts — reserves aren’t handed over to anyone, they just need to be there and documented.

What counts as reserves

Generally: checking and savings balances, and other liquid or near-liquid assets. The specific documentation requirement is that funds be sourced (you can show where the money came from) and seasoned (it’s been sitting in your account for at least 30 days, not dropped in the week before closing).

How much is “6 to 9 months,” really

Reserves are calculated against your total monthly housing payment, not just principal and interest. So if your estimated payment is $9,000/month, a 6-month reserve requirement means roughly $54,000 sitting in your accounts after your down payment and closing costs are covered — not spent, just present.

Stronger credit tiers generally come with the shorter, 6-month reserve requirement; more conservative credit tiers may require the full 9 months.

Plan around your real number

Use the calculator to see your specific estimated reserve requirement based on home price, credit tier, and interest rate — it’s calculated using the same tiers underwriting actually uses, not a rough guess.