A reserve fund is a fund held to cover future possible maintenance, repairs, or unexpected expenses of business operations or a multi-unit housing development (often condominiums or a housing cooperative). The fund is often very liquid, and is controlled by management or, in the case of multi-unit housing development the homeowners’ association (HOA). Businesses will often set aside a portion of revenue, or in the case of HOAs a portion of the HOA fees, at specific time intervals (e.g. monthly) to ensure that the reserve fund has enough assets.
[Last updated in April of 2021 by the Wex Definitions Team]