This post explains how lenders calculate post-closing reserve requirements under conventional (conforming) guidelines, and how FHA, VA, jumbo, and Non-QM programs differ. Reserve rules vary by lender overlay, so figures here reflect agency minimums — always confirm current requirements with your loan officer before making financial plans.

What “reserves” actually means

When underwriters talk about reserves, they’re not talking about your down payment or closing costs — those are separate. Reserves are the liquid assets you’d have left after your loan closes: money in the bank that could cover your mortgage payment if your income disappeared tomorrow. [Read more…]