[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR891.405]

[Page 190]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 
 
PART 891--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS WITH DISABILITIES--Table of Contents
 
                      Subpart D--Project Management
 
Sec. 891.405  Replacement reserve.

    (a) Establishment of reserve. The Owner shall establish and maintain 
a replacement reserve to aid in funding extraordinary maintenance and 
repair and replacement of capital items.
    (b) Deposits to reserve. The Owner shall make monthly deposits to 
the replacement reserve in an amount determined by HUD.
    (c) Level of reserve. The reserve must be built up to and maintained 
at a level determined by HUD to be sufficient to meet projected 
requirements. Should the reserve reach that level, the amount of the 
deposit to the reserve may be reduced with the approval of HUD.
    (d) Administration of reserve. Replacement reserve funds must be 
deposited with HUD or in a Federally-insured depository in an interest-
bearing account(s) whose balances(s) are fully insured at all times. All 
earnings including interest on the reserve must be added to the reserve. 
Funds may be drawn from the reserve and used only in accordance with HUD 
guidelines and with the approval of, or as directed by, HUD.