[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR904.108]

[Page 318]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 904_LOW RENT HOUSING HOMEOWNERSHIP OPPORTUNITIES--Table of Contents
 
                Subpart B_Turnkey III Program Description
 
Sec. 904.108  Break-even amount.

    (a) Definition. The term ``break-even amount'' as used herein means 
the minimum average monthly amount required to provide funds for the 
items listed in the illustration below. A separate break-even amount 
shall be established for each size and type of dwelling unit, as well as 
for the Project as a whole. The break-even amount for EHPA and NRMR will 
vary by size and type of dwelling unit; similar variations as to other 
line items may be made if the LHA deems this equitable.

    Illustration. The following is an illustration of the computation of 
the break-even amount based upon hypothetical amounts.

(1) Operating Expense (see Sec. 904.109):
  Administration.......................................   $8.50
  Homebuyer services...................................    2.00
  Project supplied utilities...........................    3.00
  Routine maintenance--common property.................    3.00
  Protective services..................................    2.00
  General expense......................................    6.50
  Nonroutine maintenance--common property (Contribution    2.00   $27.00
   to operating reserve)...............................
(2) Earned Home Payments Account (see Sec. 904.110)..  ......    12.00
(3) Nonroutine Maintenance Reserve (see Sec. 904.111)  ......     7.50
Break-Even Amount......................................  ......    46.50



The break-even amount does not include the monthly allowance for 
utilities which the homebuyer pays for directly, nor does it include any 
amount for debt service on the Project notes.

    (b) Excess over break-even. When the homebuyer's required monthly 
payment (see Sec. 904.107(j)) exceeds the applicable break-even amount, 
the excess shall constitute additional Proj ect income and shall be 
deposited and used in the same manner as other Proj ect income.
    (c) Deficit in monthly payment. When the homebuyer's required 
monthly payment is less than the applicable break-even amount, the 
deficit shall be applied as a reduction of that portion of the monthly 
payment designated for operating expense (i. e., as a reduction of 
Project income). In all such cases, the EHPA and the NRMR shall be 
credited with the amount included in the break-even amount for these 
accounts.