[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR811.108]



[Page 40-41]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 

 

PART 811_TAX EXEMPTION OF OBLIGATIONS OF PUBLIC HOUSING AGENCIES AND 

RELATED AMENDMENTS--Table of Contents

 

Sec.  811.108  Debt service reserve.



    (a) FHA-Insured projects. (1) The debt service reserve shall be 

invested and the income used to pay principal and interest on that 

portion of the obligations which is attributable to the funding of the 

debt service reserve. Any excess investment income shall be added to the 

debt service reserve. In the event such investment income is 

insufficient, surplus cash or residual receipts, to the extent approved 

by the field office, may be used to pay such principal and interest 

costs.



[[Page 41]]



    (2) The debt service reserve and its investment income shall be 

available only for the purpose of paying principal or interest on the 

obligations. The use of the debt service reserve for this purpose shall 

not be a cure for any failure by the owner to make required payments.

    (3) Upon full payment of the principal and interest on the 

obligations (including that portion of the obligations attributable to 

the funding of the debt service reserve), any funds remaining in the 

debt service reserve shall be remitted to HUD.

    (b) Non-FHA-insured projects. (1) Investment income from the debt 

service reserve, up to the amount required for debt service on the bonds 

attributable to the debt service reserve, shall be credited toward the 

owner's debt service payment. Any excess investment income shall be 

added to and become part of the debt service reserve.

    (2) The debt service reserve and investment income thereon shall be 

available only for the purpose of paying principal or interest on the 

obligations. The use of the debt service reserve for this purpose shall 

not be a cure for any failure by the owner to make required payments.

    (3) Upon full payment of the principal and interest on the 

obligations (including that portion of the obligations attributable to 

the funding of the debt service reserve), any funds remaining in the 

debt service reserve shall be remitted to HUD.



[61 FR 14461, Apr. 1, 1996]