[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: 24CFR891.405]



[Page 190-191]

 

                 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. With HUD 

approval, reserves may be used to reduce the number of



[[Page 191]]



dwelling units, provided that the purpose for the reduction is the 

retrofitting of obsolete or unmarketable units.



[61 FR 11956, Mar. 22, 1996, as amended at 68 FR 67321, Dec. 1, 2003]