[Code of Federal Regulations]

[Title 34, Volume 1]

[Revised as of July 1, 2006]

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

[CITE: 34CFR225.21]



[Page 562]

 

                           TITLE 34--EDUCATION

 

                  CHAPTER II--OFFICE OF ELEMENTARY AND

              SECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 225_CREDIT ENHANCEMENT FOR CHARTER SCHOOL FACILITIES PROGRAM--Table 

of Contents

 

           Subpart C_What Conditions Must Be Met by a Grantee?

 

Sec.  225.21  What are some examples of impermissible uses of reserve 

account funds?



    (a) Grantees must not use reserve account funds to--

    (1) Directly pay for a charter school's construction, renovation, 

repair, or acquisition; or

    (2) Provide a down payment on facilities in order to secure loans 

for charter schools. A grantee may, however, use funds to guarantee a 

loan for the portion of the loan that would otherwise have to be funded 

with a down payment.

    (b) In the event of a default of payment to lenders or contractors 

by a charter school whose loan or lease is guaranteed by reserve account 

funds, a grantee may use these funds to cover defaulted payments that 

are referenced under paragraph (a)(1) of this section.



(Authority: 20 U.S.C. 7223d)