HOME Replacement Reserve Account Guidelines for Use
May 15, 2019
The replacement reserve account is established by the borrower(s) at the time of the HOME loan closing and must be maintained for the entire 20-year affordability period. AHFA has established specific requirements for the replacement reserve accounts to safeguard the availability of funds for capital needs as the project will require for maintaining a viable project throughout the 20-year affordability period.
No withdrawals may be requested within the first 60 months after the AHFA HOME loan has closed.
A request for withdrawal will be approved or denied by written notification to the owner or management company within 30 days of receipt of the request.
A request for withdrawal may not be made more than 120 days after the paid invoice date.
A single withdrawal may not draw the reserve balance below a balance equal to 12 months of reserve deposits as specified in the HOME Commitment / HOME Written Agreement.
If the request exceeds $5,000, a mandatory inspection will be done prior to the release of funds.
The owner shall make all requests using the AHFA Replacement Reserve Withdrawal Request Form. The management company may prepare the form, but the form must contain the owner’s original signature to be considered a complete form.
At least two bids must be provided for all materials and/or work performed, excluding the purchase of household appliances.
Documentation regarding a collected or uncollected security deposit from any tenant will need to be provided with any request that maintains tenant responsibility.
If any withdrawals from the account are found to be incomplete, inadequate, or excessive, the owner will be required to reimburse the reserve account.