24 C.F.R. § 883.702
§ 883.702 Replacement reserve. (24 CFR Part 883)
Operative Text
For projects that are required to maintain a replacement reserve account to fund capital repairs and building system replacements, while the Annual Contributions Contract (ACC) between the State Agency and HUD is in effect, funds in that replacement reserve account may be drawn and used only in accordance with State Agency guidelines and with the approval of, or as directed by, the State Agency. Upon termination of the ACC, the Owner must request withdrawal of any funds in the replacement reserve account and immediately deposit such funds into an interest-bearing replacement reserve account that complies with the requirements of 24 CFR 880.602(a)(1)(iv).
Under 24 CFR Part 883 § 883.702, certain projects must maintain a dedicated reserve account to cover major capital repairs and system replacements. While the project operates under an Annual Contributions Contract (ACC) with HUD, the State Agency controls how and when those reserve funds can be accessed. Once the ACC ends, the project owner is required to move any remaining reserve funds into an interest-bearing account that meets separate HUD standards.
Plain English — not legal advice.
Operators subject to 24 CFR Part 883 § 883.702 generally maintain their replacement reserve accounts in strict compliance with State Agency guidelines, seeking approval before drawing any funds during the ACC period. Compliant owners also track the status of their ACC so they can act promptly upon its termination, transferring reserve balances into a qualifying interest-bearing account without delay. Keeping clear documentation of all reserve transactions and State Agency approvals is a standard practice for demonstrating compliance.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
24 CFR Part 883 § 883.702 establishes rules designed to ensure that funds meant for building upkeep and major repairs are properly maintained and not misused. If residents observe that capital repairs are being neglected or that reserve funds appear to be mismanaged, they may raise concerns with the relevant State Agency or local HUD field office. Tenant-rights organizations can help residents understand what oversight mechanisms exist and what general options are available for flagging potential violations.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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