24 C.F.R. § 891.145
§ 891.145 Owner deposit (Minimum Capital Investment). (24 CFR Part 891)
Operative Text
As a Minimum Capital Investment, the Owner must deposit in a special escrow account one-half of one percent (0.5%) of the HUD-approved capital advance, not to exceed $10,000, to assure the Owner's commitment to the housing. Under the Section 202 Program, if an Owner has a National Sponsor or a National Co-Sponsor, the Minimum Capital Investment shall be one-half of one percent (0.5%) of the HUD-approved capital advance, not to exceed $25,000.
Under 24 CFR Part 891 § 891.145, owners receiving a HUD-approved capital advance for supportive housing must place a minimum deposit—equal to 0.5% of that capital advance—into a dedicated escrow account as a show of financial commitment to the project. This deposit is capped at $10,000 in most cases, but rises to a maximum of $25,000 under the Section 202 Program when a National Sponsor or National Co-Sponsor is involved. The rule functions as a financial stake requirement, ensuring that owners have skin in the game before HUD funds are disbursed.
Plain English — not legal advice.
Owners subject to 24 CFR Part 891 § 891.145 are generally expected to calculate 0.5% of their HUD-approved capital advance and deposit that amount into a designated escrow account before the project moves forward. Compliant operators confirm whether the standard $10,000 cap or the elevated $25,000 cap (applicable under Section 202 when a National or National Co-Sponsor is involved) governs their specific program structure. Keeping clear documentation of the escrow deposit and its alignment with the HUD-approved capital advance amount is a standard part of maintaining compliance with this provision.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
While 24 CFR Part 891 § 891.145 primarily governs the financial obligations of project owners rather than tenants directly, it reflects HUD's effort to ensure that owners of federally assisted supportive housing are genuinely committed to the project. Residents of housing developed under Section 202 or related programs can be aware that this escrow requirement is part of the oversight framework designed to protect the long-term viability of their housing. Tenants who have concerns about whether a project is being operated in accordance with HUD program requirements may contact HUD's local field office or reach out to a tenant-rights organization for general information.
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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