Replacement Escrow for CHFA-financed Properties
Who can apply to utilize Reserve Escrow funds?
CHFA-financed housing developments that have been
occupied for at least five years are eligible to apply for
reimbursements from their Reserve Escrows. HUD-insured
developments are required to follow HUD policies and
procedures pertaining to escrow disbursements.
How do you apply to utilize
Reserve Escrow funds?
CHFA requires Owners and Management Agents to submit a
request to their Asset Manager to withdraw funds from their
development’s CHFA-held reserve escrows. Substantial
advances require pre-approval.
- Pre-approval is required for substantial
Owners and Management Agents must obtain pre-approval
for an escrow withdrawal for a purchase or contract that exceeds $10,000. Requests
for pre-approval are submitted on
CHFA form HM 6-21 –
Escrow Release Pre-Approval (see Escrow Disbursement
Forms Workbook) as a cover sheet, and must
be accompanied by the following supporting
Three comparable quotations from third-party contractors
A statement of need
- A detailed description of work needed to be performed
- An anticipated time schedule for completion
- Owner/Agent Signature
Requests for pre-approval are submitted by fax, email
or by US Mail to a development’s Asset Manager.
- A formal request is required before CHFA
releases funds from escrow.
Owners and Management Agents must submit a request to
release funds from their development’s escrow reserves,
regardless of the sum being requested. These requests
are submitted on form CHFA – HM-6-24 – Request to Release
Escrow Funds (see Escrow Disbursement Forms Workbook.) Developments are limited to one withdrawal per
quarter from their escrows in a calendar year. CHFA may
deny or reduce a request if the funds in escrow are
Requests to release escrow funds are submitted by fax,
email or by US Mail to CHFA's Finance Department.
Asset Management Escrow Disbursement Policy, for
more details on the request for reimbursement process.)
What improvements and repairs are eligible for an escrow
Generally, a development is allowed to withdraw funds for
expenditures related to non-routine major repairs or
replacements. See form
CHFA form HM 6-22 – Replacement
Reserve Descriptive Codes (see Escrow Disbursement Forms
Workbook) for a list of eligible
CHFA has the discretion to make exceptions to this
general rule on a case by case basis.
What else should you know about Reserve Escrow funds?
The following additional considerations apply to Reserve
- A capital needs assessment or study may be
To assess the long-term capital needs of a development,
CHFA may require the owner to commission a capital needs
assessment from a qualified independent inspection firm,
which is payable from a development’s operating budget.
- HUD approval may be required.
HUD-insured developments must obtain pre-approval from
HUD for any escrow reimbursements. However, CHFA
approval is also required. If CHFA is your Contract Administrator,
CHFA verifies all work and expenditures and notifies HUD
of any discrepancies.
Questions? Contact CHFA.
Housing developments with questions about Reserve for
Replacement Escrow reimbursements should contact their
Connecticut Housing Finance Authority
Attn: [Your Asset Manager]
999 West Street
Rocky Hill, Connecticut 06067
The following documents are related to Reserve Escrow funds
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|Capital Improvement Schedule|
This workbook is used by developments with CHFA Multifamily Mortgages to project their Capital Improvements on a yearly basis.
|Capital Improvement Guide|
This document augments CHFA's 2015 Multifamily Design, Construction and Sustainability Standards, and includes suggested related issues and conditions to be examined when planning various capital improvement/replacement/repair projects in 2015.
|Capital Improvement Project Classifications|
CHFA's Construction Guidelines: Technical Services/Asset Management (TSAM) Capital Improvement Project Review is used to determine the Classification Code for repairs/replacements/installations of items as part of the Escrow Disbursement Policy
|Escrow Disbursement Forms Workbook|
This workbook contains all the Escrow Disbursement Forms that are needed for an escrow disbursement. In addition, it also includes worksheets listing the CHFA Classifications and the Descriptive Codes.
|CHFA Escrow Disbursement Policy|
This summary outlines the approval policy by which a development obtains authorization from CHFA for an escrow disbursement. It also details the disbursement request process.
|Escrow Reserve Policy Training Presentation|
This Powerpoint Presentation is to assist you in the Escrow Reserve Policy Procedures.
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