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Escrow Reserves

Reserve for Replacement Escrow for CHFA-financed Properties

Overview

The Connecticut Housing Finance Authority (CHFA) oversees housing developments that were financed from CHFA funding sources.   Owners of housing developments with CHFA Multifamily Mortgages or other CHFA-administered financing must follow CHFA’s procedures for obtaining reimbursements from their Reserve for Replacement Escrows.   In general, withdrawals are subject to CHFA approval and must relate to eligible expenditures for capital improvements or repairs.  

Follow the links below for more information on the reimbursement procedures for Reserve for Replacement Escrows.  

 

 

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 withdrawals

    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 documentation:  

    • 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 insufficient.     
     
    Requests to release escrow funds are submitted by fax, email or by US Mail to CHFA's Finance Department. 
     

(See, CHFA Asset Management Escrow Disbursement Policy, for more details on the request for reimbursement process.)


 

What improvements and repairs are eligible for an escrow disbursement?

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 expenditures.  

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 Escrow funds.

  • A capital needs assessment or study may be required.   
    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 Asset Manager directly.  

Mailing Address:
Connecticut Housing Finance Authority
Attn: [Your Asset Manager]
999 West Street
Rocky Hill, Connecticut 06067


 

Additional Information

The following documents are related to Reserve Escrow funds
Related Documents Found: 6  matches     Displaying: 1 - 6 
FileSizeType
Capital Improvement Schedule
This workbook is used by developments with CHFA Multifamily Mortgages to project their Capital Improvements on a yearly basis.
90Kxls

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.
494Kpdf

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
235Kpdf

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.
396Kxls

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.
59Kpdf

Escrow Reserve Policy Training Presentation
This Powerpoint Presentation is to assist you in the Escrow Reserve Policy Procedures.
242Kppt
FileSizeType
Found: 6  matches     Displaying: 1 - 6