CFR > Title 34 - Education > SUBTITLE B—Regulations of the Offices of the Department of Education > CHAPTER II—OFFICE OF ELEMENTARY AND SECONDARY EDUCATION, DEPARTMENT OF EDUCATION (parts 200 to 299) > PART 225—CREDIT ENHANCEMENT FOR CHARTER SCHOOL FACILITIES PROGRAM > SUBPART C—What Conditions Must Be Met by a Grantee? (§225.20 to §225.21) > 225.21—What are some examples of impermissible uses of reserve account funds?

225.21—What are some examples of impermissible uses of reserve account funds?

(a) Grantees must not use reserve account funds to—
(1) Directly pay for a charter school's construction, renovation, repair, or acquisition; or
(2) Provide a down payment on facilities in order to secure loans for charter schools. A grantee may, however, use funds to guarantee a loan for the portion of the loan that would otherwise have to be funded with a down payment.
(b) In the event of a default of payment to lenders or contractors by a charter school whose loan or lease is guaranteed by reserve account funds, a grantee may use these funds to cover defaulted payments that are referenced under paragraph (a)(1) of this section.

Code of Federal Regulations

(Authority: 20 U.S.C. 7223d )