34 CFR § 225.21 - What are some examples of impermissible uses of reserve account funds?
---
identifier: "/us/cfr/t34/s225.21"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "34 CFR § 225.21 - What are some examples of impermissible uses of reserve account funds?"
title_number: 34
title_name: "Education"
section_number: "225.21"
section_name: "What are some examples of impermissible uses of reserve account funds?"
chapter_name: "OFFICE OF ELEMENTARY AND SECONDARY EDUCATION, DEPARTMENT OF EDUCATION"
part_number: "225"
part_name: "CREDIT ENHANCEMENT FOR CHARTER SCHOOL FACILITIES PROGRAM"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "20 U.S.C. 1221e-3, 1232, and 7221c."
regulatory_source: "70 FR 15003, Mar. 24, 2005, unless otherwise noted."
cfr_part: "225"
---
# 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.
[70 FR 15003, Mar. 24, 2005, as amended at 84 FR 25998, June 5, 2019]