---
kind: "section"
citation: "24 C.F.R. § 891.835"
title: "24"
number: "891.835"
heading: "Eligible uses of project rental assistance."
url: "https://uscodex.org/cfr/24/891.835"
---

# §891.835. Eligible uses of project rental assistance.

- (a) Section [202](/cfr/24/202.md) or [811](/cfr/24/811.md) project rental assistance may be used to pay the necessary and reasonable operating costs, as defined in [24 CFR 891.105](/cfr/24/891.105.md) and approved by HUD, not met from project income and attributed to Section [202](/cfr/24/202.md) or [811](/cfr/24/811.md) supportive housing units. Operating cost standards under [24 CFR 891.150](/cfr/24/891.150.md) apply to developments under this part.
- (b) Section [202](/cfr/24/202.md) or [811](/cfr/24/811.md) project rental assistance may not be used to pay for:
  - (1) Debt service on construction or permanent financing, or any refinancing thereof, for any units in the development, including the 202 or 811 supportive housing units;
  - (2) Cash flow distributions to owners; or
  - (3) **Creation of reserves for non-202 or -811 units.**
- (c) HUD-approved operating costs attributable to common areas or to the development as a whole, such as groundskeeping costs and general administrative costs, may be paid from project rental assistance on a pro-rata basis according to the percentage of 202 or 811 supportive housing units as compared to the total number of units.

## Notes

### Source

Source: 70 FR 54210, Sept. 13, 2005, unless otherwise noted.

### Authority

Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f, 3535(d), and 8013.

### Source

Source: 61 FR 11956, Mar. 22, 1996, unless otherwise noted.