17.3.2 General Operating Reserve (GOR)

A. Cooperatives are required by the Regulatory Agreement, HUD-92466M with Rider incorporating cooperative requirements, to establish and maintain a GOR which is a percentage of the monthly carrying charges. The carrying charge is the sum of all project expenses, replacement reserve, taxes and debt service.

1. Requirements for the GOR are as follows:

   • The GOR is maintained by a monthly payment of 3% of the monthly carrying charges.

• When the GOR account reaches 15% of the annual carrying charges, the monthly rate may be reduced to 2%.

• When the GOR account reaches 25% of annual carrying charges, monthly accruals may be discontinued until the account is reduced below 25%.

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• Anytime the GOR falls below the 25% level, monthly payments to the account shall be resumed at a 2% to 3% rate, as noted above, until the 25% level is restored.

2. In addition to any Initial Deposit to replacement reserve, the Cooperative borrower may be required to make an Initial Deposit to the GOR in an amount equal to 15% but not to exceed 25% of the annual carrying fee. The Initial Funding of the GOR using this provision may be included in the cost of refinancing in an amount not to exceed the percentage amount of the annual carrying fee as determined by the Cooperative borrower and included in the project underwriting.