Cal. Civ. Code § 380.205
Reserve Fund
Operative Text
a)�������� Each Agency shall establish a Reserve Fund in an interest-bearing account from the Annual Receipts or Fund Distribution, as applicable, to offset decreases in funding caused by periodic fluctuation in Annual Receipts, to maintain continuity in funding when Commitments expire, and to phase out Rental Assistance lost by a shift in any Geographic Area's proportionate Fund Distribution as a result of a new decennial census.� Municipalities may delegate the responsibility to establish a Reserve Fund to their designated LAAs. b)�������� The amount to fund the Reserve Fund for the Authority shall be a maximum of 5% of the amount of each year's Annual Receipts after subtracting the Authority's administrative fee and the Fund Distributions to Municipalities.� The amount of each Municipality's Reserve Fund shall be a maximum of 5% of the Municipality's Fund Distribution.� Each Reserve Fund shall also include income derived from investing funds in the Reserve Fund and funds received from LAAs that did not use the entire amount of their Allocations.
Section 380.205 of 47 Ill. Admin. Code pt. 380 requires each participating Agency to maintain a dedicated Reserve Fund held in an interest-bearing account. The fund is designed to smooth out fluctuations in annual funding, bridge gaps when existing commitments expire, and cushion the loss of rental assistance that can result from shifts in geographic funding shares following a new decennial census. For the statewide Authority, the fund is capped at 5% of annual receipts (after deducting administrative fees and municipal distributions), while each Municipality's reserve is capped at 5% of its own fund distribution; both funds also accumulate investment income and any unspent allocations returned by local administering agencies.
Plain English — not legal advice.
Property owners and managers participating in Illinois rental assistance programs administered under Section 380.205 should be aware that the agencies overseeing their contracts are required to maintain Reserve Funds, which helps ensure continuity of rental assistance payments even when funding cycles shift or commitments expire. A compliant agency keeps its reserve within the 5% cap and properly accounts for interest earnings and returned allocation funds. Understanding this structure can help operators anticipate how funding gaps might be managed during census-driven redistribution periods or at the end of a program commitment cycle.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 380.205 establishes a financial safety net within the rental assistance program, meaning that the agency administering your assistance is required to hold reserve funds specifically to prevent interruptions in payments during funding fluctuations or program transitions. If you receive rental assistance and are concerned about a disruption tied to a funding cycle change or a geographic redistribution following a census, this provision is the regulatory basis for continuity protections built into the program. Tenants can contact their local administering agency or a tenant-rights organization to learn more about how the Reserve Fund requirements may apply to their assistance program.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 18, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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