If the Fund balance exceeds $2,000,000, what happens to the excess funds?

When the Fund balance exceeds $2,000,000, the correct action is to transfer the excess funds to the Virginia Housing Partnership Fund. This provision ensures that any surplus in the Fund is used for broader housing initiatives, helping to support programs that aim to improve availability and affordability of housing across Virginia. This transfer reflects a commitment to reinvesting surplus funds into beneficial housing projects rather than allowing the excess to remain idle.

In contrast, while other options may seem plausible, they do not align with the established practices regarding the handling of surplus funds in this context. For instance, opening a new overflow account would not effectively utilize the funds in a way that supports public housing initiatives. Similarly, reducing assessments for new licensees or issuing prorated refunds to licensees would not only undermine the purpose of maintaining the Fund but could also hinder future funding for essential housing programs.