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1.04 What is a target balance?

The target balance is that point during the next fiscal year that your account will reach the total of two monthly escrow payments (cushion). This takes into consideration your required beginning balance, scheduled periodic payments and disbursements. Regulations allow a two-month cushion in an escrow account to cover unanticipated disbursements or disbursements made before the borrower’s payments are available in the account.

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1.04 What is a target balance?