Current through Register Vol. 50, No. 25, December 15, 2023
A. Loans shall be made on terms conforming to
the requirements in §§B-K of this regulation.
B. Interest Rate.
(1) The interest rate to be paid on loans may
be at preferred rates set by the Department from time to time, as required by
the Act.
(2) The collective
interest rate charged on all loans shall be at least sufficient to cover
administrative costs of the program and reasonably expected losses due to
defaults.
(3) The Department may
establish different interest rates available on loans serving occupants who are
families of:
(a) Limited income;
(b) Lower income; and
(c) Very low income.
(4) The interest rates charged on loans may
not be more than private lending rates for comparable loans.
(5) Within the limits established in
§§B(3) and (4), above, the interest rate shall be the maximum
interest rate based on an applicant's ability to repay.
C. Term. The term of each loan may not exceed
30 years from completion of construction, and shall be based on the amount of
the loan, the expected life of the rehabilitated building, and an applicant's
ability to repay.
D. Maximum Loan
Amount.
(1) The maximum loan may not exceed an
amount which, when added to any prior debts secured by or relating to the
eligible building or property, or both, would equal 110 percent of the market
value of the eligible building and property after rehabilitation as determined
by the Department or the local administrator.
(2) For projects when 100 percent of the
units are subject to a federal rent subsidy which is allocated to the project
for the entire term of the loan, the 110 percent loan-to-value ratio
requirement of §D(1), above, may be raised to 115 percent.
(3) If, in the determination of the Program
Director, a loan increase is necessary to assure completion of the building and
protect the Department's interest, an increase in the mortgage may be made to
cover extraordinary and unforeseen construction problems provided the increase
can be made within the limits on maximum loan amounts set forth in
§D(1)-(2) of this regulation.
(4) Closing costs may be included in loans on
owner-occupied dwellings, provided the loan does not exceed the limits on the
maximum loan amount set forth in §D(1)-(2) of this regulation.
E. Payments. Payments shall be
applied to escrow expenses, when applicable, interest, and principal, in that
order.
F. Late Charge. Late
charges, as permitted by law, may be charged.
G. Security for Loans.
(1) Loans of $5,000 or less shall be
evidenced by a promissory note and such other documents as may be required by
the Department.
(2) Except as
provided in §G(3)-(4) of this regulation, loans in excess of $5,000 and
loans providing for deferred payments shall be secured by a mortgage or deed of
trust, in the form required by the Department, which shall be recorded in the
land records of the county in which the property is located.
(3) A loan to a trust described in 42 U.S.C
§ 1396P(D)(4), may be secured by a mortgage or deed of trust on real
property, or other security device acceptable to the Department.
(4) A loan in excess of $5,000 to a borrower
in a housing cooperative unit may be secured by another security device
acceptable to the Department.
H. Default. Remedies upon loan default shall
be exercised in the discretion of the Department and may be one or more of the
remedies provided for in the loan documents or by law, such as:
(1) Adjustments to the interest rate of the
loan upward or downward;
(2)
Suspension or debarment from the Department's programs;
(3) Foreclosure;
(4) Accepting a deed instead of
foreclosure;
(5) Appointment of a
receiver; and
(6) Other legal
action which protects the Department's interests.
I. Change of Ownership. A borrower may not
sell, cease to own, assign, transfer, dispose of, or lease all or any part of
the property except for residential leases of not more than 3 years duration,
during the loan term, without the prior written consent of the Department,
except as permitted by federal law.
J. Refinancing. The Department may not
refinance existing debts related to an eligible building.
K. Land Installment Contracts. Purchases
under a land installment contract are not eligible for a loan.
Regulations .06 amended
effective February 11, 1985 (12:3 Md. R. 243)
Regulations .06A
amended effective September 5, 1980 (7:18 Md. R. 1737)
Regulations
.06A, amended effective June 16, 1978 (5:12 Md. R. 965)
Regulations
.06A, amended effective March 23, 1979 (6:6 Md. R. 509)
Regulations
.06A, B, amended effective October 5, 1979 (6:20 Md. R. 1627)
Regulations .06 adopted effective July 22, 1991 (18:14 Md. R. 1609)
Regulations .06 amended effective November 9, 1992 (19:22 Md. R.
1986); amended effective
43:13
Md. R. 712, eff. 7/4/2016
