Md. Code Regs. 05.03.01.06

Current through Register Vol. 51, No. 24, December 2, 2024

Section 05.03.01.06 - Eligible Uses

A. The proceeds of a loan made to purchase an eligible residence may be used to pay for:

(1) The purchase price of the eligible residence; and

(2) Closing costs.

B. The proceeds of a loan made under Regulation .05A and B of this chapter to purchase and rehabilitate an eligible residence may be used to pay for:

(1) The purchase price of the eligible residence;

(2) Closing costs; plus

(3) Any of the following rehabilitation costs, which shall total $5,000 or more to be eligible for a loan under this regulation:

(a) The reasonable cost of correcting major structural defects,

(b) The reasonable cost of repairing or replacing plumbing, HVAC, or electrical systems,

(c) The reasonable cost of correcting any violations of local planning, zoning, or building codes, or other applicable laws,

(d) The reasonable costs of eliminating health and safety hazards including correcting or removing defective paint surfaces and lead-based paint problems; and

(e) The reasonable cost of demolition, construction, or lot consolidation as may be approved by the Program; and

(4) Any of the following costs:

(a) The reasonable cost of inspections performed in accordance with Regulation .08D of this chapter; and

(b) Other reasonable rehabilitation costs as may be approved by the Program, such as the cost of developer fees, cosmetic repairs, energy conservation improvements, accessibility modifications, or major appliances.

C. The proceeds of a loan made to refinance an eligible residence may be used to pay for:

(1) The payoff and release of the existing mortgage loan or loans, including:

(a) The remaining principal balance of the existing mortgage loan or loans, and

(b) Unpaid interest due on an existing mortgage loan or loans at the time the Program loan closes;

(2) The cost of buying out the equity interest of a co-owner;

(3) Any of the following fees, taxes, premiums, or costs which are unpaid and overdue at the time the Program loan closes, up to a limit of 20 percent of the amount of the loan:

(a) Late fees,

(b) Real property taxes,

(c) Insurance premiums,

(d) Fees or costs, such as condominium or homeowners association fees, as approved by the Program, or

(e) Reasonable costs previously expended by a mortgage lienholder in connection with initiating foreclosure proceedings, if approved by the Program;

(4) Closing costs that are associated with the refinancing;

(5) Program fees such as application fees and loan review fees;

(6) Fees for financial counseling received in accordance with Regulation.14D of this chapter;

(7) In extraordinary individual cases, as determined in the discretion of the Director of DDF, the payoff and release of liens other than mortgage liens.

Md. Code Regs. 05.03.01.06

Regulations .06 amended effective September 1, 1974 (1:2 Md. R. 112)
Regulations .06 amended effective July 23, 1975 (2:16 Md. R. 1138)
Regulations .06 under a new chapter, Preferred Interest Rate Loan Program, adopted effective July 22, 1991 (18:14 Md. R. 1609)
Regulation .06C amended effective February 1, 1993 (20:2 Md. R. 110)