Md. Code Regs. 05.03.01.07

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

Section 05.03.01.07 - Short-term Acquisition, Construction, and Rehabilitation Loans

A. For short-term loans to finance the acquisition and construction, or acquisition and rehabilitation together with demolition or lot consolidation, or acquisition and rehabilitation, of residential units, an applicant shall:

(1) Be a nonprofit organization or a local government;

(2) Demonstrate to the satisfaction of the Program that it has successfully completed an acquisition and rehabilitation project or a similar project within the last 2 years;

(3) Agree to sell the residential unit to a household of limited income under a purchase or a lease purchase contract acceptable to the Program;

(4) Have a commitment from the Department for permanent financing under the Program for the sale of the residence acquired and constructed or rehabilitated with the loan; and

(5) Provide costs for acquisition, construction, rehabilitation, demolition, or lot consolidation, marketing data, and such other information as may be required by the Program;

B. The proceeds of short-term loans to local governments and nonprofits to finance the acquisition and construction, acquisition and rehabilitation together with demolition or lot consolidation, or acquisition and rehabilitation, of residential units may be used for:

(1) The purchase price of the eligible residence;

(2) Closing costs;

(3) Any of the following reasonable rehabilitation and construction costs which shall total at least $5,000;

(a) Correcting major structural defects;

(b) Repairing or replacing plumbing, HVAC, or electrical systems;

(c) Correcting any violations of local planning, zoning, or building codes, or other applicable laws;

(d) Eliminating health and safety hazards including correcting or removing defective paint surfaces and lead-based paint problems; and

(e) 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. Loans made under this regulation may not exceed the lesser of:

(1) The sum of:

(a) The sales price of the eligible residence; plus

(b) The rehabilitation costs permitted under §B of this regulation; plus

(c) Closing costs; minus

(d) Any contribution required by the Program; minus

(e) The amount of any prior permitted mortgage lien; or

(2) The sum of:

(a) The appraiser's estimate of the value of the property after the rehabilitation is completed; plus

(b) Closing costs; minus

(c) The applicant's contribution described in Regulation .11C of this chapter; minus

(d) Any prior permitted mortgage lien.

Md. Code Regs. 05.03.01.07

Regulations .07 amended effective September 1, 1974 (1:2 Md. R. 112)
Regulations .07 amended effective July 23, 1975 (2:16 Md. R. 1138)
Regulations .07 amended as an emergency provision effective January 25, 1989 (16:3 Md. R. 334); emergency status expired July 25, 1989; adopted permanently effective August 7, 1989 (16:15 Md. R. 1650)
Regulations .07 under a new chapter, Preferred Interest Rate Loan Program, adopted effective July 22, 1991 (18:14 Md. R. 1609)