Md. Code Regs. 05.03.02.05

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

Section 05.03.02.05 - Eligible Residence

A. The Administration may purchase mortgage loans secured by eligible residences comprised of one to four residential units as described in this regulation.

B. Loans Secured by Two to Four Unit Residences.

(1) The Administration may purchase a loan secured by a two to four unit residence only for special projects, initiatives, or programs approved by the Administration, in its sole discretion.

(2) In addition, a loan may be eligible for purchase only if:

(a) One of the units shall be occupied by the owner of the units; and

(b) The units shall have been first occupied at least 5 years before the mortgage is executed, unless the residence is a two-unit residence located in a targeted area and the borrower meets the federal income requirements set forth in §143(k)(7) of the Code.

C. Maximum Regional Purchase Price Limits. The cost to acquire an eligible residence, including all amounts paid by or on behalf of the borrower, excluding usual and reasonable settlement costs, may not exceed the lesser of:

(1) The maximum purchase price limit determined in accordance with federal law for each federally designated region of the State; or

(2) The appraised value of a residence.

D. Limit on Appraised Value. The appraised value of a residence may not exceed 125 percent of the maximum purchase price limit determined in accordance with federal law for each federally designated region of the State.

E. Other Requirements.

(1) The eligible residence shall meet all applicable building, health, zoning, and other legal requirements at the time of purchase, or upon completion of rehabilitation that meets the requirements for a qualified rehabilitation loan under Regulation .04B(2) of this chapter.

(2) If the residence is newly constructed, then the eligible residence shall be located within a priority funding area identified under State Finance and Procurement Article, § 5-7 B-02, Annotated Code of Maryland.

(3) Section E(2) of this regulation does not apply to loans financed solely with the proceeds of revenue bonds issued under a transfer by a county to the Administration of the Maryland State ceiling under Financial Institutions Article, Title 13, Subtitle 8, Annotated Code of Maryland.

F. Eligible Units. Types of eligible units include detached units, modular units, town homes, condominiums, manufactured homes under the meaning stated in Regulation .03B(16) of this chapter, and other types of units acceptable to the Administration.

G. Ineligible Units. The following types of housing units are not eligible:

(1) Stock ownership in cooperative housing projects, except as provided otherwise in Regulation .17B(3) of this chapter; and

(2) Manufactured homes that do not meet the definition under Regulation .03B(16) of this chapter.

H. Ineligible Business Use. A portion of the residence may not be used in a trade or business except with the prior consent of the Administration. The Code permits certain limited exceptions to the prohibition against business use. Therefore, if a borrower expects to use any portion of the residence in a trade or business, the Administration requires certification from the borrower regarding the nature and extent of any proposed business use in order to assure compliance with applicable federal law governing this use.

Md. Code Regs. 05.03.02.05

Regulations .05 adopted as an emergency provision effective April 23, 1980 (7:10 Md. R. 949); adopted permanently effective September 5, 1980 (7:18 Md. R. 1737)
Regulations .05 adopted effective July 30, 1984 (11:15 Md. R. 1329)
Regulations .05 adopted effective September 30, 1991 (18:19 Md. R. 2098)
Regulation .05E amended effective January 21, 2002 (29:1 Md. R. 20); October 13, 2003 (30:20 Md. R. 1447)