Md. Code Regs. 05.03.02.15

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

Section 05.03.02.15 - Project Development-Commitments to Developers

A. With the approval of the Secretary, the Administration may provide forward commitments to developers for the financing of mortgage loans to families of limited income meeting the requirements of Housing and Community Development Article, § 4-218, Annotated Code of Maryland, for the purchase of existing, newly constructed, or rehabilitated homes in community development projects. The Administration may finance these mortgages by making mortgage loans directly to eligible mortgagors, as described in Regulation .14 of this chapter, or by purchasing mortgage loans from an approved lender selected by the developer or the borrower, as described in Regulations .11-.13 of this chapter.

B. If a project is approved, the Administration may issue a commitment letter to the eligible developer setting forth:

(1) The total principal amount of loans for eligible residences that the Administration will make or purchase within a project;

(2) Project conditions and requirements;

(3) Loan terms and conditions; and

(4) Any other restrictions applicable to the mortgage loans, such as the:

(a) Eligibility of mortgagors, and

(b) Number, type, location, and use of eligible residences in a project.

C. Before issuance of the commitment letter, the developer shall have delivered to the Administration:

(1) Evidence, satisfactory to the Administration, of construction or rehabilitation financing for the project, if applicable;

(2) Evidence, satisfactory to the Administration, of ownership by the developer or rights to ownership of the land and buildings that are to be financed by the mortgage loans, except in cases of converting tenants to homeowners or similar projects approved by the Administration; and

(3) A certified copy of an approving ordinance or resolution, duly adopted by the legislative body of the municipality or county in which the project is located or the Board of Estimates in Baltimore City, approved by the county executive of the chartered county or the mayor of a municipality, if not a member of the city council, with the ordinance or resolution being in any form as long as it contains the following information:

(a) The identity of the developer,

(b) The location and nature of the project,

(c) Acknowledgment of the financing to be provided by the Administration, and

(d) Approval of the project.

D. The developer shall agree in writing to purchase from the Administration any mortgage loan if any information or statement contained in any submission to the Administration by the developer is untrue or inaccurate in any material respect, including any information or statement that jeopardizes the tax-exempt status of interest on applicable bonds of the Administration or compliance of the loan with applicable State or federal law.

E. The developer shall comply with the terms and conditions of a commitment letter or any other program document entered into between the developer and the Administration.

F. The Administration, in its sole discretion, shall determine whether an eligible residence is eligible to be financed in a project under the program, taking into account such factors as the purchase price, the appraised value, the cost of other housing in the area, the square footage, whether it is subject to a homeowner's warranty or equivalent warranty acceptable to the Administration, and other appropriate factors.

G. The commitment to the developer and any extensions of the commitment shall expire unless the eligible residences under construction or to be constructed are completed and sold, and the loans settled and purchased, within the time limits specified by the Administration. The time limit for a commitment may not exceed the time permissible under the applicable bond certificate.

Md. Code Regs. 05.03.02.15

Regulations .15 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 .15 adopted effective July 30, 1984 (11:15 Md. R. 1329)
Regulations .15 adopted effective September 30, 1991 (18:19 Md. R. 2098)