Md. Code Regs. 05.03.03.05

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

Section 05.03.03.05 - Eligible Borrowers

A. At the time of application, an eligible borrower:

(1) Shall be likely to have to forfeit title to an eligible residence defined in Regulation .04 if the borrower does not receive a loan through the Program;

(2) Shall be unable to keep payments on the borrower's home mortgage loan or loans current due to loss of income caused by one or more of the following unforeseeable adverse personal or economic circumstances:

(a) Involuntary unemployment of a borrower,

(b) Onset of a borrower's disability or handicap,

(c) Divorce from a co-borrower,

(d) Death of a spouse or other co-borrower,

(e) Incarceration of a spouse or other co-borrower,

(f) Business reversal leading to sustained material loss of income, or

(g) Other circumstances of unforeseeable hardship as determined by the Program;

(3) May not have an unforeseeable hardship which is caused by:

(a) Current or former distribution of controlled dangerous substances by the borrower;

(b) Current use or possession of controlled dangerous substances by the borrower; or

(c) Former use or possession of a controlled dangerous substance by a borrower who is not a recovering addict which means someone:

(i) Who has successfully completed a supervised drug rehabilitation program and is no longer engaged in the illegal use of drugs, or has otherwise been rehabilitated successfully and is no longer engaging in illegal drug use; or

(ii) Is participating in a supervised rehabilitation program and is no longer engaging in illegal drug use.

(4) Reasonably may be expected by the Program to resume regular mortgage loan payments within 24 months after the Program loan closes.

B. The borrower's household shall be a household of limited income.

C. An eligible borrower also shall meet the following requirements:

(1) Shall own and occupy an eligible residence as defined in Regulation .04 at the time of the loan application, and intend to continue to do so at the time of the loan closing;

(2) May not own or hold any interest in any other real property except cemetery plots, or real property used in a trade or business;

(3) Shall satisfy the following criteria in the estimation of the Program:

(a) Does not have the financial resources to obtain private conventional mortgage financing,

(b) Is not eligible for mortgage assistance under other Departmental loan programs or federal government programs, and

(c) Is not eligible for assistance available when the delinquent mortgage is insured by the Federal Housing Administration (FHA) under Title II of the National Housing Act;

(4) Shall meet the underwriting standards of the Program, which shall include but not be limited to:

(a) Good credit history before loss of income from adverse personal or economic circumstances,

(b) Stable employment history,

(c) Past history of responsible financial management, evidenced in part by the level of debt at the time of application for the loan;

(5) Shall have the legal capacity to incur the obligations of the loan; and

(6) Shall agree to comply with the requirements established by the Program and with the terms of the loan.

D. A loan applicant shall be eligible for a refinancing loan under the Department's preferred interest rate loan program if:

(1) The loan applicant is otherwise eligible for a loan under the program;

(2) In the judgment of the Director of the Program, the loan applicant cannot be expected to recover from the adverse personal or economic circumstances which caused the applicant to be unable to keep mortgage payments current;

(3) The loan applicant meets the underwriting criteria of the preferred interest rate loan program, including but not limited to the income limits, house value limits, and affordability standards; and

(4) In the judgment of the Program, a loan to refinance existing mortgage debt is preferable for assisting the loan applicant.

Md. Code Regs. 05.03.03.05

Regulations .05 (Emergency Mortgage Assistance Program) adopted effective April 30, 1990 (17:8 Md. R. 975)
Regulation .05A amended effective January 2, 1993 (19:26 Md. R. 2283)