Md. Code Regs. 05.04.01.10

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

Section 05.04.01.10 - Loan Approval and Disapproval

A. Initial Eligibility Determination.

(1) Each application shall be submitted to the local administrator for initial review to make a preliminary determination of the eligibility of the applicant and the project.

(2) If an applicant is determined preliminarily to be eligible, appropriate verification forms shall be distributed, credit reports shall be obtained, and the applicant may be provided with a letter from the local administrator in the form approved by the Program acknowledging receipt of the application and notifying the applicant of the ongoing review process.

(3) If an applicant is ineligible for a loan, the applicant shall be informed in writing of the determination and the reasons for it.

B. Building Evaluation.

(1) Each building for which an eligible application is received shall be inspected for the purpose of preparing a work write-up by:

(a) The Department;

(b) The local administrator;

(c) A nonprofit corporation, acceptable to the Program; or

(d) A licensed contractor who is acceptable to the Program.

(2) The applicant shall be provided with a copy of the work write-up or an analysis of rehabilitation proposals and instructions for obtaining the contractor's proposals to complete the work.

C. Loan Approval.

(1) Upon receipt and approval of mortgage verifications, employment verification, credit information, the contractor's proposals which comply with the Department's standards and cost estimations, and any other pertinent data the Program considers relevant or necessary, the local administrator originating the loan shall undertake an analysis of each loan as to loan amount, interest rate, repayment provisions, and other loan terms and conditions.

(2) After completing the steps described in §C(1) of this regulation, a level I local administrator, or a level II local administrator, evaluating a loan for more than $60,000, shall forward the application package and the analysis of the loan to the Department for approval, disapproval, or modification.

(3) Approval to make a loan is as follows:

(a) Loans in amounts of $60,000 or less may be approved by the:

(i) Level II local administrator, when a level II local administrator originates the loan; or

(ii) Program Director, when a level I local administrator or the Department originates a loan;

(b) Loans in amounts over $60,000 and up to $250,000 may be approved by the Director;

(c) Loans in amounts over $250,000 shall be submitted to the Housing Finance Review Committee in accordance with COMAR 05.01.07.

(d) In an emergency, when urgent action is required, the Secretary may approve loans by written determination without the recommendation of the Housing Finance Review Committee.

(4) Before a level II local administrator gives final approval and issues a loan commitment for a loan in the amount of $60,000 or less, the level II local administrator shall contact the Program and receive confirmation that funds for the loan are available.

D. Loan Commitments.

(1) Loan commitments shall be made on forms provided by the Program.

(2) Loan commitments shall specify a time limit for closing the loan. The time limit may be extended at the discretion of the local administrator with the approval of the Program.

(3) If the loan closing does not occur within the specified time, the local administrator shall notify the applicant that the commitment is officially canceled.

E. Rejection. If a loan application is rejected, the Department or the local administrator, as the case may be, shall notify the applicant in writing. The rejection letter shall state the reason the loan is rejected.

F. Reconsideration. Sponsors may request reconsideration of a rejection in accordance with the procedures contained in the program guidelines. An initial decision or reconsideration of a decision is not a contested case within the meaning of the Administrative Procedure Act or COMAR 05.01.01.

G. Withdrawal of Application. An applicant may withdraw a loan application at any time before closing by delivering written notice to the Department or the local administrator originating the loan. The applicant shall bear any costs incurred for items other than internal processing including, but not limited to, title examinations, credit reports, and appraisals.

H. Cancellation of Application.

(1) The Program or the local administrator may cancel an application at any time during processing if the applicant fails to provide information requested by the Program which is required to evaluate the request.

(2) Notification of the cancellation of an application shall be made in writing.

(3) A cancelled application may be reinstated upon the applicant's written request within 60 days following the date of the cancellation. Any time after 60 days following cancellation, a new application with supporting documents may be required.

Md. Code Regs. 05.04.01.10

Regulations .10 amended effective February 11, 1985 (12:3 Md. R. 243)
Regulation .10A amended effective April 22, 1985 (12:8 Md. R. 800)
Regulations .10C amended effective September 5, 1980 (7:18 Md. R. 1737)
Regulations .10 adopted effective July 22, 1991 (18:14 Md. R. 1609)
Regulations .10C amended effective March 23, 1979 (6:6 Md. R. 509)
Regulations .10 amended effective November 9, 1992 (19:22 Md. R. 1986)
Regulation .10C amended effective February 22, 1999 (26:4 Md. R. 272); September 29, 2003 (30:19 Md. R. 1329)