Md. Code Regs. 05.04.09.13

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

Section 05.04.09.13 - Loan Processing

A. Eligibility Determination.

(1) An application is subject to an initial review to make a preliminary determination of the eligibility of the applicant and the project.

(2) If an applicant is eligible, appropriate verification forms shall be distributed, credit reports shall be obtained, and the applicant shall be provided with a letter acknowledging receipt of the application. If the applicant is ineligible for a program loan, the applicant shall be informed in writing of the determination and the reasons for it under §H of this regulation.

B. Building and Site Evaluation. Each building or site shall be inspected by the Department to determine if the:

(1) Building is structurally sound or will be structurally sound upon completion of the improvements;

(2) Proposed improvements are eligible; and

(3) Site is suitable for construction, if applicable.

C. Construction Cost Evaluation. The Program may make a determination that the costs of new construction are comparable to the costs of the proposed acquisition and rehabilitation of an existing structure, or that new construction would better serve the special needs of those who will occupy the group home.

D. Appraisals. The Department may require an appraisal of the property showing the property's value after installation of the modification or completion of the construction. Appraisals may be performed by staff of the Program.

E. Loan Analysis. Upon receipt and approval of contractor's proposals, if applicable, and all documentation and credit information, the Program shall undertake a commitment analysis of each loan as to loan amount, interest rate, repayment provisions, and other loan terms and conditions.

F. Loan Approval.

(1) Program loans must be approved by the Secretary or the Director and, if so required by the Housing Finance Review Committee policies then in effect, receive a recommendation of approval from the Housing Finance Review Committee. If authorized by the Secretary or the Director, the Deputy Director may approve a loan in lieu of the Secretary or the Director.

(2) In an emergency when urgent action is required, program loans which would otherwise require Housing Finance Review Committee review may be approved by the Secretary or the Director without the recommendation of the Housing Finance Review Committee.

G. Loan Commitment.

(1) Upon approval of a program loan, the Department shall issue a commitment letter setting forth the interest rate on the loan, the repayment provisions, and any other terms and conditions that the Department considers appropriate for the loan or the project.

(2) The Department shall specify a time limit within which the initial closing of the loan shall occur, which time limit may be extended at the Department's sole discretion. If initial closing does not occur within the time limit specified by the Department, the Department may use the monies committed for the loan for any other loan or purpose authorized by the Act and these Regulations.

H. Loan Rejection. If a loan application is rejected, the Department shall notify the applicant in a letter which states the reason the loan is rejected.

I. Loan Reconsideration. An applicant 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.

J. Application Fee. The Department may require applicants for loans, except in hardship cases, to pay an initial application fee to cover some portion of the cost of processing the loan, including any credit reports.

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

L. Loan Closing.

(1) Time and Place. The loan closing shall be scheduled at a time and place acceptable to the borrower, the Department, and the Office of the Attorney General. Closing shall be conducted by a title company acceptable to the Department.

(2) Charges and Fees. The Department may charge the borrower the following items, if applicable, which may be financed by the loan:

(a) Recording fees and recording taxes or other charges incident to recordation;

(b) Survey charge and appraisal fee;

(c) Title examination and title insurance;

(d) An initial administrative fee to cover the costs of servicing the loan; and

(e) A closing fee.

(3) Mortgageable Items. At the Department's discretion, all closing costs are mortgageable items.

Md. Code Regs. 05.04.09.13

Regulations .13 adopted as an emergency provision effective February 23, 1987 (14:6 Md. R. 704); adopted permanently effective July 27, 1987 (14:15 Md. R. 1657)
Regulations .13 adopted effective May 25, 1992 (19:10 Md. R. 929)
Regulation .13 amended effective February 7, 2011 (38:3 Md. R. 151)
Regulation .13F amended effective November 20, 1995 (22:23 Md. R. 1799)