Md. Code Regs. 05.04.13.12

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

Section 05.04.13.12 - Terms and Conditions-Property Standards and Insurance Requirements

A. Property Standards. All housing assisted with Program funds shall:

(1) Meet the minimum livability code set forth in COMAR 05.02.03, as adopted by the jurisdiction; or

(2) Be property for which the owner-occupant or sponsor has obtained financing for rehabilitation work to ensure that the building will meet the minimum livability code and, if necessary, repair any structural defect that is causing paint to chip, peel, or flake.

B. Insurance Requirements.

(1) Hazard Insurance.

(a) The owner of the building shall maintain fire and extended coverage insurance at the owner's expense in the amount not less than the sum of the loan and any other indebtedness secured by the building, up to the value of the improvements.

(b) The hazard insurance policy shall:

(i) Be written by companies authorized to transact business in the State;

(ii) Be written by companies which are reputable and financially sound, as determined by the Department;

(iii) Be in force on or before the date of the loan closing;

(iv) For loans, name the Department as insured and as loss payee as its interest may appear in a standard mortgagee endorsement attached to or printed in the policy; and

(v) Contain terms and coverage satisfactory to the Department.

(2) Flood Insurance. If the building is in a 100-year flood plain, as designated by the United States Department of Housing and Urban Development:

(a) The building shall be covered by a flood insurance policy, naming the Department as beneficiary, in an amount not less than the sum of the loan and any other indebtedness secured by the building; and

(b) The flood insurance policy may not be terminated without prior notification to the Department.

Md. Code Regs. 05.04.13.12