Md. Code Regs. 05.05.01.05

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

Section 05.05.01.05 - Eligible Uses

A. Loan funds may be used for:

(1) Capital assistance loans to sponsors for financing development costs of income-restricted projects;

(2) Loans to finance acquisition only of existing or completed:

(a) Vacant projects; or

(b) Occupied projects, if:

(i) The rental units are not occupied before acquisition or rehabilitation by families of lower income or families of limited income;

(ii) The number of units to be subject to income restrictions will be increased substantially;

(iii) Existing income limits will be reduced from current levels;

(iv) Units have been condemned or cited for code violations and the tenants are likely to be subject to displacement; or

(v) Any existing federal capital or operating subsidies will be lost without financing through the program;

(3) Operating assistance loans to sponsors for existing or completed income restricted projects including:

(a) Buy down of the interest rate on a conventional permanent loan;

(b) Payments of principal and interest on superior mortgage liens;

(c) Maintenance and repair costs;

(d) Property taxes;

(e) Hazard and liability insurance premiums;

(f) Utilities;

(g) Permits and licenses;

(h) Reasonable management fees and expenses as determined by the Department;

(i) Rent subsidies;

(j) Closing costs;

(k) Department administrative expenses; and

(l) Other project operating expenses or fees approved by the Department;

(4) Acquisition by the Department of a completed project or the land for a project, and subsequent transfer of the project or land, or both, to a sponsor;

(5) Purchase or lease by the Department of a project and, after construction or rehabilitation by the Department, sale or transfer of the project to a sponsor upon terms or conditions which make it economically feasible for the sponsor to rent to families of limited income; or

(6) Bridge loans.

B. For loans made through the Rental Housing Production Program, funds may also be used for development costs of an office and commercial space conversion project.

C. Loan funds may not be used for:

(1) Work-out financing for troubled projects;

(2) Refinancing of existing debt;

(3) Financing for a project for which the application is received after:

(a) Acquisition;

(b) Assumption by the sponsor of the liability for the costs of acquisition or rehabilitation; or

(c) Completion of rehabilitation intended to be financed in whole or in part by the loan;

(4) Existing occupied projects, except as set forth in §A(2) and (3) of this regulation;

(5) Financing only minor improvements which are not required to make the housing decent, safe, and sanitary in accordance with applicable State and local codes;

(6) Transaction costs and fees associated with the offering and syndication of a project; or

(7) Developer fees.

Md. Code Regs. 05.05.01.05

Regulations .05 adopted effective March 4, 1991 (18:4 Md. R. 446)
Regulations .05 Rental Multifamily Rental Financing Program adopted effective March 13, 2006 (33:5 Md. R. 518)