Md. Code Regs. 05.05.01.15

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

Section 05.05.01.15 - Loan Terms - Insurance Requirements

A. Mortgage Insurance. Mortgage insurance is not required for loans made from the program.

B. Property, Liability, and Other Insurance.

(1) At or before closing of a loan, and at such other times as required by the Department, the sponsor shall provide evidence that the sponsor, contractor, and other parties, have obtained and maintained the following insurance:

(a) Owner's liability;

(b) Owner's property or hazard or contractor's builder's risk;

(c) Contractor's liability;

(d) Architect's errors and omissions;

(e) Engineer's errors and omissions; and

(f) Flood insurance, if the project is located in a flood hazard zone.

(2) All insurance required under §B(1) of this regulation shall meet the following requirements:

(a) Be written by a company registered with the Maryland Insurance Administration;

(b) Be in force at the time of closing;

(c) Not be terminable without prior notification to the Department; and

(d) Contain such other terms and coverage satisfactory to the Department.

(3) In addition to the requirements of §B(2) of this regulation, owner's liability insurance shall:

(a) Name the Department as an additional insured; and

(b) Remain in force for the duration of the loan.

(4) In addition to the requirements of §B(2) of this regulation, contractor's liability and contractor's builder's risk insurance shall:

(a) Name the Department as an additional insured; and

(b) Remain in place through final closing or such later date as the Department requires.

(5) In addition to the requirements of §B(2) of this regulation, owner's property or hazard insurance shall:

(a) Name the Department as an additional insured, loss payee, and mortgagee; and

(b) Remain in force for the duration of the loan.

(6) For sponsors that are political subdivisions, the Department shall evaluate any self-insurance program to determine if adequate coverage and terms acceptable to the Department can be provided and accept coverage under the self-insurance program subject to this determination.

Md. Code Regs. 05.05.01.15

Regulations .15 adopted effective March 4, 1991 (18:4 Md. R. 446)
Regulations .15 Rental Multifamily Rental Financing Program adopted effective March 13, 2006 (33:5 Md. R. 518)
Regulation .15B amended effective April 19, 2010 (37:8 Md. R. 614)