Md. Code Regs. 05.13.06.13

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

Section 05.13.06.13 - Loan Administration by Approved Entities

A. General. The Department may approve non-profit and for-profit entities to originate and administer loans to food desert projects in accordance with this chapter.

B. To be eligible to administer a loan program, the entity must submit an application to the Department and meet the following minimum criteria to the satisfaction of the Department:

(1) Provide evidence satisfactory to the Department supporting the entity's demonstrated ability to:

(a) Manage a performing portfolio of business loans for a minimum period of 5 years;

(b) Evaluate loan applications, underwrite loans, and administer a loan program;

(c) Leverage Program proceeds with other private or public sources of funding;

(d) Comply with Program statutes, regulations, guidelines, and policies;

(e) Provide adequate resources and staff to implement the Program, including staff trained to efficiently:

(i) Process loan applications, draw schedules, and other loan documentation;

(ii) Evaluate loan portfolio performance; and

(iii) Monitor the work performed with the loan proceeds;

(f) Provide substantive technical assistance to borrowers;

(g) Obtain coverage by a fidelity bond or employee dishonesty liability insurance in an amount to be determined by the Department; and

(h) Be duly organized and in good standing in the State of Maryland; and

(2) Provide audited financial statements for a period of 3 years that demonstrates the entity's ability to maintain consistent:

(a) Revenues;

(b) Operating reserves;

(c) Net assets;

(d) Unrestricted assets; and

(e) Portfolio delinquency rates.

C. An approved entity shall execute and comply with the terms of an administration agreement, loan agreement, loan note, assignment, and other documents governing the duties of the entity under the Program, as required by the Department.

D. An approved entity shall be directly responsible for fulfilling all of its duties and responsibilities under the Program and may not assign its responsibilities without the prior written consent of the Department.

E. The Department may monitor an approved entity's administration of loans funded by the Department, and may enforce its remedies under the Program loan documents including revoking the entity's approval to administer a loan program under this chapter.

F. Other Requirements.

(1) An approved entity shall:

(a) Maintain financial records of loan disbursements for at least 5 years, and shall make them available for review by the Department at all reasonable times; and

(b) Provide the Department with periodic reporting on:

(i) Loan disbursements; and

(ii) Other information required by the Department.

(2) Upon notice to an approved entity, and during normal business hours, the Department may inspect the files of an approved entity relating to any loans originated under the Program.

G. To fund loans under this regulation the Department may:

(1) Directly fund a loan that is originated by an approved entity; or

(2) Provide financial assistance to an approved entity for the purpose of the approved entity making a loan for a food desert project.

Md. Code Regs. 05.13.06.13

Regulation .13 adopted effective 42:9 Md. R. 646, eff.5/11/2015