1. A. Loan funds may be used for:

   1. (1) Capital assistance loans to sponsors for financing development costs of projects;

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

      1. (a) Vacant projects; or

      2. (b) Occupied projects, if:

         1. (i) The rental units are not occupied before acquisition or rehabilitation by households of limited income;
         2. (ii) The number of units to be subject to income restrictions will be increased substantially;
         3. (iii) Existing income limits will be reduced from current levels;
         4. (iv) Units have been condemned or cited for code violations and the tenants are likely to be subject to displacement; or
         5. (v) Any existing federal capital or operating subsidies will be lost without financing through the Program;

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

      1. (a) Buy down of the interest rate on a conventional permanent loan;
      2. (b) Payments of principal and interest on superior mortgage liens;
      3. (c) Maintenance and repair costs;
      4. (d) Property taxes;
      5. (e) Hazard and liability insurance premiums;
      6. (f) Utilities;
      7. (g) Permits and licenses;
      8. (h) Reasonable management fees and expenses as determined by the Department;
      9. (i) Rent subsidies;
      10. (j) Closing costs;
      11. (k) Department administrative expenses; and
      12. (l) Other project operating expenses or fees approved by the Department;
   4. (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. (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 households of limited income; or
   6. (6) Bridge loans.

2. B. Loan funds may not be used for:

   1. (1) Work-out financing for troubled projects;
   2. (2) Refinancing of existing debt;

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

      1. (a) Acquisition;
      2. (b) Assumption by the sponsor of the liability for the costs of acquisition or rehabilitation; or
      3. (c) Completion of rehabilitation intended to be financed in whole or in part by the loan;
   4. (4) Financing only minor improvements which are not required to make the housing decent, safe, and sanitary in accordance with applicable State and local codes;
   5. (5) Transaction costs and fees associated with the offering and syndication of a project; or
   6. (6) Developer fees.

Authority: Housing and Community Development Article, §§4-401—4-411, Annotated Code of Maryland

Effective date: November 19, 1984 (11:23 Md. R. 1991)

Chapter recodified from COMAR 05.01.17 to COMAR 05.05.01

Regulations .01—.13 repealed and new Regulations .01—.29 adopted effective March 4, 1991 (18:4 Md. R. 446)

Regulation .06 amended effective January 2, 1994 (20:25 Md. R. 1942); April 5, 1999 (26:7 Md. R. 538); January 21, 2002 (29:1 Md. R. 20)

Regulation .09E amended effective January 2, 1994 (20:25 Md. R. 1942)

Regulation .10 repealed and Regulation .11 amended and recodified to Regulation .10 as an emergency provision effective August 24, 1995 (22:19 Md. R. 1456); emergency status extended at 23:7 Md. R. 547)

Regulation .10 repealed effective August 26, 1996 (23:17 Md. R. 1246)

Regulation .11 amended effective August 26, 1996 (23:17 Md. R. 1246)

Regulation .16C amended effective May 31, 1999 (26:11 Md. R. 853)

Regulation .18D amended effective November 7, 1994 (21:22 Md. R. 1873)

Regulation .20 amended effective August 26, 1996 (23:17 Md. R. 1246)

Regulations .01—.23 Rental Housing Program repealed and new Regulations .01—.32 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)

Regulations .01—.32 Multifamily Rental Financing Program repealed and new Regulations .01—.34 Rental Housing Program adopted effective December 22, 2014 (41:25 Md. R. 1476)

Regulation .13 amended effective October 8, 2018 (45:20 Md. R. 917)