1. A. The financial assistance from the Program shall be on such terms as the Department considers necessary to make the project financially feasible.
2. B. The Department may require an approved applicant to make a cash contribution or other form of contribution to the project.

3. C. Secured or Unsecured Loans.

   1. (1) The Program may offer financial assistance as secured or unsecured loans.

   2. (2) Secured Loans.

      1. (a) Financial assistance in the form of a loan from the Program may be secured, at the discretion of the Department.

      2. (b) The security shall be acceptable to the Department and may be:

         1. (i) A mortgage or deed of trust lien;
         2. (ii) A cash escrow;
         3. (iii) A letter of credit;
         4. (iv) A pledge of depository accounts;
         5. (v) A pledge of accounts receivable;
         6. (vi) An assignment of income;
         7. (vii) A security interest in machinery and equipment; or
         8. (viii) Any other form of security or collateral acceptable to the Department.

   3. (3) Repayment. The principal and interest of a loan made or guaranteed under the Program shall:

      1. (a) Be repayable out of revenues specified by an approved applicant;
      2. (b) Bear interest at a rate determined to be necessary and reasonable for the project which may be as low as zero percent; and
      3. (c) Be repayable in accordance with a schedule determined by the Department, including a deferred payment schedule.

   4. (4) Modification. In order to facilitate the successful completion or operation of a project, the Department may modify:

      1. (a) The rate of interest;
      2. (b) The time or amount of payment; or
      3. (c) Any other term of a loan.
   5. (5) Default. In the event of default, the Department shall have the right to modify the rate of interest, the time or amount of payment, or any other term of financial assistance in order to ensure repayment and achieve the purposes of the Program.
4. D. Insurance. At or before closing of the financial assistance, or at such other times as required by the Department, the applicant shall provide evidence acceptable to the Department that the applicant, contractor, and other parties, have obtained and maintained property, liability, and other insurance.

Authority: Housing and Community Development Article, §§2-201 and 2-111, Title 4, Subtitle 5, and Title 6, Subtitle 3, Annotated Code of Maryland

Effective date: September 25, 1995 (22:19 Md. R. 1472)

Regulation .03B amended effective May 19, 1997 (24:10 Md. R. 709); September 6, 1999 (26:18 Md. R. 1374)

Regulation .05B, C amended effective May 19, 1997 (24:10 Md. R. 709)

Regulation .06A amended effective May 19, 1997 (24:10 Md. R. 709)

Regulation .08A amended effective May 19, 1997 (24:10 Md. R. 709)

Regulation .10 amended effective May 19, 1997 (24:10 Md. R. 709)

Chapter revised effective September 17, 2001 (28:18 Md. R. 1619)

Chapter revised effective April 25, 2005 (32:8 Md. R. 741)

Regulation .03B amended effective April 7, 2008 (35:7 Md. R. 747); January 20, 2014 (41:1 Md. R. 12)

Regulation .06A amended effective January 20, 2014 (41:1 Md. R. 12)

Regulation .07E amended effective April 19, 2010 (37:8 Md. R. 614)

Regulation .08C, D amended effective April 7, 2008 (35:7 Md. R. 747)

Regulation .09 repealed effective January 20, 2014 (41:1 Md. R. 12)

Regulation .11A,B amended effective January 20, 2014 (41:1 Md. R. 12)

Chapter revised effective December 22, 2014 (41:25 Md. R. 1477)

Regulations .01—.19 repealed and new Regulations .01—.14 adopted effective October 7, 2019 (46:20 Md. R. 843)