# Housing and Community Development (GHS)

## Title 4. Division of Development Finance

### Subtitle 1. Division Established; Units in Division

#### Section 4-101

(a) In this title the following words have the meanings indicated.

(b) "Administration" means the Community Development Administration.

(c) "Division" means the Division of Development Finance.

(d) "Elderly household" means, except as provided in Sec. 4-2901 of this title, one or more individuals who occupy a residential dwelling unit, at least one of whom meets the age limit specified by the Secretary that:

  (1) is greater than or equal to age 55; and

  (2) may vary for different programs or types of projects.

(e) "Nonprofit sponsor" means a sponsor that is:

  (1) a nonprofit organization; or

  (2) a limited partnership, if:

    (i)

      (1) each general partner is a nonprofit organization; or

      (2) each general partner is a wholly owned subsidiary of a nonprofit organization;

    (ii) the limited partnership is formed to undertake a project that is eligible as a whole or in part for a federal program or incentive, including low-income housing tax credits; and

    (iii) a nonprofit organization manages the project or will receive the net cash flow or residual sale proceeds on the sale of the project.

#### Section 4-102

There is a Division of Development Finance.

#### Section 4-103

The Division includes:

(1) the Community Development Administration;

(2) the Disaster Relief Housing Program;

(3) the Down Payment and Settlement Expense Loan Program;

(4) federal and State weatherization programs;

(5) the Group Home Financing Program;

(6) the Lead Hazard Reduction Grant Program;

(7) the Lead Hazard Reduction Loan Program;

(8) the local government infrastructure program;

(9) the Maryland Home Financing Program;

(10) the Maryland Housing Rehabilitation Program;

(11) the Neighborhood Housing Services Fund;

(12) the Operating Assistance Grants Demonstration Projects;

(13) the Partnership Rental Housing Program;

(14) the Radium Grant Program;

(15) the Rental Allowance Program, the Statewide Rental Assistance Voucher Program, and other rental assistance programs;

(16) the Rental Housing Program; and

(17) the Self-Help Homeownership Technical Assistance Program.

#### Section 4-104

The Division shall conduct outreach to facilitate the investment by qualified opportunity funds, as defined in Sec. 1400Z-2 of the Internal Revenue Code, in urban, suburban, and rural neighborhoods in the State.

### Subtitle 2. Community Development Administration

#### Section 4-201

(a) In this subtitle the following words have the meanings indicated.

(b) "Business project" means a project that qualifies under Sec. 4-223 of this subtitle.

(c) "Commercial building" means any building that:

  (1) is used primarily to carry on a business whether or not for profit;

  (2) is not a residential building; and

  (3) is not used primarily to manufacture or produce raw materials, products, or agricultural commodities.

(d) "Commercial energy audit" means:

  (1) an energy audit performed for purposes of Title VII of the National Energy Conservation Policy Act, 42 U.S.C. Sec.Sec. 6201 through 6422; or

  (2) an onsite inspection of a commercial building that includes a determination of, and provides information on:

    (i) the type, quantity, and rate of energy consumption of the building;

    (ii) the maintenance and operation procedures to reduce the energy consumption of the building; and

    (iii) the cost of implementing an appropriate energy conservation project, a solar energy project, or both, and the savings in energy costs likely to result from the project.

(e) "Community development project" means a project that qualifies under Sec. 4-217 of this subtitle.

(f)

  (1) "Development costs" means the costs that the Department considers reasonable and necessary to carry out:

    (i) a community development project;

    (ii) an energy conservation project;

    (iii) a home improvement project;

    (iv) an infrastructure project;

    (v) a public purpose project;

    (vi) a solar energy project;

    (vii) a special housing facility; or

    (viii) a business project.

  (2) "Development costs" includes:

    (i) the costs of:

      (1) studies, surveys, plans and specifications, and architectural, engineering, or other special services;

      (2) acquisition of land and any buildings on the land;

      (3) site preparation and development, construction, reconstruction, rehabilitation, and improvement; and

      (4) acquisition of machinery, equipment, and furnishings;

    (ii) expenses incurred in connection with initial occupancy or operation of the project;

    (iii) an allocable portion of the administrative and operating expenses of the Department;

    (iv) the cost of financing the project, including interest on bonds and notes issued to finance the project from the date issued to the date the Department determines that the project is substantially occupied or substantially in operation;

    (v) the cost of other items, including indemnity and surety bonds, premiums on insurance, fees, relocation costs, and charges and expenses of trustees, depositories, and paying agents for bonds and notes issued; and

    (vi) operating and expansion costs for business projects.

(g) "Director" means the Director of the Administration.

(h) "Energy conservation project" means a project that qualifies under Sec. 4-218 of this subtitle.

(i) "Family of limited income" means a family or individual whose income does not exceed the upper income limits established by the Secretary under Sec. 4-212 of this subtitle.

(j) "Home improvement project" means a project that qualifies under Sec. 4-219 of this subtitle.

(k) "Infrastructure project" means a project that qualifies under Sec. 4-220 of this subtitle.

(l) "Limited dividend corporation" means a corporation that:

  (1) qualifies as a limited dividend corporation under the Moderate-Income Rental Program of the National Housing Act, Title 12, Chapter 13 of the United States Code; and

  (2) is operated only to further a community development project.

(m) "Local development agency" means the governmental unit of a political subdivision that the chief executive officer of the political subdivision designates to carry out community development under this subtitle.

(n) "Local development entity" means a corporation or foundation, no part of the net earnings of which inures to the benefit of a private shareholder or individual, that is organized and operated primarily to foster, encourage, and assist community development in the State.

(o) "Local obligation" means a bond, note, or other obligation of a political subdivision or a governmental unit of a political subdivision.

(p) "Public purpose project" means a project that qualifies under Sec. 4-221 of this subtitle.

(q) "Residential building" means a single family or multifamily structure that is used primarily for human dwelling and that has a system for heating, cooling, or both.

(r) "Residential energy audit" means:

  (1) an inspection or energy audit of a residential building or a dwelling unit in a residential building performed for purposes of Title II or Title VII of the National Energy Conservation Policy Act, Title 42, Chapter 91 of the United States Code; or

  (2) an onsite inspection of a residential building or a dwelling unit in a residential building that includes a determination of and provides information on:

    (i) the type, quantity, and rate of energy consumption of the building or dwelling unit;

    (ii) maintenance and operating procedures to reduce the energy consumption of the residential building or dwelling unit; and

    (iii) the cost of implementing an appropriate energy conservation project, solar energy project, or both, and the savings in energy costs that are likely to result from the project.

(s) "Residential mortgage loan" means a loan, including a temporary loan or advance, that is secured by a mortgage of real property in the State that is:

  (1) improved by a residential building; or

  (2) unimproved, if the loan proceeds are to be used to construct a residential building.

(t) "Solar energy project" means a project that qualifies under Sec. 4-222 of this subtitle.

(u) "Special housing facility" means a project or undertaking for the refinancing, acquisition, rehabilitation, improvement, renovation, or construction of a building that:

  (1) will be occupied in substantial part by families of limited income;

  (2) will provide common, shared, or independent living, dining, kitchen, sanitary, and sleeping facilities;

  (3) may include supportive services or supervisory live-in personnel for individuals with specialized housing needs;

  (4) may include nonresidential facilities to serve individuals with special needs who need not be residents of the project or undertaking; and

  (5) is not subject to Sec. 4-213(b) of this subtitle.

(v) "Sustainable community" has the meaning stated in Sec. 6-201 of this article.

#### Section 4-202

The General Assembly finds that:

(1) in this era of rapid population growth and expansion and of increasing urbanization, there is a need in many areas of the State to promote sound community development;

(2) the political subdivisions do not have adequate resources to deal effectively with all of the problems of sound community development, and the ordinary operations of private enterprise cannot deal with them without State assistance;

(3) there is a need to coordinate and concentrate federal, State, regional, and local public and private community development efforts and resources;

(4) there is a shortage of adequate, safe, and sanitary housing for families of limited income, and increasing the housing supply for families of limited income will ease the shortage and promote sound community development;

(5) increasing opportunities for homeownership is desirable and promotes sound community development;

(6) reducing energy consumption and increasing the use of solar energy by providing financial assistance to encourage energy conservation and solar energy improvements to residential buildings and commercial buildings promote sound community development and the public interest;

(7) the public infrastructure maintained by political subdivisions, including streets, sidewalks, curbs, sewer and water systems, bridges, and public buildings, needs rehabilitation and construction;

(8) the resources necessary for financing infrastructure projects have become scarcer in recent years;

(9) providing an additional, accessible, and uncomplicated mechanism to finance infrastructure projects promotes sound community development, is vital to a strong economy, improves the quality of the environment, and otherwise promotes the health, safety, and welfare of the residents of the State;

(10) promoting sound community development is a proper public purpose and State use, for which public money may be spent and property may be acquired; and

(11) the functions and responsibilities of the Administration set forth in this subtitle are necessary to achieve the ends listed in this section.

#### Section 4-203

(a) To attract and retain teachers in the State by increasing homeownership opportunities, the General Assembly finds that there is a need to authorize the Department to develop a program to dedicate up to $25,000,000 over 5 years to provide mortgage loans to teachers at interest rates below the prevailing interest rate for similar programs.

(b)

  (1) A mortgage loan under this section shall be available to a teacher who is a first-time home buyer.

  (2) The loan shall be conditioned on an agreement by the teacher to teach in the State for at least 3 years if work is available for the teacher.

  (3) The loan shall be used to purchase property in a priority funding area as defined in Sec.Sec. 5-7B-02 and 5-7B-03 of the State Finance and Procurement Article.

(c) The Administration shall develop the program in consultation with:

  (1) the State Department of Education, to ensure that the program is consistent with the State's strategy to attract and retain teachers; and

  (2) local boards of education, to ensure that the program is properly marketed.

#### Section 4-204

There is a Community Development Administration.

#### Section 4-205

The Administration is created to:

(1) coordinate activities and programs that contribute to sound community development;

(2) encourage and facilitate the development of new and existing communities by reducing the costs of development through grants, loans, and other forms of financial assistance;

(3) encourage and facilitate energy conservation and the use of solar energy in residential buildings and commercial buildings through grants, loans, and other forms of financial assistance;

(4) make land available for sound community development; and

(5) assist the efforts of private enterprise, political subdivisions, local public agencies, local development entities, and nonprofit organizations.

#### Section 4-206

(a) Except as provided in subsection (b) of this section, a grant of land or money may be made only to a political subdivision, a local development entity, a local development agency, or a nonprofit organization.

(b)

  (1) This section does not apply to grants that may be awarded to the Administration under federal law.

  (2) The Administration may award grants to home buyers for settlement expenses as provided by the Department under this title.

  (3) The Administration may award grants under Sec. 4-235(b)(1)(ii) of this subtitle.

#### Section 4-207

(a) With the approval of the Governor, the Secretary shall appoint the Director.

(b) The Director serves at the pleasure of the Secretary.

(c) The position of Director is in the executive service or management service of the State Personnel Management System.

(d) The Director shall operate and exercise the powers of the Administration under the direction of the Secretary and in accordance with this subtitle.

(e) The Director is entitled to:

  (1) compensation as provided in the State budget; and

  (2) reimbursement for expenses under the Standard State Travel Regulations as provided in the State budget.

(f) The Director shall have a staff and professional consultants as provided in the State budget.

#### Section 4-208

(a) There is a Housing Finance Review Committee.

(b) The Housing Finance Review Committee consists of seven members appointed by the Governor on recommendation of the Secretary as follows:

  (1) three employees of the Department, one of whom may be the Secretary;

  (2) one employee of the Executive Branch of State government who is not employed by the Department; and

  (3) three members of the public.

(c)

  (1) The term of a public member is 4 years and begins on July 1.

  (2) At the end of a term, a public member continues to serve until a successor is appointed and qualifies.

  (3) A public member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.

(d)

  (1) The Housing Finance Review Committee shall review and make recommendations to the Secretary about:

    (i) specific loan requests or categories of loan requests; and

    (ii) the investment and project financing policies of the Administration.

  (2) The Secretary may approve a specific loan request without a recommendation of the Housing Finance Review Committee if the request requires urgent action.

#### Section 4-211

(a) The Administration shall:

  (1) assist the Governor in coordinating the activities of governmental units of the State that affect the solution of community development problems and the implementation of community plans;

  (2) encourage and assist political subdivisions to develop mutual and cooperative solutions to their common problems;

  (3) serve as a clearinghouse for information and other materials that may be pertinent to sound community development, including information on available federal, State, and private financial and technical assistance;

  (4) carry out continuing studies and analyses of sound community development in cooperation with the Department of Planning;

  (5) make recommendations, in cooperation with the Department of Planning, for administrative or legislative action, paying particular attention to the problems of metropolitan, suburban, and other areas;

  (6) implement model or demonstration programs and projects, contract to administer functions or services in a political subdivision, or otherwise provide a program of practical research in community development;

  (7) promote community development by giving to political subdivisions, local development agencies, local development entities, or nonprofit organizations:

    (i) technical assistance and advisory, consultative, training, and educational services; and

    (ii) grants and loans to pay for:

      (1) the services and technical assistance; and

      (2) any development costs;

  (8)

    (i) contract for and accept from the federal government a grant, contribution, or loan of money, property, or other aid in any form for community development; and

    (ii) do all things necessary to qualify for the grant, contribution, or loan, including those things necessary to qualify for assistance as a local public agency or public housing agency under a federal housing or renewal program;

  (9) contract for and accept from any governmental unit of the State or other source a gift, grant, contribution, or loan of money, property, or other aid in any form for community development and comply with the terms and conditions of the gift, grant, contribution, or loan;

  (10) attach to a sale or lease of property or to a loan or grant the terms and conditions that the Director determines and the Secretary approves;

  (11) enter into agreements to make annual payments instead of assessments, charges, or property taxes to a political subdivision in respect to real property that the Administration owns; and

  (12) provide money to programs eligible to receive funding from the Neighborhood Business Development Fund under Sec. 6-310 of this article.

(b) To implement community development projects and public purpose projects in accordance with Part V of this subtitle, and subject to Sec.Sec. 4-213(b) and 4-214 of this subtitle, the Administration may:

  (1)

    (i) acquire, own, and hold land that is open, mainly open, or undeveloped, or any interest in the land;

    (ii) install access and interior streets and roads and sewer and water lines in or to the land and otherwise improve the land; or

    (iii) transfer, lease, mortgage, or otherwise dispose of or encumber the land;

  (2)

    (i) acquire, own, and hold land that is not open, mainly open, or undeveloped, as well as personal or mixed property;

    (ii) manage and operate the property;

    (iii) clear, improve, construct, or rehabilitate the property;

    (iv) transfer, lease, mortgage, or otherwise dispose of or encumber the property; or

    (v) take assignments of rentals or leases for the property;

  (3) arrange or contract with a political subdivision or private party in connection with a community development project or public purpose project for:

    (i) planning, replanning, zoning, or rezoning;

    (ii) opening, grading, or closing streets, roads, alleys, or other places;

    (iii) furnishing facilities;

    (iv) acquiring property or property rights by the political subdivision; or

    (v) furnishing property or services; and

  (4) spend Administration money for an undertaking that the Secretary approves.

(c) The Administration shall develop and implement a weatherization program to provide money for insulation materials and insulation costs to households that qualify based on income and the program eligibility guidelines that the Secretary establishes.

(d)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Covered building" has the meaning stated in Sec. 2-1601 of the Environment Article.

    (iii) "Energy conservation project" means a project that qualifies under Sec. 4-218 of this subtitle.

  (2) For the purpose of reducing direct greenhouse gas emissions from multifamily residential buildings in accordance with the standards adopted under Sec. 2-1602 of the Environment Article, the Administration shall develop and implement a program to provide grants and loans for energy conservation projects and projects to install renewable energy generating systems in covered buildings that house primarily low- to moderate-income households.

  (3) Grants and loans provided under this subsection may not be used for a project to install new equipment that uses fossil fuels or improve the efficiency of existing equipment that uses fossil fuels.

  (4) In each of fiscal years 2024 through 2026, the Governor shall include in the annual budget bill an appropriation of $5,000,000 to the Department for the purpose of providing grants and loans under this subsection.

  (5) On or before December 1, 2023, and each December 1 thereafter, the Administration shall report to the Governor and, in accordance with Sec. 2-1257 of the State Government Article, the General Assembly on the projects funded under this subsection.

#### Section 4-212

(a) In establishing the upper income limits for a family of limited income, the Secretary shall consider factors including:

  (1) the income of the family available for housing;

  (2) the size of the family;

  (3) the cost and condition of available housing;

  (4) the ability of the family to compete in the private housing market; and

  (5) standards and definitions established for federal housing programs.

(b) The limits established under subsection (a) of this section may vary for different:

  (1) types of housing;

  (2) programs of the Administration; and

  (3) areas of the State.

(c) A limit established under subsection (a) of this section may be supplemented for a particular project.

#### Section 4-213

(a) In accordance with regulations that the Secretary adopts, an agreement that the Administration makes to carry out its functions and responsibilities under Sec.Sec. 4-211, 4-214, and 4-225 through 4-235 of this subtitle shall be approved by:

  (1) the Secretary; and

  (2) the Board of Public Works, if its approval is required by law.

(b) The Administration shall provide written notice and a reasonable opportunity to comment to the chief executive officer or the equivalent officer and the head or president of the legislative body of the political subdivision in which a proposed community development project or a public purpose project is located.

(c) If the proposed project is located in a municipal corporation, the notice required under subsection (b) of this section shall be sent to the chief executive officer and head or president of the legislative body of the municipal corporation and not to the county.

(d) A project that the Administration finances is subject to applicable zoning and building codes.

(e)

  (1) This subsection applies notwithstanding any other provision of this subtitle or other State law.

  (2) In exercising its functions and responsibilities, the Administration may sell or lease for a term not exceeding 99 years all or part of the real, mixed, or personal property constituting a community development project.

  (3) A sale or lease under this section may be made:

    (i) without public bidding or public sale; and

    (ii) on terms and conditions that make housing in that development economically feasible for families of limited income.

  (4) A sale or lease under this section shall conform with a plan for community development that the Secretary approves at a public hearing held after notice is published in at least one newspaper of general circulation in the political subdivision in which the development is located.

  (5) The plan for community development presented at the hearing shall be in accordance with regulations that the Secretary adopts, requiring:

    (i) a description of the property;

    (ii) a statement of the identity of the proposed purchaser or lessee and the proposed use or reuse of the property;

    (iii) the price or rental to be paid by the purchaser or lessee; and

    (iv) the conditions of the sale or lease that ensure that the community development purposes of this subtitle will be carried out.

(f) In carrying out this subtitle, the Administration shall comply with local laws applicable to the community development project.

(g)

  (1) In carrying out this subtitle, the Administration shall:

    (i) foster local initiative and participation in community development activities; and

    (ii) consider local and regional goals and policies as expressed in urban renewal, community renewal, and local comprehensive land use plans and regional plans.

  (2) Wherever possible, the Administration shall carry out community development projects together with and through the use of:

    (i) private enterprise;

    (ii) limited dividend corporations;

    (iii) local development agencies; and

    (iv) local development entities.

#### Section 4-214

The Administration has the power of eminent domain, but may not exercise it in a political subdivision without the consent of the political subdivision given by ordinance of its governing body for a specific community development project.

#### Section 4-215

(a) The Administration shall administer a home buyer assistance program that:

  (1) assists home buyers to receive low-interest mortgage loans, with down payment and closing cost assistance options, for the purchase of homes near their place of employment; and

  (2) coordinates with, and matches where appropriate, similar programs offered by private employers and county and municipal governments so as to maximize the total amount that home buyers can receive under the program.

(b) With reference to loans under this program, the Administration shall:

  (1) allow home buyers to utilize the loans for the purchase of newly constructed or existing homes; and

  (2) require a home purchased under this program to be occupied by the home buyer as a principal residence.

(c) The Administration shall facilitate the marketing of the program with private employers and county and municipal governments, and, where appropriate, other units of State government and nonprofit organizations.

(d) The Administration shall adopt regulations to implement the program established under this section.

(e) The Department shall report to the General Assembly on or before December 31 each year, in accordance with Sec. 2-1257 of the State Government Article, on the program established under this section.

#### Section 4-215.1

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Current student" means an individual who:

    (i) attends a public institution of higher education in the State; and

    (ii) is a degree-seeking, full-time equivalent student in an undergraduate level, graduate level, or professional degree program.

  (3) "Public institution of higher education" has the meaning stated in Sec. 10-101 of the Education Article.

  (4) "Recent graduate" means an individual who, within 5 years before applying for assistance under this section, graduated from a public institution of higher education in the State with at least:

    (i) 120 credits in an undergraduate level program; or

    (ii) 30 credits in a graduate level or professional degree program.

(b) The Administration may administer a home buyer assistance program that:

  (1) assists current students and recent graduates to receive low-interest mortgage loans, with down payment and closing cost assistance options, for the purchase of homes near the school attended by the student or graduate;

  (2) coordinates with, and matches where appropriate, similar programs offered by public institutions of higher education, private employers, and county and municipal governments to maximize the total amount that current students and recent graduates can receive under the program;

  (3) authorizes a public institution of higher education to provide matching funds to a home buyer who receives assistance under this section; and

  (4) utilizes available funding sources.

(c) With reference to loans under this program, the Administration may:

  (1) allow home buyers to utilize the loans for the purchase of newly constructed or existing homes;

  (2) require a home purchased under the program to be occupied by the home buyer as a principal residence; and

  (3) utilize available funding sources.

(d) The Administration may facilitate the marketing of the program with public institutions of higher education, private employers, county and municipal governments, and, where appropriate, other units of State government and nonprofit organizations with existing funding for the marketing of current programs of the Department, if available.

(e) The Administration shall adopt regulations to carry out this section.

(f) On or before December 31 each year, the Department shall report to the General Assembly, in accordance with Sec. 2-1257 of the State Government Article, on the program established under this section.

#### Section 4-216

For fiscal year 2018 and each fiscal year thereafter, the Governor shall include in the annual budget bill or the capital budget bill an appropriation of $3,000,000 from general funds or the proceeds from the sale of State general obligation bonds for the Shelter and Transitional Housing Facilities Grant Program.

#### Section 4-217

(a) A project, undertaking, or a part of a project or undertaking, including the real, personal, and mixed property involved, qualifies as a community development project if it is planned, acquired, owned, developed, constructed, reconstructed, rehabilitated, repaired, renovated, or improved to promote sound community development.

(b) A community development project shall provide for:

  (1) new or existing housing:

    (i) that is or will be occupied in substantial part by families of limited income; or

    (ii) at least 20% of which is or will be occupied by families of limited income, if the project is financed with bonds, notes, or other evidences of indebtedness issued by the Administration, the income from which being includable in the holder's gross income under the Internal Revenue Code as determined by the Administration at the time of issue;

  (2) any improvements, such as streets, roads, sewer lines, and water lines that are needed to support the housing; and

  (3) the public or private commercial, educational, cultural, recreational, community, or civic facilities that are needed to support the housing.

(c) A community development project may include public or private commercial, educational, cultural, recreational, community, or civic facilities that are not needed to support the housing, if:

  (1) they are less than a substantial part of the project; or

  (2) the Secretary finds that they will promote sound community development.

(d)

  (1) The Administration shall administer community development projects that:

    (i) are in sustainable communities approved under Sec. 6-305 of this article; and

    (ii) provide employees with financial assistance in the form of grants to buy homes near their workplaces.

  (2) A community development project administered under this subsection is not subject to the provisions of subsection (b)(1) of this section that require part of the housing to be occupied by families of limited income.

  (3) The community development projects administered under this subsection shall be known as the "Live Near Your Work" program.

  (4) The Secretary shall adopt regulations to implement the "Live Near Your Work" program established under this subsection.

  (5)

    (i) In fiscal year 2007 and fiscal year 2008, the Governor may include in the State budget $250,000 for the "Live Near Your Work" program established under this subsection.

    (ii) In fiscal year 2009 and every fiscal year thereafter, the Governor may include in the State budget no less than $250,000 and no more than $500,000 for the "Live Near Your Work" program established under this subsection.

(e)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Current student" means an individual who:

      (1) attends a public institution of higher education in the State; and

      (2) is a degree-seeking, full-time equivalent student in an undergraduate level, graduate level, or professional degree program.

    (iii) "Public institution of higher education" has the meaning stated in Sec. 10-101 of the Education Article.

    (iv) "Recent graduate" means an individual who, within 5 years before applying for assistance under this section, graduated from a public institution of higher education in the State with at least:

      (1) 120 credits in an undergraduate level program; or

      (2) 30 credits in a graduate level or professional degree program.

  (2) The Administration may administer community development projects that:

    (i) are in sustainable communities approved under Sec. 6-305 of this article; and

    (ii) provide current students and recent graduates with financial assistance in the form of grants to buy homes near the school of the student or graduate.

  (3) A community development project administered under this subsection is not subject to the provisions of subsection (b)(1) of this section that require part of the housing to be occupied by families of limited income.

  (4) The community development projects administered under this subsection shall be known as the Live Near Your School program.

  (5) The Administration shall adopt regulations to implement the Live Near Your School program established under this subsection.

#### Section 4-218

(a) A project for a residential building qualifies as an energy conservation project if it consists of:

  (1) the purchase or installation of:

    (i) caulking or weather stripping;

    (ii) a clock thermostat;

    (iii) ceiling, attic, wall, floor, or duct insulation;

    (iv) water heater insulation;

    (v) a storm window or door, multiglazed window or door, or heat-absorbing or heat-reflecting window or floor material;

    (vi) a device associated with load management techniques;

    (vii) an automatic energy control system;

    (viii) machinery, equipment, or a facility that uses groundwater as a heat source for a heating system or as a heat sink for an air conditioning system;

    (ix) a furnace efficiency modification, including:

      (1) a replacement burner, furnace, or boiler or any combination of them that increases the energy efficiency of the heating system;

      (2) a device for modifying a flue opening that increases the energy efficiency of the heating system; and

      (3) an electrical or mechanical furnace ignition system that replaces a standing gas pilot light; and

    (x) any other energy conservation improvement that the Administration determines by regulation to be appropriate and consistent with this subtitle; or

  (2) a planning or technical service, a residential energy audit, or a conversion from a master utility meter to individual utility meters if the service, audit, or conversion is related to or undertaken with the installation of an item specified in item (1) of this subsection.

(b) A project for a commercial building qualifies as an energy conservation project if it consists of:

  (1) the purchase, installation, or modification of an installation that is designed primarily to reduce the consumption of energy, including:

    (i) caulking or weather stripping;

    (ii) insulating the building structure or a system in the building;

    (iii) a storm window or door, a multiglazed window or door, a heat-absorbing or heat-reflecting window or door system, glazing, a reduction in glass area, or another window or door system modification;

    (iv) an automatic energy control system;

    (v) equipment that is associated with an automatic energy control system and that is required to operate a variable steam, hydraulic, or ventilation system;

    (vi) the replacement or modification of a lighting system to increase energy efficiency without increasing the overall illumination, unless the increase in illumination is necessary to conform to State or local law;

    (vii) an energy recovery system;

    (viii) a cogeneration system;

    (ix) machinery, equipment, or a facility that uses groundwater as a heat source for a heating system or as a heat sink for an air conditioning system;

    (x) a modification of a furnace or utility plant and distribution system including:

      (1) a replacement burner, furnace, or boiler or any combination of them that increases the energy efficiency of the heating system;

      (2) a device for modifying a flue opening that increases the energy efficiency of the heating system; and

      (3) an electrical or mechanical furnace ignition system that replaces a standing gas pilot light; or

    (xi) any other energy conservation improvement that the Administration determines by regulation to be appropriate and consistent with this subtitle; or

  (2) a planning or technical service or a commercial energy audit, if the service or audit is related to or undertaken with the installation, or the modification of an installation, of an item specified in item (1) of this subsection.

#### Section 4-219

(a) A project or undertaking qualifies as a home improvement project if, by improvement, alteration, addition, or repair, it substantially protects or improves the basic liveability of a residential building that will be occupied in substantial part by families of limited income.

(b) A home improvement project for a residential building that contains more than four dwelling units is subject to the provisions of this subtitle that apply to a community development project.

#### Section 4-220

(a) This section does not apply to a facility if a local obligation that finances the facility is a private activity bond under Sec. 141 of the Internal Revenue Code, for which an allocation under Sec. 146 of the Internal Revenue Code is required.

(b)

  (1) A project, undertaking, or facility qualifies as an infrastructure project if it is planned, acquired, owned, developed, constructed, reconstructed, rehabilitated, or improved by or on behalf of a political subdivision to provide the essential physical elements that are the basis of the public service system.

  (2) Infrastructure projects include streets, sidewalks, curbs, sewer and water systems, bridges, and public buildings that are owned by a political subdivision or a governmental unit of a political subdivision.

#### Section 4-221

(a) A project or undertaking, including the real, personal, and mixed property involved, qualifies as a public purpose project if it is planned, acquired, owned, developed, constructed, reconstructed, rehabilitated, repaired, renovated, or improved with the financial assistance of the Administration or the assistance of federal low-income housing credits authorized by the Internal Revenue Code, and it is:

  (1) eligible wholly or partly for federal low-income housing credits; or

  (2) located in a distressed area designated under subsection (e) of this section.

(b) Except as provided in subsection (c) of this section, a public purpose project:

  (1) shall provide in substantial part for existing or new housing; and

  (2) may include:

    (i) any improvements, such as streets, roads, sewer lines, and water lines; and

    (ii) public or private commercial, educational, cultural, recreational, community, or civic facilities.

(c) A public purpose project may include a greater proportion of public or private facilities if the Secretary determines that to do so would promote sound community development.

(d) All or part of the housing portion of a public purpose project shall be occupied by families of limited income.

(e) At the request of a political subdivision, the Secretary may designate a distressed area of the political subdivision after considering factors including:

  (1) the availability, cost, and condition of housing and neighborhood facilities, including the age and number of abandoned and substandard structures;

  (2) the incomes of residents relative to State or area-wide regional median incomes, including the number of individuals who are welfare recipients, unemployed, or living in poverty;

  (3) the need to finance housing or public or private facilities to upgrade the social and economic conditions of the distressed area;

  (4) the plans and financial commitment of the political subdivision to undertake improvements in the distressed area; and

  (5) other standards and criteria that the Secretary considers relevant, including standards established for other State or federal programs.

#### Section 4-222

(a) A project qualifies as a solar energy project if it:

  (1) is an addition, alteration, or improvement to a residential building or a commercial building; and

  (2) is designed to reduce the energy requirements of the building by using:

    (i) wind energy;

    (ii) energy from a wood-burning appliance; or

    (iii) solar energy of:

      (1) the active type based on mechanically forced energy transfer;

      (2) the passive type based on convective, conductive, or radiant energy transfer; or

      (3) a combination of these types.

(b) A solar energy project may include:

  (1) a solar process heat device;

  (2) a solar electric device; and

  (3) an earth-sheltered building in which the sheltering substantially reduces the consumption of energy by the building.

(c) A solar energy project may not include a fireplace, unless the fireplace is an integral part of a system designed to use passive solar energy.

#### Section 4-223

(a) A project qualifies as a business project if the project is:

  (1) located in:

    (i) an area designated as a priority funding area under Sec. 5-7B-02 of the State Finance and Procurement Article; or

    (ii) a qualified opportunity zone designated under Sec. 1400Z-1 of the Internal Revenue Code in Allegany County, Baltimore City, Baltimore County, Charles County, Garrett County, Howard County, Montgomery County, Prince George's County, Somerset County, or Wicomico County; and

  (2)

    (i) acquired, owned, developed, constructed, reconstructed, rehabilitated, or improved by a person or an entity for the purposes of carrying on a business whether or not for profit; or

    (ii) eligible for funding from the Neighborhood Business Development Fund under Sec. 6-310 of this article.

(b) Repayment of principal and interest for a business project may be secured by:

  (1) real property;

  (2) personal property;

  (3) bank accounts;

  (4) certificates of deposit, stocks, and bonds;

  (5) credit enhancement, assurance, or guaranty; or

  (6) any other collateral acceptable to the Administration.

(c) Financial assistance for a business project may be provided as:

  (1) a loan;

  (2) a reduction in the principal obligation of or interest rate on a loan or portion of a loan;

  (3) a prepayment of interest on a subordinate or superior loan or portion of a loan;

  (4) an assurance;

  (5) a guarantee or other form of credit enhancement; or

  (6) a promissory note that may be converted to an equity ownership interest and liquidated at the earliest opportunity to realize the highest market value for the Administration.

#### Section 4-225

(a) The Administration shall administer a program of financial assistance for:

  (1) community development projects;

  (2) energy conservation projects;

  (3) home improvement projects;

  (4) public purpose projects;

  (5) solar energy projects;

  (6) special housing facilities; and

  (7) business projects.

(b) The Administration shall provide financial assistance for projects and facilities under this section with money that the Administration can get for them from any source, including:

  (1) payments under federal law;

  (2) bonds or notes issued by the Administration;

  (3) bonds or notes issued by the State; and

  (4) mortgage-backed securities and proceeds of investments in them.

(c) A loan for a home improvement project having a principal balance exceeding $5,000 shall be secured by a mortgage.

(d) Subject to an agreement with noteholders or bondholders, the Administration may consent that a loan, loan commitment, or agreement to which the Administration is a party be modified as to:

  (1) the interest rate;

  (2) the time of payments of an installment of principal or interest;

  (3) security; or

  (4) any other term.

#### Section 4-226

(a)

  (1) In connection with property on which it holds a mortgage, the Administration may:

    (i) foreclose on the property;

    (ii) begin an action to protect or enforce a right conferred on the Administration by law or any agreement;

    (iii) bid for and purchase the property at a foreclosure or other sale; and

    (iv) acquire and take possession of the property.

  (2) In an action under this subsection, the Administration may:

    (i) complete, administer, and pay the principal of and interest on an obligation incurred in connection with the property; and

    (ii) dispose of and otherwise deal with the property, so as to protect the interests of the Administration.

(b)

  (1) This subsection does not apply to a lien held in connection with a public purpose project.

  (2) The Administration may not lend money on the security of property unless the lien on the property is superior to all other liens, except for:

    (i) a lien for taxes owed to the State or a political subdivision; or

    (ii) an earlier mortgage lien.

(c)

  (1) At public or private sale and with or without public bidding, the Administration may sell a mortgage or other obligation that the Administration holds.

  (2) The Administration may retain the servicing rights and charge servicing fees for any mortgage or other obligation the Administration sells.

#### Section 4-227

(a) The Administration shall coordinate the promotion of its programs of financial assistance for energy conservation projects with the energy conservation promotion programs of the Maryland Energy Office.

(b)

  (1) The Administration shall adopt regulations to establish and implement programs of financial assistance for energy conservation projects and solar energy projects.

  (2) These regulations shall be consistent with the provisions of this subtitle that generally concern the powers of the Administration to award financial assistance for energy conservation projects and solar energy projects.

(c) The regulations shall include provisions about:

  (1) eligibility and application requirements;

  (2) interest rates, maximum loan amounts, and the terms of loans;

  (3) allocations of money among classes of eligible buildings;

  (4) credit and underwriting requirements; and

  (5) warranties, representations, forms of security, certifications, inspections, audits, and any other means of ensuring compliance with and enforcing the terms of financial assistance awarded under this subtitle.

#### Section 4-228

(a) To finance infrastructure projects, the Administration may:

  (1) make, purchase, and participate in making loans;

  (2) purchase local obligations issued to finance such projects; and

  (3) provide any other form of financial assistance other than grants.

(b) All transactions under subsection (a) of this section shall be evidenced by instruments containing the terms and conditions necessary to secure payment of all obligations and charges due to the Administration.

(c) Subject to an agreement with holders of its bonds, notes, or other obligations, the Administration may consent that a loan, local obligation, commitment, instrument, or agreement that the Administration holds or to which it is a party may be modified as to:

  (1) interest rate;

  (2) time of payment of any installment of principal or interest;

  (3) security; or

  (4) any other term.

(d)

  (1) In connection with any security that it receives or owns, including a local obligation, the Administration may:

    (i) sue to protect or enforce its rights under any law or agreement; or

    (ii) acquire or take possession of the security.

  (2) If the Administration begins such an action, it may:

    (i) administer the security;

    (ii) pay the principal and interest on any obligation incurred in connection with the security;

    (iii) dispose of the security; and

    (iv) otherwise deal with the security so as to protect the Administration's interests.

(e) The Administration may sell a loan, agreement, local obligation, or other obligation that it holds at public or private sale with or without public bidding.

#### Section 4-229

(a)

  (1) If the Administration purchases a local obligation, the procedures and requirements for the issuance or sale of the local obligation shall be as provided in Sec.Sec. 4-230 through 4-233 of this subtitle.

  (2) Notwithstanding any other public general law or public local law, charter, or ordinance, an issuer of a local obligation may sell a local obligation to the Administration to finance an infrastructure project:

    (i) at private or public sale, with or without public bidding;

    (ii) without limitation on the denomination of the local obligation; and

    (iii) at any interest rate, cost, or price that the issuer considers necessary or desirable.

  (3) The issuer of a local obligation may pay any fee or charge necessary for the Administration to:

    (i) sell bonds, notes, or other obligations of the Administration;

    (ii) provide the financial assistance authorized by Sec. 4-228 of this subtitle;

    (iii) provide any other guarantee, credit enhancement, or additional security for a note, bond, or obligation of the Administration; or

    (iv) insure obligations of the issuer or of the Administration.

(b)

  (1) Notwithstanding any other public general law, public local law, charter, or ordinance, to enhance the security or the marketability of the bonds, notes, or obligations of the Administration that are sold to finance an infrastructure project:

    (i) a political subdivision may agree with the Administration to pledge any money, including a share of income tax, that the political subdivision is entitled to receive from the State; and

    (ii) if a political subdivision is a county, the county may agree with the Administration to pledge, on behalf of a municipal corporation located in the county, any money, including a share of income tax, that the county is entitled to receive from the State.

  (2) In accordance with a pledge under paragraph (1) of this subsection, the Comptroller and the State Treasurer shall cause the money pledged to be paid to the Administration or a trustee that the Administration designates.

#### Section 4-230

(a)

  (1) Notwithstanding any other public general law, or public local law, charter, or ordinance, a political subdivision or a governmental unit of a political subdivision may issue a local obligation to be purchased by the Administration for infrastructure projects.

  (2) A local obligation shall be issued in accordance with this section.

  (3) Each local obligation must be authorized by resolution or ordinance of the governing body of the issuer.

(b)

  (1) Before a local obligation is issued under this section:

    (i) the issuer shall publish a notice of the proposed issuance in a newspaper of general circulation in the jurisdiction of the issuer; and

    (ii) the governing body of the issuer shall hold a public hearing on the proposed issuance.

  (2) The notice shall include the proposed amount of the issue, the nature of the infrastructure project to be financed, the time and place of the public hearing, and the name and address of the governing body where written comments may be sent.

#### Section 4-231

(a) A resolution or ordinance that authorizes a local obligation shall contain:

  (1) a statement of the public purpose for which the proceeds of the local obligation are to be spent;

  (2) the form of the local obligation, including:

    (i) each place and time of payment;

    (ii) each interest rate or maximum interest rate;

    (iii) the titles of the officials whose signatures shall be on it;

    (iv) a reference to this part as the authority for issuing it; and

    (v) the taxes or special revenues from which the principal and interest will be payable;

  (3) a provision for the disposition of the proceeds of sale of the local obligation;

  (4) a provision that the principal and interest shall be payable to the Administration or its designee;

  (5) a provision for payment of the principal and interest that specifies each source of payment;

  (6) a provision that the local obligation is a valid and binding obligation of the issuer in accordance with its terms even if an official whose signature appears on the local obligation:

    (i) ceases to be an official before the local obligation is delivered; or

    (ii) becomes an official after the date of the issue; and

  (7) any other provision that is not inconsistent with this subsection and that the governing body of the issuer considers appropriate, including a provision that:

    (i) the chief elected official of the issuer may modify the forms adopted by the resolution or ordinance without altering the substance of the forms;

    (ii) the official signatures and seals to be affixed to a local obligation may be imprinted in facsimile, except for the signature of the clerk or secretary of the issuer, which shall be affixed manually;

    (iii) subject to terms that the Administration specifies, if the local obligation contains a statement of redemption provisions that is acceptable to the Administration all or a portion of a local obligation is redeemable at the option of the issuer at any time before maturity at the price, at or above the par value of the local obligation, that is acceptable to the Administration and set in the enabling resolution or ordinance; and

    (iv) a local obligation may be in any denomination that is acceptable to the Administration and shall be in fully registered form.

(b) A provision under subsection (a)(5) of this section is a covenant binding the issuer to provide the money from the specified source or sources when principal and interest become due and payable.

(c)

  (1) A local obligation that an issuer issues under this part shall have all the attributes of a negotiable instrument under Sec. 19-224 of the Local Government Article.

  (2) The principal of and interest on a local obligation in the hands of its owner are exempt from taxation by the State or a political subdivision.

#### Section 4-232

(a)

  (1) Each ordinance or resolution enacted under this section:

    (i) shall be adopted by the governing body of the issuer;

    (ii) shall be approved by the chief executive officer, if any, of the issuer; and

    (iii) shall have the force of law.

  (2) Except as provided in subsection (b) of this section, an ordinance, a resolution, or the question of the issuance of local obligations authorized by an ordinance or resolution need not be submitted to a referendum of the qualified voters of the issuer.

(b) The qualified voters of a political subdivision may petition to referendum an ordinance or resolution that authorizes the issuance of local obligations, if:

  (1) the charter of the political subdivision authorizes the voters to do so; and

  (2) the petition is filed not later than 20 days after the ordinance or resolution is adopted by the governing body of the political subdivision.

(c) An ordinance or resolution authorizing the issuance of local obligations:

  (1) may be adopted at the public hearing required under Sec. 4-230(b) of this subtitle or at another regular or special session of the governing body; and

  (2) shall be effective on the date adopted and approved.

#### Section 4-232.1

(a) Each issuance by a municipal corporation of a local obligation under Sec. 4-230 of this subtitle may be secured by a pledge from the county in which the municipal corporation is located.

(b) To secure a local obligation under Sec. 4-230 of this subtitle, a county may pledge on behalf of a municipal corporation located in the county:

  (1) the faith and credit of the county; or

  (2) specific revenue of the county.

(c)

  (1) A pledge by a county under this section shall be authorized by an ordinance or a resolution of the county.

  (2) Each ordinance or resolution enacted under this section shall:

    (i) be adopted by the governing body of the county;

    (ii) be approved by the chief executive officer, if any, of the county; and

    (iii) have the force of law.

(d)

  (1) Subject to paragraph (2) of this subsection, if a local obligation is secured under this section by a pledge of the faith and credit of a county to make prompt payment from the tax and other revenues described in the enabling resolution or ordinance:

    (i) the pledge is a covenant to levy taxes sufficient to pay the principal of and interest on the local obligation when due:

      (1) on all real and tangible personal property that is within the corporate limits of the county and subject to assessment for unlimited ad valorem taxation; and

      (2) in each year in which the local obligation is outstanding; and

    (ii) if at the time of issuance of a local obligation there is a charter or statutory limit on the power of the county to levy property taxes, the pledge is a covenant to levy ad valorem taxes, within that limit, sufficient to pay the principal of and interest on the local obligation:

      (1) on all real and tangible personal property that is within the corporate limits of the county and subject to assessment for ad valorem taxation; and

      (2) in each year in which the local obligation is outstanding.

  (2)

    (i) A county may not make a pledge under this section if the pledge would cause the county to exceed any limit set, by the charter of the county or by statute, on the power of the county to make the pledge.

    (ii) Notwithstanding subparagraph (i) of this paragraph, a limit on the power of a county to make a pledge that is imposed after the issuance of a local obligation that is secured by a pledge under this section does not affect that local obligation.

(e) If a local obligation is secured under this section by a pledge of specific revenue of a county, the specific revenue of the county may include:

  (1) payments to the issuer from the State or federal government;

  (2) special benefit assessments, taxes, fees, or service charges that the county has authority to impose, levy, or charge; and

  (3) revenue of the county expected to be generated by the infrastructure project to be financed.

#### Section 4-233

(a) Each issuance of a local obligation under Sec. 4-230 of this subtitle shall be secured by, at the discretion of the Administration, a pledge of the faith and credit of the issuer or a pledge of specific revenue of the issuer or the facility being financed as designated and described in the authorizing ordinance or resolution.

(b) If a local obligation is secured by a pledge of the faith and credit of the issuer to make prompt payment from the tax and other revenues described in the enabling resolution or ordinance:

  (1) the pledge is a covenant to levy taxes sufficient to pay the principal of and interest on the local obligation when due:

    (i) on all real and tangible personal property that is within the issuer's corporate limits and subject to assessment for unlimited ad valorem taxation; and

    (ii) in each year in which the local obligation is outstanding;

  (2) if at the time of issuance of a local obligation there is a charter or statutory limit on the power of the issuer to levy property taxes, the pledge is a covenant to levy ad valorem taxes, within that limit, sufficient to pay the principal of and interest on the local obligation:

    (i) on all real and tangible personal property that is within the issuer's corporate limits and subject to assessment for ad valorem taxation; and

    (ii) in each year in which the local obligation is outstanding;

  (3) a local obligation may not be issued if the issuance would cause the issuer to exceed any limit set by the charter of the issuer or by statute on the power of the issuer to incur indebtedness; and

  (4) notwithstanding item (3) of this subsection:

    (i) a limit on the power to incur indebtedness imposed after the issuance of a local obligation does not affect that obligation; and

    (ii) outstanding local obligations of an issuer are not affected by the issuance of a new local obligation if the new obligation is consistent with an increase in or the elimination of a limit on the power to incur indebtedness.

(c)

  (1) An issuer of a local obligation under Sec. 4-230 of this subtitle may secure payment by the pledge of specific revenues of the issuer.

  (2) If a local obligation issued under Sec. 4-230 of this subtitle is secured by the pledge of specific revenue, the specific revenue may include:

    (i) payments to the issuer from the State or federal government;

    (ii) special benefit assessments, taxes, fees, or service charges that the issuer has authority to impose, levy, or charge; or

    (iii) revenue expected to be generated by the facility to be financed.

#### Section 4-233.1

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Capital reserve fund" means a reserve fund created under this section.

  (3) "Minimum capital reserve requirement" means the minimum capital reserve amount established by the Administration for a capital reserve fund in connection with the issuance of bonds, notes, or other obligations of the Administration in connection with the financing of one or more infrastructure projects.

(b) The Administration may establish one or more capital reserve funds in connection with the financing of one or more infrastructure projects.

(c) Money in a capital reserve fund shall be used solely to pay the principal of, and premium and interest on, the bonds, notes, or other obligations of the Administration:

  (1) secured by the capital reserve fund; and

  (2) issued in connection with financing infrastructure projects.

(d) A capital reserve fund may consist of:

  (1) money appropriated in the State budget for the purposes of the capital reserve fund;

  (2) proceeds of a sale of bonds, notes, or other obligations of the Administration or the State;

  (3) investment earnings of the capital reserve fund; and

  (4) any other money from any other source accepted for the benefit of a capital reserve fund.

(e)

  (1) If the balance of a capital reserve fund is less than the minimum capital reserve requirement established by the Administration for that fund, the Administration:

    (i) may not use money from the fund for the optional purchase or redemption of a bond, note, or other obligation of the Administration; and

    (ii) shall replenish the fund from available operating revenue generated by infrastructure projects or funds provided by the State.

  (2) If available operating revenue generated by infrastructure projects and funds provided by the State are insufficient to replenish a capital reserve fund as required under paragraph (1) of this subsection, the Administration shall request that the Comptroller advance the contingent funding to replenish the capital reserve fund as provided in the Local Government Infrastructure Financing Program Capital Reserve Fund Loan of 2009 (Chapter 719 (S.B. 932/H.B. 1330) of the Acts of the General Assembly of 2009) or any other bond bill enabling act for this purpose.

(f)

  (1) Except as provided in paragraph (2) of this subsection, the Administration may not issue bonds, notes, or other obligations secured in whole or in part by a capital reserve fund if on issuance the amount in the capital reserve fund will be less than the minimum capital reserve requirement.

  (2) The limitation under paragraph (1) of this subsection does not apply if at the time of issuance an amount is deposited in the capital reserve fund so that on issuance the total amount in the capital reserve fund will be at least equal to the minimum capital reserve requirement.

#### Section 4-234

(a) In this section, "government-sponsored enterprise" means the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank, or other agency or instrumentality of or chartered by the federal government that has similar powers.

(b)

  (1) To finance community development projects, public purpose projects, or residential mortgage loans, the Administration may purchase or issue securities that are backed by mortgage loans and guaranteed by the Government National Mortgage Association or a government-sponsored enterprise.

  (2) To finance business projects, the Administration may purchase or issue securities that are backed by loans or other obligations.

(c)

  (1) Notwithstanding inconsistent provisions of this subtitle relating to bonds or notes that the Administration purchases or issues, the issuance, terms, and conditions of a security that the Administration issues under this section may be as the Administration finds necessary or desirable for guaranty by:

    (i) the Government National Mortgage Association or a government-sponsored enterprise, for projects or loans described under subsection (b)(1) of this section; or

    (ii) the Maryland Housing Fund, a private entity, or a government-sponsored enterprise, for projects described under subsection (b)(2) of this section.

  (2) Except as provided by paragraph (1) of this subsection, the provisions of this subtitle that relate to bonds or notes issued by the Administration apply to securities purchased or issued under this section.

#### Section 4-235

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Mortgage loan" includes a loan to:

    (i) finance or refinance the purchase of stock or membership in a cooperative ownership housing corporation; or

    (ii) rehabilitate units in a cooperative ownership housing corporation.

  (3) "Reverse equity mortgage loan" includes a loan that uses the equity in a home as collateral.

(b)

  (1) The Administration may make, participate in making, and undertake a commitment for:

    (i) a residential mortgage loan to a family of limited income:

      (1) for a family that has a disabled family member who will reside in the dwelling;

      (2) for an emergency housing need as determined by the Secretary;

      (3) for settlement and down payment costs; or

      (4) that is made in conjunction with a loan funded with State appropriated funds if the State appropriated funded loan comprises at least 20% of the total amount loaned;

    (ii) financial assistance to a family of limited income:

      (1) for maintaining or modifying its existing residential mortgage loan; or

      (2) that is made in conjunction with a new residential mortgage loan to enable a homeowner to refinance an existing residential mortgage loan;

    (iii) the refinancing of a residential mortgage loan of a homeowner if the loan was made by the Department or Administration; and

    (iv) financial assistance to a homeowner for:

      (1) purchasing the homeowner's primary residence and making payments on the homeowner's student loan debt; or

      (2) making payments on the homeowner's student loan debt in conjunction with the homeowner obtaining separate financial assistance from a source other than the Administration for purchasing the homeowner's primary residence.

  (2) The Secretary shall determine the terms and qualifications for financial assistance under paragraph (1) of this subsection.

(c)

  (1) In accordance with Sec. 4-213 of this subtitle, the Administration may make, participate in making, purchase, and undertake a commitment for:

    (i) a mortgage loan or other financial assistance secured by a mortgage lien for a community development project or public purpose project; and

    (ii) a reverse equity mortgage loan secured by a mortgage lien that is for housing related expenses of an elderly household that qualifies as a family of limited income.

  (2) Financial assistance to purchase a dwelling unit in a community development project or public purpose project under paragraph (1)(i) of this subsection may include a temporary loan or advance and a permanent direct mortgage loan to a family of limited income, if otherwise required by law.

  (3) Housing related expenses under paragraph (1)(ii) of this subsection include personal expenses that enable the owner to continue to occupy the owner's home.

(d)

  (1) A commitment, mortgage, bond, or secured note shall contain terms and conditions necessary to secure repayment of its loan, the interest on it, and other charges in connection with the loan.

  (2)

    (i) Except as provided in subparagraph (ii) of this paragraph, a mortgage loan for a community development project or a public purpose project and a reverse equity mortgage loan may bear interest at a rate or rates that the Administration finds will make the project economically feasible.

    (ii) The Administration may not increase the interest rate originally charged on a permanent direct mortgage loan to a family for the purchase of a dwelling unit in a community development project or a public purpose project.

  (3) Subject to any agreement with noteholders or bondholders, the Administration may consent to the modification of the interest rate, time of payment of any installment of principal or interest, security, or any other term, of a mortgage, mortgage loan, reverse equity mortgage loan, mortgage loan commitment, or reverse equity mortgage loan commitment, contract, or agreement to which the Administration is a party.

(e) In connection with property on which it holds a mortgage loan or reverse equity mortgage loan:

  (1) the Administration may:

    (i) foreclose on the property or begin an action to protect or enforce a right that is conferred on the Administration by law, a mortgage contract, or other agreement;

    (ii) bid for and purchase the property at a foreclosure or other sale; or

    (iii) acquire or take possession of the property; and

  (2) in a manner to protect the interests of the Administration, the Administration may:

    (i) complete, administer, and pay the principal of and interest on an obligation incurred in connection with the property;

    (ii) dispose of the property; and

    (iii) otherwise deal with the property.

(f)

  (1) This subsection does not apply to a lien held in connection with a public purpose project.

  (2) The Administration may not lend money on the security of property unless the lien on the property is superior to all other liens, except for:

    (i) liens for taxes owed to the State or a political subdivision; or

    (ii) earlier mortgage liens.

(g) The Administration may:

  (1) sell any mortgage or other obligation that it holds, at public or private sale, with or without public bidding; and

  (2) retain the servicing rights and charge servicing fees for any mortgage or other obligation the Administration sells.

(h) The Administration may purchase securities backed by mortgages to provide financial assistance to community development projects and public purpose projects and to finance residential mortgage loans with the proceeds of the securities or with investment earnings on the securities.

#### Section 4-236

In carrying out this section and Sec.Sec. 4-237 through 4-241 of this subtitle, the Administration may not make a loan to a mortgage lender or purchase a mortgage loan from a mortgage lender unless the mortgage lender is:

(1) a bank, trust company, savings institution, savings and loan association, national bank association, mortgage banker, or other financial institution that:

  (i) has an office in the State; and

  (ii) makes or originates residential mortgage loans;

(2) an insurance company authorized to do business in the State; or

(3) the Maryland Home Financing Program.

#### Section 4-237

(a) The Administration may:

  (1) purchase or commit to purchase, from a mortgage lender that is eligible under Sec. 4-236 of this subtitle, a note, mortgage, or partial interest in a note or mortgage that evidences:

    (i) a residential mortgage loan to a family of limited income;

    (ii) a mortgage loan to a sponsor of a community development project or a public purpose project;

    (iii) a residential mortgage loan to a homeowner for the purchase or rehabilitation of the homeowner's primary residence if the primary residence is located in a sustainable community;

    (iv) a residential mortgage loan for the refinancing of a residential mortgage loan made by the Department or Administration; or

    (v) a residential mortgage loan to a homeowner for:

      (1) purchasing the homeowner's primary residence and making payments on the homeowner's student loan debt; or

      (2) purchasing the homeowner's primary residence in conjunction with the homeowner obtaining separate financial assistance from the Administration for making payments on the homeowner's student loan debt;

  (2) make a loan to an eligible mortgage lender in accordance with this subtitle;

  (3) finance, with proceeds of its revenue bonds or notes, all or part of a mortgage purchase program or a loan to a mortgage lenders program; and

  (4) take any action necessary or convenient to carry out this subsection, including:

    (i) settling or compromising an obligation or debt to the Administration, subject to any agreement with bondholders;

    (ii) acquiring an interest in real or personal property by gift, purchase, foreclosure, or otherwise, and selling or otherwise disposing of the property;

    (iii) obtaining insurance against loss in connection with its property and other assets, including mortgage loans, in the amount and from the insurer that the Administration considers desirable;

    (iv) contracting for servicing of a mortgage loan or an interest in a mortgage loan that the Administration holds or takes as collateral; and

    (v) making a contract or commitment that relates to the exercise of any of the powers listed in this subsection.

(b) The Administration may adopt regulations or program directives, as appropriate, to carry out this section, including:

  (1) procedures to submit requests for the purchase or sale of mortgage loans or for loans to the eligible mortgage lenders;

  (2) restrictions as to the number of family units, locations, or other qualifications or characteristics of dwellings to be financed by residential mortgage loans;

  (3) restrictions as to:

    (i) the interest rates on loans made from the proceeds of purchases of mortgage loans or from the proceeds of loans to eligible mortgage lenders; or

    (ii) returns realized by eligible mortgage lenders;

  (4) restrictions on maturities and other terms of loans made from the proceeds of purchases of mortgage loans or from the proceeds of loans to eligible mortgage lenders;

  (5) requirements as to the application by eligible mortgage lenders of the proceeds of the purchases or loans;

  (6) schedules of fees and charges necessary to provide for expenses and reserves of the Administration;

  (7) standards for allocating money among areas of the State and among eligible mortgage lenders; and

  (8) provisions on warranties, representations, certifications, rights of inspection and audit, program sanctions, and other methods of ensuring compliance with the terms of purchase commitments and loans.

#### Section 4-238

(a)

  (1) New mortgage loans that the Administration purchases shall be loans to:

    (i) families of limited income;

    (ii) sponsors of community development projects; or

    (iii) homeowners:

      (1) with primary residences located in sustainable communities;

      (2) who refinance a residential mortgage loan made by the Department or Administration; or

      (3) who use the loan proceeds to:

      (A) purchase the homeowner's primary residence and make payments on the homeowner's student loan debt; or

      (B) purchase the homeowner's primary residence in conjunction with the homeowner obtaining separate financial assistance from the Administration for making payments on the homeowner's student loan debt.

  (2) A commitment that the Administration makes to purchase new mortgage loans shall specify:

    (i) the interest rate on loans eligible for purchase, which may not exceed the prevailing interest rate on comparable mortgage loans available in the State, independent of public assistance or purchase; and

    (ii) the numbers or volumes of loans under the commitment to be made in specific geographic areas.

  (3) For any residential mortgage loans to be used to acquire homes for families of limited income, the commitment shall be limited to loans of a specified amount per dwelling unit, based on the current average sale price of new homes in the area, as determined by the Administration.

(b) A commitment that the Administration makes to purchase existing mortgages shall require that the proceeds of the purchase be:

  (1) reinvested, within specified time limits, in new mortgage loans to:

    (i) families of limited income; or

    (ii) sponsors of community development projects; or

  (2) invested in short-term obligations pending the purchase or making of the mortgages.

#### Section 4-239

(a)

  (1) A loan from the Administration to an eligible mortgage lender shall require the eligible mortgage lender to make mortgage loans in principal amounts that add up to at least the amount of the loan from the Administration to:

    (i) families of limited income; or

    (ii) sponsors of community development projects.

  (2) After receiving the loan from the Administration, the eligible mortgage lender shall commit the amount of the mortgage loans required by paragraph (1) of this subsection within the time the Administration sets.

(b)

  (1) A loan from the Administration to a mortgage lender is a general obligation of the mortgage lender as to repayment of principal and interest.

  (2) Repayment of principal and interest shall be secured by a pledge of and lien on collateral security in an amount that the Administration by regulation determines to be necessary to secure the loan.

(c)

  (1) The collateral security shall consist of:

    (i) obligations of or guaranteed by the United States, the State, or a political subdivision;

    (ii) obligations issued by a unit of the federal government that are satisfactory to the Administration;

    (iii) certificates of deposit, time deposits, or similar banking arrangements secured by obligations of or guaranteed by the United States or the State;

    (iv) mortgages insured or guaranteed entirely or partly by the Maryland Housing Fund, a unit of the federal government, or a private insurer that the Administration approves; or

    (v) other mortgages that the Administration finds to be of reasonably comparable security.

  (2) The Administration shall require that:

    (i) the collateral be held by a bank or trust company as independent custodian; or

    (ii) the mortgage lender enter into a security agreement containing provisions that the Administration considers necessary to identify, maintain, and service the collateral.

(d)

  (1) The security agreement shall:

    (i) provide that the mortgage lender:

      (1) holds the collateral as an agent for the Administration; and

      (2) is accountable as the trustee of an express trust for the application and disposition of the collateral; and

    (ii) require that the income from the collateral be applied only in accordance with the agreement.

  (2) A copy of each security agreement shall be filed with the Secretary of State.

  (3) Further filing or other action under the Commercial Law Article or any other law of the State is not required to perfect the security interest of the Administration in the collateral or its proceeds or in any addition to or substitution for the collateral or its proceeds.

  (4) Once filed, liens and trusts created for the benefit of the Administration under this subsection are binding against each person with a claim against the mortgage lender.

  (5) The Administration may establish additional requirements for pledging, assigning, setting aside, or holding the collateral, and making substitutions for or additions to it, and disposing of interest and income from it.

  (6) Notwithstanding any other law, a loan to a mortgage lender and the collateral for it are not subject to Sec.Sec. 17-101 and 17-102 of the Local Government Article or to Sec. 6-202, Sec. 6-205, Sec. 6-206, Sec. 6-209, or Sec. 6-210 of the State Finance and Procurement Article.

#### Section 4-240

(a) Except as provided in subsection (c) of this section, a mortgage lender shall make a certificate under this section for every residential mortgage loan that the lender makes under a purchase commitment by the Administration with:

  (1) the proceeds of purchase of a mortgage loan by the Administration; or

  (2) the proceeds of a loan from the Administration.

(b) The certificate shall state that in the mortgage lender's opinion, based on information given by the mortgagor and on the lender's knowledge of the prevailing terms and standards of mortgage lending in the area, the mortgagor could not get a mortgage loan on the property in the unassisted private lending market.

(c) The Secretary may waive the requirement for the mortgage lender's certificate for a residential mortgage loan to a homeowner:

  (1) if the homeowner's primary residence is located in a sustainable community, for the purchase or rehabilitation of the homeowner's primary residence;

  (2) for the refinancing of a residential mortgage loan of the homeowner if the loan was made by the Department or Administration; or

  (3) for either of the purposes specified in Sec. 4-237(a)(1)(v) of this subtitle.

#### Section 4-241

Except as required to qualify for insurance or guaranty by the federal government, a residential mortgage loan may not be assigned to or assumed by a person not qualified under the appropriate Administration program if the residential mortgage loan is:

(1) a new loan that the Administration purchases or in which the Administration purchases an interest;

(2) a loan made with the proceeds of purchase by the Administration of a residential mortgage; or

(3) a loan made with the proceeds of a loan from the Administration to a mortgage lender.

#### Section 4-242

In providing financial assistance to a homeowner that includes the purchase of the homeowner's primary residence and payments on the homeowner's student loan debt, the Administration shall give priority to selling residential property that is owned by the Administration. 

#### Section 4-244

(a) The Administration may provide financial assistance, meet any development cost, or carry out any other of its purposes by spending:

  (1) money appropriated by the General Assembly;

  (2) the proceeds of a State loan to the extent provided by the General Assembly or a governmental unit authorized to issue bonds;

  (3) the proceeds of the bonds, notes, or other evidences of indebtedness that the Administration issues, payable solely from revenues of the Administration as provided in this part; or

  (4) any other money available to the Administration for community development under this subtitle:

    (i) from its own operations;

    (ii) from investment of the proceeds of its bonds, notes, or other indebtedness; or

    (iii) from any other public or private source.

(b)

  (1) Except as otherwise provided in a determination made under this section, the Administration shall deposit with the State Treasurer any money that it does not need to meet current expenses and obligations.

  (2) The State Treasurer shall:

    (i) credit the money to the Administration;

    (ii) invest the money as provided by statute; and

    (iii) credit earnings from the money to the Administration.

#### Section 4-245

(a)

  (1) The Administration may:

    (i) borrow money and issue bonds or notes; and

    (ii) use the proceeds or the earnings from the investment of the proceeds to provide money to:

      (1) make, purchase, or participate in making mortgage loans or other loans;

      (2) purchase securities backed by mortgage loans or other loans;

      (3) purchase local obligations;

      (4) meet any development cost; or

      (5) achieve any other purpose of the Administration.

  (2) Bonds or notes may be issued only if:

    (i) the Director, or a person that the Secretary designates, determines that the issuance is necessary to achieve one or more purposes of the Administration; and

    (ii) the Secretary approves the determination.

  (3) Without any other proceeding, action, or approval, the determination is effective when approved by the Secretary and is conclusive.

(b) For bonds or notes of any issue, the Administration has absolute discretion to determine:

  (1) the date, amount, and manner of issue, including private sale;

  (2) the date of maturity, which:

    (i) for a bond, may not be more than 50 years after the bond is issued; and

    (ii) for a note, including renewals, may not be more than 5 years after the note is originally issued;

  (3) the price to be paid, whether above, at, or below par, the interest rate to be paid, and the dates of payment;

  (4) the form, denomination, and manner of execution, which may be by facsimile;

  (5) the place of payment, which may be any bank or trust company in or out of the State;

  (6) whether they are redeemable before maturity and, if so, the terms, conditions, and prices of the redemption; and

  (7) any other matter relating to the form, terms, conditions, security, issuance, sale, delivery, replacement, and indemnification in connection with replacement or payment.

(c) A bond or note issued under this section is a negotiable instrument under State law notwithstanding any other provision of the Code or any recital in the bond or note.

(d) The manual or facsimile signature of an officer or employee of the Administration that appears on a bond, note, or coupon is valid even if the individual leaves office or employment before delivery of the bond, note, or coupon.

(e) The Administration may:

  (1) issue its bonds or notes in coupon or registered form or both; and

  (2) provide for:

    (i) registration of coupon bonds or notes as to principal only or as to both principal and interest;

    (ii) reconversion into coupon form of bonds or notes registered as to both principal and interest; and

    (iii) interchange of coupon and registered bonds or notes.

(f) A bond or note issued under this section is exempt from Sec.Sec. 8-206, 8-208, and 8-213 through 8-221 of the State Finance and Procurement Article.

(g) The Administration may issue a bond or note without:

  (1) the consent of another governmental unit of the State; or

  (2) a proceeding, or the occurrence of a condition, other than those that this section expressly requires.

(h) The Secretary and any other person executing a bond or note under this section are not personally liable or accountable because the bond or note is issued.

#### Section 4-246

(a) By written determination, the Administration may provide for the issuance of notes to renew its notes, and bonds to pay its notes or to fund or refund its bonds, whether or not the bonds to be refunded have matured, including the payment of any redemption premium and any interest accrued or to accrue on the notes or bonds to be renewed, paid, or refunded.

(b) The issuance and incidents of renewal notes and refunding bonds are governed by applicable provisions of this part.

#### Section 4-247

(a)

  (1) Bonds or notes that the Administration issues may be secured by a trust agreement between the Administration and a trustee that is in or out of the State.

  (2) A trustee shall be a trust company or a bank with trust powers.

(b) A trust agreement or a determination authorizing the issuance of bonds or notes may contain:

  (1) subject to then-existing agreements with bondholders or noteholders, provisions to secure payment of bonds or notes by pledging or assigning:

    (i) any of the revenues of the Administration;

    (ii) a mortgage that the Administration holds, a loan that the Administration has made, or security for the mortgage or loan;

    (iii) the proceeds of a bond or note of the Administration; or

    (iv) any combination of these and other assets of the Administration;

  (2) provisions to protect and enforce rights and remedies of bondholders or noteholders, and covenants stating the duties of or restrictions on the Administration;

  (3) provisions restricting the rights of bondholders or noteholders;

  (4) provisions that appoint one or more trust companies or banks with trust powers to act as depositaries of the proceeds of bonds or notes or of any revenues or money of the Administration, with any indemnifying bonds or securities required by the Administration allowed to be given or pledged by any depositary bank or trust company incorporated in the State;

  (5) provisions on the custody, safeguarding, and application of money of the Administration;

  (6) provisions on investments of money of the Administration as the Administration provides, notwithstanding Sec.Sec. 17-101 and 17-102 of the Local Government Article and Sec.Sec. 6-202, 6-205, 6-206, 6-209, and 6-210 of the State Finance and Procurement Article;

  (7) provisions that establish and control all aspects of reserves, including debt service reserves;

  (8) provisions for funding or refunding bonds or notes, including redemption premiums and interest; and

  (9) any other provisions that are reasonable and proper for the security of bondholders or noteholders.

#### Section 4-248

(a)

  (1) The interest rate or rates on and the terms of any loans and the revenues from the terms of any other assets that are financed from the proceeds of bonds or notes of the Administration, any fees that the Administration charges, and any other available revenues shall be at least sufficient to ensure repayment in full of the principal of and interest on the bonds or notes as and when due.

  (2) Any pledge that the Administration makes is valid and binding from the time the pledge is made.

(b) The lien of the pledge:

  (1) immediately attaches, without any physical delivery or further act, to revenues or property so pledged and later received by the Administration; and

  (2) is valid and binding against each person having a claim against the Administration whether or not:

    (i) the person has notice of the lien of the pledge; or

    (ii) the determination or any other instrument has been recorded or filed.

#### Section 4-249

(a) Subject to agreements with noteholders or bondholders, the Administration may purchase its notes or bonds with any money available for the purchase.

(b) The purchase price may not exceed:

  (1) the redemption price at the time of the purchase, plus accrued interest to the next interest payment date, if the note or bond is redeemable, at the time of the purchase; or

  (2) the redemption price on the first date after the purchase on which the note or bond becomes redeemable, plus accrued interest to that date, if the note or bond is not redeemable at the time of the purchase.

(c) When the Administration purchases its note or bond, the note or bond shall be canceled.

#### Section 4-250

(a) A bond or note issued by the Administration under this part is a legal and proper investment for:

  (1) a public officer, a political subdivision, or a governmental unit;

  (2) a bank, trust company, savings and loan association, investment company, or other person doing a banking business;

  (3) an insurance company, insurance association, or other person doing an insurance business;

  (4) a personal representative, guardian, trustee, or other fiduciary; or

  (5) any other person.

(b) For any purpose for which the deposit of a bond or other obligation of the State is authorized by law, a bond issued by the Administration under this part is a security that may legally and properly be deposited with and received by a public officer, a political subdivision, or a governmental unit.

#### Section 4-251

(a) A bond or note issued under this part:

  (1) is not a debt of and does not pledge the faith, credit, or taxing power of the State, the Administration, or a political subdivision; but

  (2) is payable only from the revenues and property provided for in this subtitle.

(b) Each bond or note shall state on its face the provisions of subsection (a) of this section.

#### Section 4-252

The following are exempt at all times from taxation of every kind and nature whatsoever by the State, a political subdivision, or a governmental unit of any kind:

(1) a bond or note that the Administration issues under this part;

(2) the transfer of, interest payable on, or income derived from the bond or note; and

(3) profit realized by the sale or exchange of the bond or note.

#### Section 4-253

To improve the management of debt issued under the provisions of this part or to reduce the cost of servicing the debt, the Administration may enter into interest rate exchange agreements or contracts providing for payments based on levels of or changes in interest rates.

#### Section 4-255

(a) A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Administration by an agreement relating to a loan.

(b) A person applying for a loan may not knowingly make or cause to be made a false statement or report to influence the action of the Administration on a loan application or to influence an action of the Administration affecting a loan already made.

(c) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.

### Subtitle 3. Down Payment and Settlement Expense Loan Program

#### Section 4-301

(a) In this subtitle the following words have the meanings indicated.

(b) "Eligible homebuyer" means an individual who meets the qualifications under Sec. 4-305 of this subtitle.

(c) "Fund" means the Homeownership Programs Fund.

(d)

  (1) "Homebuyer education" means instruction in preparing for homeownership, shopping for a home, getting a mortgage loan, loan closing, and life as a homeowner.

  (2) "Homebuyer education" includes housing counseling.

(e) "Program" means the Down Payment and Settlement Expense Loan Program.

(f) "Program loan" means a loan that the Department makes under this subtitle.

(g)

  (1) "Settlement expenses" means money that must be paid at the time of the purchase of real estate.

  (2) "Settlement expenses" includes:

    (i) fees and premiums for title examination, title insurance, and similar expenses;

    (ii) fees for preparing deeds, settlement statements, and other documents;

    (iii) payments owed at settlement for property taxes and hazard insurance coverage;

    (iv) escrows for future payments of taxes and hazard insurance;

    (v) fees for notarizing deeds and other documents;

    (vi) appraisal fees;

    (vii) fees for credit reports;

    (viii) transfer and recordation taxes and fees;

    (ix) fees and premiums for mortgage insurance; and

    (x) loan discount points and origination fees.

#### Section 4-302

There is a Down Payment and Settlement Expense Loan Program.

#### Section 4-303

The purpose of the Program is to provide financing for down payment and settlement expenses to enable eligible homebuyers to purchase homes.

#### Section 4-304

(a) The Department may:

  (1) charge an application fee or other fee to a Program loan applicant or lender;

  (2) purchase or make commitments to purchase Program loans made by mortgage lenders;

  (3) make contracts with third parties to make or service mortgage Program loans made for the Department;

  (4) acquire any property that secures a Program loan under this subtitle by gift, purchase, foreclosure, or otherwise, and sell or otherwise dispose of the property or an interest in the property;

  (5) delegate to a political subdivision any administrative or operational element of the Program not assigned to the Department under subsection (b) of this section;

  (6) take any other action necessary or convenient to operate the Program; and

  (7) require a political subdivision that administers its own down payment and settlement expense loan program to inform the Department of the political subdivision's homebuyer education requirements.

(b) The Department shall:

  (1) administer the Program;

  (2) attach to a Program loan the terms needed to carry out the Program;

  (3) establish eligibility standards for Program loans, considering State, regional, and county housing costs, median incomes, and household sizes;

  (4) establish guidelines to determine what parts of the down payment and settlement expenses may be covered by the Program loan; and

  (5) adopt regulations to carry out the Program.

(c) The sale or purchase of property that the Department acquires or disposes of under this section need not be approved or executed by the Board of Public Works or the Department of General Services.

#### Section 4-305

An individual qualifies as an eligible homebuyer if the individual:

(1) will purchase and occupy a single-unit principal residence and has household income not exceeding upper limits that the Secretary establishes; or

(2) will purchase and occupy a residential building with no more than four units and agrees to rent all units other than the owner's unit to households with income not exceeding upper limits that the Secretary establishes.

#### Section 4-306

The Program shall be operated with money in the Fund.

#### Section 4-307

(a) Proceeds of a Program loan shall be used only to make a down payment or pay settlement expenses for an eligible homebuyer to purchase a personal residence.

(b) A Program loan shall be secured by a mortgage lien that:

  (1) may be subordinate to other mortgage liens; and

  (2) may include terms, including deferred payment of principal and interest, that the Department considers necessary to make housing purchases affordable to eligible homebuyers.

(c) In reviewing an application for a Program loan, the Department shall:

  (1) consider the eligible homebuyer's financial resources, including savings available to make a down payment or pay settlement expenses, in relation to:

    (i) the purchase price of the home; and

    (ii) the down payment requirements of the lender; and

  (2) give high priority to eligible homebuyers of low income within the income limits established under Sec. 4-304(b)(3) of this subtitle.

(d) Notwithstanding any other law, the Department may require that Program loans become due and payable on the later sale or transfer of the property, but the Department may allow an eligible homebuyer who purchases the property to assume the Program loan.

(e) If a borrower defaults, the Department may modify the interest rate, the time or amount of payment, or any other term of a Program loan to facilitate repayment of the Program loan and to achieve the purpose of the Program.

#### Section 4-308

(a) Subject to subsection (b) of this section, a recipient of a Program loan shall complete homebuyer education that meets the requirements of the Department.

(b) The Department's homebuyer education requirements shall:

  (1) allow a Program loan recipient to use the online homebuyer education for a HUD-approved product and contact a HUD-approved counseling agency to receive a certificate; and

  (2) enable one political subdivision's certificate to be used in another political subdivision.

(c) This subtitle does not alter or preempt the authority of a political subdivision to establish homebuyer education or counseling requirements for a down payment assistance program operated by the political subdivision.

#### Section 4-309

(a)

  (1) A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Department under an agreement relating to a Program loan.

  (2) A loan applicant may not knowingly make or cause to be made any false statement or report to influence an action of the Department on a Program loan application or a Program loan already made.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.

### Subtitle 4. Rental Housing Program

#### Section 4-401

(a) In this subtitle the following words have the meanings indicated.

(b) "Fund" means the Rental Housing Fund established under Sec. 4-504 of this title.

(c) "Household of limited income" means one or more individuals who occupy the same residential dwelling unit and whose total household income does not exceed the upper income limits established by the Secretary for the Program under Sec. 4-404 of this subtitle.

(d) "Office or other commercial space conversion" means the conversion to rental housing of a building that:

  (1) is in a sustainable community as defined in Sec. 6-301 of this article;

  (2) was built more than 30 years before an application is submitted to the Department to finance the conversion;

  (3) consists of at least two floors at or above ground level; and

  (4) was last used as office or other commercial space.

(e) "Program" means the Rental Housing Program.

(f) "Rental housing project" means a project eligible for financial assistance under Sec. 4-407 of this subtitle.

#### Section 4-402

There is a Rental Housing Program.

#### Section 4-403

The purposes of the Program are to:

(1) stimulate the production and preservation of rental housing;

(2) increase and improve the supply of decent, safe, and sanitary rental housing at costs that are affordable to households of limited income;

(3) use available resources efficiently to serve the households that are in need of quality affordable housing opportunities, including families, the elderly, and persons with disabilities or special needs;

(4) support economic growth and activity by financing, in whole or in part, the construction or substantial rehabilitation of rental housing projects; and

(5) revitalize sustainable communities, as defined in Sec. 6-301 of this article, through office or other commercial space conversion.

#### Section 4-404

(a) The Department shall:

  (1) administer the Program;

  (2) adopt policies to ensure that rental housing is made available to households of limited income;

  (3) develop procedures to ensure that the projects receiving financial assistance from the Program are in compliance with applicable occupancy restrictions;

  (4) use federal and State programs to help carry out the Program; and

  (5) encourage the assistance or participation of local political subdivisions.

(b) The Secretary shall set income guidelines by considering:

  (1) the median income for the area;

  (2) the minimum income needed to afford available standard rental units in the area;

  (3) federal income guidelines, including the requirements of the Federal Low-Income Housing Tax Credit Program; and

  (4) any other relevant factor.

(c) In administering the Program under this subtitle, the Department may act either directly or through the Administration.

(d) The Department shall provide written notice and a reasonable opportunity to comment to the chief executive officer or the equivalent officer and the head or president of the legislative body of the political subdivision in which a proposed project is located.

(e) If the proposed project is located in a municipal corporation, the notice required under subsection (d) of this section shall be sent to the chief executive officer and head or president of the municipal corporation and not to the county.

#### Section 4-405

To achieve the purposes of the Program, the Department shall, from time to time, ask the State to increase or replace amounts deposited with the State Treasurer in the Fund.

#### Section 4-406

(a) The Department shall adopt regulations to carry out the Program.

(b) The regulations shall provide for:

  (1) applications for money from the Fund;

  (2) standards of eligibility, terms, and fees;

  (3) charges that shall be imposed on Program loans; and

  (4) the recapture of money of the Fund from a borrower that does not use the money in a timely manner.

#### Section 4-407

(a) A project qualifies as a rental housing project under this subtitle if:

  (1) its purpose is to acquire, construct, or rehabilitate real property or all or part of a building or improvements that will be occupied by households of limited income as provided in this subsection; and

  (2) a portion of the rental units in the project are set aside for households of lower income for the greater of:

    (i) 15 years; or

    (ii) the number of years required by federal law.

(b) The minimum number of rental units set aside under subsection (a)(2) of this section shall be the greater of:

  (1) the number that bears the same ratio to the whole number of rental units in the project as the amount of the Program loan bears to the whole financing of the undertaking; or

  (2) the number of rental units chosen by the sponsor to satisfy federal occupancy requirements, if the project receives federal low-income housing tax credits or is financed in part with government-issued, federally tax-exempt revenue bonds.

(c) Rental units restricted for occupancy to meet other federal, State, or local occupancy requirements may be counted toward the minimum number required under this section.

(d) A rental unit that continues to meet applicable federal occupancy restrictions under subsection (b)(2) of this section shall be deemed to continue to meet the applicable restrictions for purposes of this subtitle.

(e) A project qualifies as a rental housing project under this subtitle and is not subject to the income restrictions specified in this section if it will:

  (1) effect an office or other commercial space conversion into market rate rental housing; and

  (2) provide substantial economic development to a sustainable community as defined in Sec. 6-301 of this article.

#### Section 4-408

(a) The Department shall review applications for loans submitted by private or nonprofit sponsors, political subdivisions, or local housing authorities established under Division II of this article on behalf of sponsors of proposed rental housing projects.

(b) In reviewing an application for a Program loan under this subtitle, the Department shall consider:

  (1) the extent to which households of limited income will be assisted by the proposed project;

  (2) the number and percentage of households of limited income currently living in the community where the project is proposed;

  (3) the quantity, condition, and affordability of residential property in the community where the project is proposed;

  (4) the economic feasibility of the proposed project;

  (5) the degree of local government incentive and support provided to the proposed project, including contribution of land, abatement of taxes or fees, direct or indirect rental subsidies, and grants; and

  (6) any other relevant factors.

#### Section 4-409

(a) Money in the Fund may be used to make loans to an approved applicant to:

  (1) acquire, construct, or rehabilitate a rental housing project;

  (2) convert an existing building or buildings to a rental housing project; or

  (3) provide operating assistance to reduce the operating costs of a project by depositing the proceeds of the Program loan in an interest bearing account that is under the control of the Department and is used to pay the operating costs, including the principal and interest when due, on any prior mortgage loan securing the project.

(b) A Program loan may:

  (1) be secured by a mortgage lien;

  (2) be subordinate to other financing;

  (3) have an interest rate as low as zero percent;

  (4) be payable out of surplus cash;

  (5) be a deferred payment loan;

  (6) provide for an equity participation by the Department or contingent interest payable out of surplus cash or net equity; or

  (7) have any other terms the Department may require.

(c) To facilitate repayment of the Program loan and achieve the purposes of the Program, the Department may modify:

  (1) the interest rate;

  (2) the time or amount of payment; or

  (3) any other term of the Program loan.

#### Section 4-410

(a) If a Program loan is secured by a mortgage, the Department may:

  (1) enforce the mortgage;

  (2) foreclose on the mortgage and take title to the mortgaged property or take deed in lieu of foreclosure;

  (3) convey title to a purchaser;

  (4) obtain and enforce a deficiency judgment;

  (5) allow assumption of the mortgage; and

  (6) contract with a private mortgage servicer to perform on behalf of the Department any functions a servicer ordinarily performs.

(b) Without approval or execution by the Board of Public Works, the Department may:

  (1) assign a mortgage for value; or

  (2) convey property after acquisition.

#### Section 4-411

(a)

  (1) A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Department under an agreement relating to a Program loan.

  (2) A loan applicant may not knowingly make or cause a false statement or report to be made to influence the action of the Department on a Program loan application or to influence action of the Department affecting a Program loan already made.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.

### Subtitle 5. Funds

#### Section 4-501

(a)

  (1) Each fund established under this subtitle is a continuing, nonlapsing special fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold and the Comptroller shall account for each fund established under this subtitle.

(b) Money in a fund established under this subtitle shall be invested in the same way as other State money.

(c)

  (1) In the State budget, the State may appropriate to the Rental Housing Programs Fund and the Special Loan Programs Fund all or part of the money received as repayment of principal or payment of interest on a loan made by the Maryland Housing Rehabilitation Program.

  (2) The appropriation may be increased by budget amendment.

  (3) The amount of repayments appropriated to make loans under the Maryland Housing Rehabilitation Program may not exceed $12,000,000 annually.

  (4) The State may not appropriate repayment of principal and payment of interest to the Maryland Housing Rehabilitation Program to the extent that loans expected to be made with the money appropriated would cause the principal amount of loans outstanding to exceed $100,000,000.

#### Section 4-501.1

(a) The Department shall attempt to use to the greatest extent feasible minority business enterprises to provide brokerage and investment management services to the Department for the funds established under this subtitle consistent with minority business purchasing standards applicable to units of State government under the State Finance and Procurement Article and consistent with the fiduciary duties of the Department.

(b) For purposes of this section, brokerage and investment management services shall include services relating to all allocated asset classes.

(c)

  (1) To assist the Department in achieving the goal described under subsection (a) of this section, the Department shall undertake measures to remove any barriers that limit full participation by minority business enterprises in brokerage and investment management services opportunities afforded by the Department for the funds established under this subtitle.

  (2) The measures undertaken by the Department shall include the use of a wide variety of media, including the Department's website, to provide notice to a broad and varied range of potential providers about the brokerage and investment management services opportunities afforded by the Department for the funds established under this subtitle.

(d) In conjunction with the Governor's Office of Small, Minority, and Women Business Affairs, the Department shall develop guidelines to assist it in identifying and evaluating qualified minority business enterprises in order to help the Department achieve the objective for greater use of minority business enterprises for brokerage and investment management services for the funds established under this subtitle.

(e) On or before September 1 each year, the Department shall submit a report to the Governor's Office of Small, Minority, and Women Business Affairs and, subject to Sec. 2-1257 of the State Government Article, the General Assembly on:

  (1) the identity of the minority business enterprise brokerage and investment management services firms used by the Department in the immediately preceding fiscal year;

  (2) the percentage and dollar value of the assets in the funds established under this subtitle that are under the investment control of minority business enterprise brokerage and investment management services firms in each allocated asset class; and

  (3) the measures the Department undertook in the immediately preceding fiscal year in accordance with subsection (c)(2) of this section.

#### Section 4-502

(a) In this section, "Fund" means the Homeownership Programs Fund.

(b) There is a Homeownership Programs Fund.

(c) As provided in the State budget, the Department shall use the Fund to:

  (1) pay expenses of the Maryland Home Financing Program, including reserves for anticipated future losses directly related to the Maryland Home Financing Program;

  (2) make loans under the Maryland Home Financing Program; and

  (3) make loans and pay expenses of the Down Payment and Settlement Expense Loan Program.

(d) The Fund consists of:

  (1) money appropriated by the State for homeownership programs, including the Maryland Home Financing Program under Subtitle 8 of this title and the Down Payment and Settlement Expense Loan Program under Subtitle 3 of this title;

  (2) money from the sale of the State's general obligation bonds;

  (3) repayments or prepayments of principal and payments of interest on loans made under the Maryland Home Financing Program, the Homeowners' Emergency Mortgage Assistance Program, the Reverse Equity Program, or the Down Payment and Settlement Expense Loan Program, formerly the Settlement Expense Loan Program;

  (4) money transferred to the Fund in accordance with Sec.Sec. 4-503(d), 4-504(f), and 4-505(h) of this subtitle and Sec.Sec. 3-203(i) and 6-310(g) of this article; and

  (5) investment earnings of the Fund.

(e) Subject to Sec. 7-209 of the State Finance and Procurement Article and except as otherwise provided in the State budget, after the first 8 months of a fiscal year, the Department may transfer unencumbered money in the Fund to any other fund established under this title.

(f) Money received as repayment of principal or payment of interest on a loan made under the Maryland Home Financing Program that is not appropriated in the State budget may be credited to the Annuity Bond Fund and used to pay the principal of or interest on money borrowed by the State and appropriated to the Maryland Home Financing Program.

#### Section 4-503

(a) In this section, "Fund" means the Partnership Rental Housing Fund.

(b) There is a Partnership Rental Housing Fund.

(c) The Fund consists of:

  (1) money appropriated by the State to the Partnership Rental Housing Program;

  (2) money made available to the Partnership Rental Housing Program from the sale of general obligation or other bonds including the proceeds of the sale of bonds authorized by Chapter 625 of the Acts of the General Assembly of 1988 and Chapter 97 of the Acts of the General Assembly of 1989;

  (3) investment earnings of the Fund; and

  (4) repayment of loans from the Fund except to the extent any State or federal law governing the proceeds of bonds prohibits the recycling of money.

(d) Subject to the approval of the Legislative Policy Committee and Sec. 7-209 of the State Finance and Procurement Article, after the first 8 months of a fiscal year, the Department may transfer unencumbered money in the Fund among the Partnership Rental Housing Fund, the Rental Housing Programs Fund, the Homeownership Programs Fund, and the Special Loan Programs Fund, if the Secretary determines that demand is:

  (1) less than anticipated for the fund from which money is being transferred; and

  (2) greater than anticipated for the fund to which money is being transferred.

#### Section 4-504

(a) In this section, "Fund" means the Rental Housing Fund.

(b) There is a Rental Housing Fund.

(c) The Department shall use the Fund to operate, make loans, and pay expenses of the Rental Housing Program, including reserves for anticipated future losses directly related to the Rental Housing Program, as provided in the State budget.

(d) The Department shall administer the Fund either directly or through the Administration.

(e) The Fund consists of:

  (1) money appropriated by the State for the Rental Housing Program under Sec. 4-402 of this title;

  (2) repayments and prepayments of loans made under the Rental Housing Program and from loan programs under this title that have been repealed;

  (3) money appropriated under Sec. 4-501(c) of this subtitle;

  (4) money transferred to the Fund in accordance with Sec.Sec. 4-502(e), 4-503(d), and 4-505(h) of this subtitle and Sec. 3-203(i) of this article;

  (5) funds received by the Department or the Administration from the federal government or other public or private sources;

  (6) investment earnings of the Fund; and

  (7) revenue distributed to the Fund under Sec. 2-605.2 of the Tax - General Article.

(f)

  (1) When the Department issues a binding commitment to make a loan, the Department shall withdraw from the Fund an amount equal to the commitment.

  (2) Subject to Sec. 7-209 of the State Finance and Procurement Article and except as otherwise provided in the State budget, after the first 8 months of a fiscal year the Department may transfer unencumbered money in the Fund to any other fund established under this title.

#### Section 4-505

(a) In this section, "Fund" means the Special Loan Programs Fund.

(b) There is a Special Loan Programs Fund.

(c) As provided in the State budget and subject to subsection (d) of this section, the Department shall use the Fund to:

  (1) operate, pay expenses of, and make loans under the Group Home Financing Program;

  (2) operate, pay expenses of, and make grants and loans under the Lead Hazard Reduction Grant Program and the Lead Hazard Reduction Loan Program;

  (3) operate, pay expenses of, and make loans and grants under the Maryland Housing Rehabilitation Program, including reserves for anticipated future losses directly related to the Maryland Housing Rehabilitation Program;

  (4) make loans and grants under the Regular Rehabilitation Program; and

  (5) make loans and grants under the special loan programs.

(d) During the first 6 months of each fiscal year the Department shall reserve at least 25% of the appropriation for the Fund to make loans to rehabilitate buildings with four or fewer dwelling units.

(e)

  (1) The Department annually shall allocate money in the Fund to the Lead Hazard Reduction Grant Program and the Lead Hazard Reduction Loan Program.

  (2) If the number of eligible applications under the Lead Hazard Reduction Grant Program, or the Lead Hazard Reduction Loan Program is insufficient to commit all money allocated to that Program within 6 months after the allocation, the Department may reallocate the uncommitted money to other programs of the Fund.

(f) The Fund shall be administered in accordance with this section.

(g)

  (1) The Fund consists of:

    (i) money appropriated by the State for special loan programs, including:

      (1) the Special Rehabilitation Program under Sec. 4-906(b) of this title;

      (2) the Regular Rehabilitation Program under Sec. 4-906(b) of this title;

      (3) the Group Home Financing Program under Sec. 4-602 of this title;

      (4) the Lead Hazard Reduction Grant Program under Sec. 4-708 of this title and the Lead Hazard Reduction Loan Program under Sec. 4-709 of this title; and

      (5) the Accessible Homes for Senior Homeowners Grant Program under Sec. 4-931 of this title;

    (ii) repayments of principal and payments of interest on loans made under these programs;

    (iii) repayments of grants from the Fund;

    (iv) repayments of principal and payments of interest on loans from the Fund;

    (v) money transferred to the Fund in accordance with Sec.Sec. 4-502(e), 4-503(d), and 4-504(f) of this subtitle and Sec.Sec. 3-203(i) and 6-310(g) of this article; and

    (vi) investment earnings of the Fund.

  (2) The State, under Sec. 4-501(c) of this subtitle, may appropriate to the Fund money received as repayment of principal or payment of interest on a loan made by the Maryland Housing Rehabilitation Program.

(h) Subject to Sec. 7-209 of the State Finance and Procurement Article and except as otherwise provided in the State budget, after the first 8 months of a fiscal year, the Department may transfer unencumbered money in the Fund to any other fund established under this title.

#### Section 4-506

(a) In this section, "Fund" means the Workforce Housing Fund.

(b) There is a Workforce Housing Fund.

(c) As provided in the State budget, the Department shall use the Fund to operate and provide funds under the Workforce Housing Grant Program.

(d) The Fund consists of:

  (1) money appropriated by the State;

  (2) repayments of principal and payments of interest on loans made under the Workforce Housing Grant Program;

  (3) amounts paid in connection with transfers of homeownership workforce housing units;

  (4) money transferred to the Fund in accordance with this subtitle; and

  (5) investment earnings of the Fund.

#### Section 4-507

(a) In this section, "Fund" means the Housing Counseling and Foreclosure Mediation Fund.

(b) There is a Housing Counseling and Foreclosure Mediation Fund.

(c) The purposes of the Fund are to:

  (1) support nonprofit and government housing counselors and other nonprofit entities with providing:

    (i) legal assistance to homeowners or occupants who are trying to avoid foreclosure or manage foreclosure proceedings; and

    (ii) homebuyer education, housing advice, or financial counseling for homeowners, prospective homeowners, and low- and moderate-income households;

  (2) support the establishment and operation of nonprofit housing counseling entities;

  (3) support efforts by the Department and the Maryland Department of Labor to:

    (i) contact and provide advice and assistance to homeowners or occupants facing financial difficulty or foreclosure; and

    (ii) provide advice and assistance to prospective homeowners; and

  (4) assist in funding the costs of foreclosure mediations provided by the Office of Administrative Hearings under Sec. 7-105.1 of the Real Property Article.

(d) The Department shall administer the Fund.

(e)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

(f) The Fund consists of:

  (1) revenue distributed to the Fund under Sec. 7-105.1 of the Real Property Article;

  (2) investment earnings of the Fund;

  (3) money appropriated in the State budget to the Fund; and

  (4) any other money from any other source accepted for the benefit of the Fund.

(g) The Fund may be used only for the purposes described in subsection (c) of this section.

(h)

  (1) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

  (2) Any investment earnings of the Fund shall be paid into the Fund.

(i) Expenditures from the Fund may be made only in accordance with the State budget.

#### Section 4-508

(a) In this section, "Fund" means the Strategic Demolition and Smart Growth Impact Fund.

(b) There is a Strategic Demolition and Smart Growth Impact Fund.

(c) The purpose of the Fund is to provide grants and loans to assist in predevelopment activities, including interior and exterior demolition, land assembly, architecture and engineering, site development, and credit enhancement for revitalization projects in designated areas of the State.

(d) The Department shall administer the Fund.

(e)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

(f) The Fund consists of:

  (1) money appropriated in the State budget to the Fund;

  (2) repayments of loans made from the Fund;

  (3) interest earnings of the Fund; and

  (4) any other money from any other source accepted for the benefit of the Fund.

(g)

  (1) The Fund may be used only to provide grants and loans to government agencies and community development organizations for interior and exterior demolition, land assembly, architecture and engineering, site development, and credit enhancement for revitalization projects in an area designated as:

    (i) a Sustainable Community; or

    (ii) a qualified opportunity zone designated under Sec. 1400Z-1 of the Internal Revenue Code in Allegany County, Garrett County, Somerset County, or Wicomico County.

  (2)

    (i) For fiscal years 2017 through 2019, to be eligible for a grant or loan from the Fund, a government agency or community development organization shall provide evidence of a matching fund that is equal to $1 for every $4 in State funding that the agency or organization is applying for from the Fund.

    (ii) The matching fund required under subparagraph (i) of this paragraph may include:

      (1) money from the federal government, local government, or any other public or private source;

      (2) real property;

      (3) in-kind contributions; and

      (4) funds expended before the date the grant or loan is awarded.

  (3) For fiscal year 2020 and each fiscal year thereafter, to be eligible for a grant or loan from the Fund, a government agency or community development organization is not required to provide evidence of a matching fund.

  (4) The Department shall award grants and loans from the Fund on a competitive basis.

(h)

  (1) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

  (2) Any interest earnings of the Fund shall be credited to the Fund.

(i) Expenditures from the Fund may be made only in accordance with the State budget.

(j)

  (1) For fiscal year 2018, the Governor shall include in the annual budget bill or capital budget bill an appropriation of $25,625,000 from general funds or the proceeds from the sale of State general obligation bonds to the Fund, which shall be allocated as follows:

    (i) $22,125,000 for projects in Baltimore City; and

    (ii) $3,500,000 for projects throughout the State.

  (2) For fiscal year 2019, the Governor shall include in the annual budget bill or capital budget bill an appropriation of $28,500,000 from general funds or the proceeds from the sale of State general obligation bonds to the Fund, which shall be allocated as follows:

    (i) $25,000,000 for projects in Baltimore City; and

    (ii) $3,500,000 for projects throughout the State.

#### Section 4-509

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Anchor institution" means:

    (i) an institution of higher education in the State, including departments, foundations, and other entities of the institution; or

    (ii) a hospital institution in the State, including departments, foundations, and other entities of the institution, that:

      (1) has a group of at least five physicians who are organized as a medical staff for the institution;

      (2) maintains facilities to provide, under the supervision of the medical staff, diagnostic and treatment services for two or more unrelated individuals; and

      (3) admits or retains the individuals for overnight care.

  (3) "Blighted area" means an area in which a majority of buildings have declined in productivity by reason of obsolescence, depreciation, or other causes to an extent that they no longer justify fundamental repairs and adequate maintenance.

  (4) "Fund" means the Seed Community Development Anchor Institution Fund.

  (5) "Sustainable community" means an area designated as a sustainable community under Sec. 6-205 of this article.

(b) There is a Seed Community Development Anchor Institution Fund.

(c) The purpose of the Fund is to provide grants and loans to anchor institutions for community development projects in sustainable communities and blighted areas of the State.

(d) The Department shall administer the Fund.

(e)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

(f) The Fund consists of:

  (1) money appropriated in the State budget to the Fund;

  (2) interest earnings of the Fund; and

  (3) any other money from any other source accepted for the benefit of the Fund.

(g)

  (1) The Fund may be used only to provide grants and loans to anchor institutions for community development projects in sustainable communities and blighted areas of the State.

  (2) To be eligible for a grant or loan, an anchor institution shall provide evidence of matching funds.

  (3) The Department shall award grants and loans from the Fund on a competitive basis.

(h)

  (1) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

  (2) Any interest earnings of the Fund shall be credited to the Fund.

(i) Expenditures from the Fund may be made only in accordance with the State budget.

(j)

  (1) For fiscal year 2019, the Governor shall include in the annual budget bill or the capital budget bill an appropriation of $4,000,000 to the Fund.

  (2) For fiscal year 2020, the Governor shall include in the annual budget bill or the capital budget bill an appropriation of $5,000,000 for the Fund.

  (3)

    (i) For fiscal year 2021, the Governor shall include in the annual budget bill or the capital budget bill an appropriation of $5,000,000 for the Fund.

    (ii) For fiscal year 2022 and each fiscal year thereafter, the Governor shall include in the annual budget bill or the capital budget bill an appropriation of $10,000,000 for the Fund.

#### Section 4-511

(a) In this section, "Fund" means the Continuing the CORE Partnership Fund.

(b) There is a Continuing the CORE Partnership Fund.

(c) The purpose of the Fund is to assist the Department, in conjunction with the Maryland Stadium Authority, the West North Avenue Development Authority, and Baltimore City, in expeditiously removing blighted property within Baltimore City.

(d) The Secretary shall administer the Fund.

(e)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

(f) The Fund consists of:

  (1) revenue distributed to the Fund under subsection (j) of this section;

  (2) money appropriated in the State budget to the Fund; and

  (3) any other money from any other source accepted for the benefit of the Fund.

(g) The Fund may be used for:

  (1) the purpose outlined in subsection (c) of this section; and

  (2) administrative expenses.

(h)

  (1) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

  (2) Any interest earnings of the Fund shall be credited to the General Fund of the State.

(i) Expenditures from the Fund may be made only in accordance with the State budget.

(j)

  (1) For fiscal year 2020, the Governor may include in the annual budget bill an appropriation of $30,000,000 to the Fund.

  (2) For fiscal years 2021 through 2024, the Governor may include in the annual budget bill an appropriation of $25,000,000 to the Fund.

  (3) For fiscal year 2026 and each fiscal year thereafter, the Governor shall include in the annual budget bill or the capital budget bill an appropriation of $50,000,000 to the Fund.

#### Section 4-512

(a) In this section, "Fund" means the Housing Innovation Fund.

(b) There is a Housing Innovation Fund.

(c) The purpose of the Fund is to provide loans for local housing authorities, county governments, municipal corporations, and county boards of education to develop mixed-income, cross-subsidized housing, including educator workforce housing.

(d) The Department shall administer the Fund.

(e)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

(f) The Fund consists of:

  (1) money appropriated in the State budget to the Fund; and

  (2) any other money from any other source accepted for the benefit of the Fund.

(g)

  (1) Subject to paragraph (2) of this subsection and subsection (j) of this section, the Fund may be used only to provide low- or no-interest loans to local housing authorities, county governments, municipal corporations, or county boards of education partnering with housing developers through the Housing Innovation Pilot Program in accordance with Subtitle 30 of this title.

  (2) The Fund may be used for projects where a county, municipal corporation, or county board of education, in conjunction with a local housing authority or a housing developer, acquires existing private sector housing.

(h)

  (1) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

  (2) Any interest earnings of the Fund shall be credited to the General Fund of the State.

(i) Expenditures from the Fund may be made only in accordance with the State budget.

(j)

  (1)

    (i) For fiscal year 2025, an allocation to the Fund shall be committed to projects before July 1, 2026, subject to applicants being afforded a reasonable period of time to complete the application.

    (ii) For fiscal year 2026 and each fiscal year thereafter, an allocation to the Fund in a fiscal year shall be committed to projects before the end of that fiscal year, subject to applicants being afforded a reasonable period of time to complete the application.

  (2) If an allocation of funds to the Fund under paragraph (1) of this subsection has not been committed to projects before the end of the fiscal year when they were allocated, the funds shall be eligible for use in support of projects that apply to the Rental Housing Program established under Subtitle 4 of this title.

### Subtitle 6. Group Home Financing Program

#### Section 4-601

(a) In this subtitle the following words have the meanings indicated.

(b)

  (1) "Group home" means a housing facility that offers:

    (i) supportive services or supervisory personnel to individuals with special housing needs who are not related to the group home sponsor; and

    (ii) common, shared, or independent living, dining, kitchen, sanitary, and sleeping facilities.

  (2) "Group home" need not include all of the facilities listed in paragraph (1)(ii) of this subsection if it provides emergency and temporary housing for homeless individuals.

(c) "Group home sponsor" means a person who qualifies for a Program loan under Sec. 4-607 of this subtitle.

(d) "Person of lower income" means an individual or family whose income does not exceed the upper income limit that the Secretary sets.

(e) "Program" means the Group Home Financing Program.

(f) "Program loan" means a loan that the Department makes under this subtitle.

#### Section 4-602

There is a Group Home Financing Program.

#### Section 4-603

The purpose of the Program is to provide loans to group home sponsors to finance or refinance the costs of acquiring, constructing, or modifying buildings as group homes for persons of lower income, elderly households, individuals with disabilities, and other residents of the State with special housing needs.

#### Section 4-604

The Department may establish:

(1) eligibility standards for group home sponsors;

(2) Program loan fees and charges;

(3) maximum Program loans for group homes based on their size, use, and location; and

(4) a process for selecting group homes to be financed under the Program that promotes statewide distribution of money.

#### Section 4-605

The Department shall:

(1) administer the Program;

(2) adopt policies that encourage the establishment of group homes for persons of lower income throughout the State;

(3) attach to a purchase, sale, or lease of a group home or land for a group home the terms needed to carry out the Program;

(4) establish guidelines for monitoring the group homes to ensure that, aside from dwelling room for supervisory individuals and their families, group homes receiving financing under the Program are occupied in substantial part by persons of lower income; and

(5) establish guidelines to determine the ability of a group home sponsor to manage a group home, provide necessary services, and repay the Program loan.

#### Section 4-606

The Department shall adopt regulations to carry out the Program.

#### Section 4-607

To qualify for a Program loan, a group home sponsor shall own and operate a group home and be:

(1) a nonprofit organization;

(2) an individual; or

(3) a limited partnership if:

  (i)

    (1) each general partner qualifies as a nonprofit organization; or

    (2) each general partner is a wholly owned subsidiary of a nonprofit organization;

  (ii) the limited partnership is formed to undertake a group home project that is totally or partly eligible for a federal low income housing tax credit program or any other federal program or incentive; and

  (iii) a nonprofit organization manages the project or receives the net cash flow from or the residual sale proceeds on sale of the group home.

#### Section 4-608

The Program shall be operated with money in the Special Loan Programs Fund under Sec. 4-505 of this title.

#### Section 4-609

In reviewing an application for a Program loan, the Department shall consider:

(1) the economic feasibility of the group home; and

(2) the ability of the group home sponsor to manage the group home, provide necessary services, and repay the Program loan.

#### Section 4-610

(a)

  (1) A Program loan shall be secured by a mortgage lien and may include the terms that the Department considers necessary to make the group home affordable to persons of lower income.

  (2) In exceptional circumstances, the terms may include:

    (i) deferred payment of principal and interest; and

    (ii) interest rates as low as 0%.

(b) Each loan shall require that all unpaid principal and accrued interest, including principal or interest that was deferred, be paid at the earliest of:

  (1) a stated date, which may be the maturity date of the Program loan;

  (2) the date of the sale or other transfer of the group home or a controlling interest in the group home; and

  (3) the date when the project ceases to be used as a group home.

(c)

  (1) Each Program loan shall provide for:

    (i) a limit on the return on equity allowed to a group home sponsor;

    (ii) equity participation between the Department and the group home sponsor; or

    (iii) an amount of accrued and deferred interest that the Department finds can reasonably be expected to be paid from profit resulting from the sale of the group home.

  (2) The Department may forgive any accrued and deferred interest described in paragraph (1)(iii) of this subsection that exceeds the profit from the sale of the group home.

  (3) The Department may allow the group home sponsor to earn a reasonable return before the group home sponsor pays accrued and deferred interest.

(d) If a Program loan is in default or is at risk of being in default, the Department may modify the interest rate, the time or amount of payment, or any other term to facilitate repayment and achieve the purposes of the Program.

(e) A Program loan may finance:

  (1) the site acquisition, construction costs, and permanent mortgage for a group home;

  (2) the purchase of an existing building to provide a group home;

  (3) a modification to a building purchased with a Program loan, if the modification improves, repairs, renovates, or rehabilitates the building to:

    (i) make it suitable as a group home; or

    (ii) eliminate housing, building, fire, safety, health, or other code violations;

  (4) the refinancing of an existing mortgage loan on a group home;

  (5) closing costs associated with the construction, purchase, or refinance of a group home;

  (6) engineering, legal, title, survey, or architectural fees associated with financing real property development; and

  (7) other development costs that the Department considers reasonable.

#### Section 4-611

Subject to the approval and permitting procedures of the local zoning authority, a group home that houses four or more individuals may provide for nonresidential uses that:

(1) are in a minor part of the building;

(2) conform with local zoning requirements; and

(3) although not directly related to the housing facility, offer goods or services for persons of lower income or other disadvantaged individuals.

#### Section 4-612

(a)

  (1) A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Department under an agreement relating to a Program loan.

  (2) A loan applicant may not knowingly make or cause to be made any false statement or report to influence the Department's action on a Program loan application or a Program loan already made.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 2 years or a fine not exceeding $50,000 or both.

### Subtitle 7. Lead Hazard Reduction Grant Program and Lead Hazard Reduction Loan Program

#### Section 4-701

(a) In this subtitle the following words have the meanings indicated.

(b) "Child care center" has the meaning stated in Sec. 9.5-401(c) of the Education Article.

(c) "Family of limited income" means a family that meets the qualifications under Sec. 4-707 of this subtitle.

(d) "Fund" means the Special Loan Programs Fund under Subtitle 5 of this title.

(e) "Grant Program" means the Lead Hazard Reduction Grant Program.

(f)

  (1) "Lead hazard reduction activity" means measures to reduce or eliminate lead-based paint hazards in accordance with State or federal standards.

  (2) "Lead hazard reduction activity" includes:

    (i) removing lead-based paint and lead-contaminated dust, containing or encapsulating lead-based paint, and replacing or removing surfaces or fixtures painted with lead-based paint;

    (ii) meeting the risk reduction standards under Sec. 6-815 of the Environment Article or the modified risk reduction standards under Sec. 6-817 of the Environment Article;

    (iii) temporarily reducing human exposure or probable exposure to lead-based paint hazards, including specialized cleaning, repairing, maintaining, painting, temporarily containing, and ongoing monitoring of lead-based paint hazards or potential hazards;

    (iv) associated testing, preparing, cleaning, protecting workers, disposing, and post-lead hazard reduction clearance testing; and

    (v) testing an innovative or unproven method of lead hazard reduction.

(g) "Loan Program" means the Lead Hazard Reduction Loan Program.

#### Section 4-702

The General Assembly finds that:

(1) lead paint is present in a large percentage of residential properties in the State, particularly residential rental properties constructed before 1950;

(2) lead paint on the friction surfaces of windows is a leading cause of lead poisoning;

(3) lead poisoning harms the health and well-being of children and pregnant women and causes substantial long-term public costs for medical expenses and additional education; and

(4) reduction or elimination of lead in the environment will reduce:

  (i) the risk of lead poisoning of children and pregnant women;

  (ii) the incidence of learning disabilities and behavioral problems in children who live in older housing; and

  (iii) the cost of publicly financed medical care.

#### Section 4-703

The purpose of the Grant Program and the Loan Program is to make grants and loans to owners of residential property or child care centers for financing lead hazard reduction activities, especially replacing windows containing lead-based paint on friction surfaces.

#### Section 4-704

(a) The Department may establish:

  (1) loan fees and charges;

  (2) maximum loan or grant amounts for lead hazard reduction activities; and

  (3) guidelines that give financing priority to lead hazard reduction activities that include replacing windows containing lead-based paint on friction surfaces.

(b)

  (1) On application of a political subdivision, the Department may provide money from the Fund allocated to the Grant Program or the Loan Program to the political subdivision to make a grant or loan, on behalf of the Department, to an eligible owner of residential property or a child care center in the political subdivision.

  (2) The Department may limit the amount of money that a political subdivision may request under paragraph (1) of this subsection.

#### Section 4-705

The Department shall:

(1) administer the Grant Program and the Loan Program; and

(2) establish eligibility guidelines for grants and loans.

#### Section 4-706

The Department shall adopt regulations to carry out the Grant Program and the Loan Program.

#### Section 4-707

(a) An individual or family, including an elderly household, qualifies as a family of limited income if the income of the individual or family does not exceed the limits that the Secretary sets.

(b) The factors that the Secretary shall consider in setting limits under subsection (a) of this section shall include:

  (1) the family income deemed available for housing;

  (2) the size of the family;

  (3) the ability of the family to compete successfully in the private housing market;

  (4) the cost and condition of available housing; and

  (5) relevant standards and definitions under federal and State housing programs.

#### Section 4-708

(a) There is a Lead Hazard Reduction Grant Program.

(b) The Department may make a grant solely to finance a lead hazard reduction activity that:

  (1) is a program that tests innovative or unproven methods of lead hazard reduction; or

  (2) is in a residential property in an area designated by the Department to have a concentration of:

    (i) families of limited income; and

    (ii)

      (1) residential property constructed before 1950; or

      (2) children diagnosed with elevated blood lead, which is a quantity of lead in their blood, expressed in micrograms per deciliter (?g/dl), that exceeds a specified threshold level.

(c)

  (1) The Department may establish standards to determine the eligibility of a lead hazard reduction activity for a grant under the Grant Program.

  (2) The standards may call for consideration of:

    (i) the extent to which the lead hazard reduction activity benefits families of limited income;

    (ii) the need and circumstances of the owner-occupants or tenants of the residential property in which the proposed lead hazard reduction activity will be undertaken; and

    (iii) whether the grant finances research into innovative or unproven methods for lead hazard reduction.

(d) In determining whether to make a grant under the Grant Program, the Department shall require that the owner of the residential property or child care center submit evidence that the owner cannot undertake lead hazard reduction activity without a grant.

(e) The Department may require that all or part of a grant under the Grant Program be repaid when conditions specified by the Department occur.

#### Section 4-709

(a) There is a Lead Hazard Reduction Loan Program.

(b) The Department may make a loan to finance lead hazard reduction activity.

(c) A loan under the Loan Program:

  (1) may be secured by a mortgage lien or other security interest acceptable to the Department; and

  (2) may include terms that the Department considers appropriate.

(d) For a loan made under the Loan Program, the Department may:

  (1) defer payment of principal and interest; and

  (2) establish interest rates as low as 0%.

(e) Each loan shall require repayment of all unpaid principal and payment of accrued interest, including deferred interest, but the loan terms may allow the Department to forgive all or part of the principal and interest.

(f) If a loan is in default, the Department may modify the interest rate, the time or amount of payment, or any other term to facilitate repayment and achieve the purposes of the Loan Program.

#### Section 4-710

In reviewing an application for a loan or grant, the Department shall consider:

(1) the needs of the beneficiaries of the proposed lead hazard reduction activity;

(2) the capacity of the applicant to repay a loan;

(3) the overall public benefit;

(4) the impact on the surrounding neighborhood or community; and

(5) any other factor that the Department finds relevant.

#### Section 4-711

(a) In this section, "Committee" means the Lead Hazard Advisory Committee.

(b) There is a Lead Hazard Advisory Committee.

(c) The Committee consists of the following seven members:

  (1) the Secretary of Housing and Community Development, or the Secretary's designee;

  (2) the Secretary of the Environment, or the Secretary's designee;

  (3) the Secretary of Health, or the Secretary's designee; and

  (4) four members appointed by the Governor:

    (i) a member of the Lead Poisoning Prevention Commission;

    (ii) a representative of owners of residential rental property built before 1950;

    (iii) a representative of a child, youth, or health advocacy group; and

    (iv) a member of the public who has an interest in lead in the environment.

(d)

  (1) The term of an appointed member of the Committee is 4 years.

  (2) The terms of the appointed members are staggered as required by the terms provided for members of the Committee on October 1, 2005.

  (3) At the end of a term, an appointed member continues to serve until a successor is appointed and qualifies.

  (4) An appointed member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.

(e) The Secretary or the Secretary's designee is the chair of the Committee.

(f) Each member of the Committee is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

(g) In consultation with the Committee, the Department shall develop regulations, policies, and guidelines to carry out the Grant Program and the Loan Program.

#### Section 4-712

(a)

  (1) A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Department relating to a grant or loan.

  (2) A grant or loan applicant may not knowingly make or cause to be made any false statement or report to influence the action of the Department on a grant or loan application or a grant or loan already made.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 2 years or a fine not exceeding $50,000 or both.

### Subtitle 8. Maryland Home Financing Program

#### Section 4-801

(a) In this subtitle the following words have the meanings indicated.

(b)

  (1) "Adjusted annual income" means gross income from all sources with adjustments, as determined by the Department, made for unusual or temporary income items and long-term unusual expenses such as medical, rehabilitation, or special education expenses.

  (2) "Adjusted annual income" includes:

    (i) wages;

    (ii) investment income;

    (iii) Social Security payments;

    (iv) retirement payments;

    (v) disability payments; and

    (vi) unemployment insurance payments.

(c) "Fund" means the Homeownership Programs Fund under Subtitle 5 of this title.

(d) "Household of limited income" means one or more individuals whose aggregate adjusted annual income does not exceed the upper income limits that the Secretary sets under Sec. 4-807 of this subtitle.

(e) "Lot consolidation" means the acquisition of real property adjacent to and in connection with a residence financed by the Program to include the real property as part of the residence.

(f) "Median annual family income" means the median annual family income for the State, county, or area, whichever is greatest, as shown in the latest Census Bureau Report of the United States Department of Commerce.

(g) "Preferred interest rate" means an interest rate that the Department sets under Sec. 4-806(c) of this subtitle.

(h) "Program" means the Maryland Home Financing Program.

(i) "Region" means an area of the State that the Department establishes comprising one or more counties.

(j) "Short-term loan" means a loan that, under the loan documents, is expected to be taken out by other financing within 7 years.

#### Section 4-802

This subtitle applies only to loans that the Department makes under this subtitle or that were made before July 1, 1989, under the Maryland Home Financing Program, the Reverse Equity Loan Program, or the Homeowners' Emergency Mortgage Assistance Program.

#### Section 4-803

There is a Maryland Home Financing Program.

#### Section 4-804

The purposes of the Program are to make, participate in making, and purchase:

(1) preferred interest rate loans to acquire, acquire and rehabilitate with or without demolition or lot consolidation, or refinance a primary residence by:

  (i) households of limited income that will occupy single-unit primary residences; or

  (ii) owner-occupants of residential buildings with not more than four units, if each unit other than the owner's will be occupied by a household of limited income;

(2) short-term construction loans to developers or nonprofit sponsors to construct or rehabilitate dwelling units that households of limited income can afford;

(3) short-term loans to nonprofit sponsors, as defined in Departmental regulations, to acquire and construct or acquire and rehabilitate, with or without demolition or lot consolidation, dwelling units that households of limited income can afford to buy under a purchase or lease-purchase contract;

(4) emergency assistance loans to households of limited income who, because of unemployment or other extraordinary hardship, cannot make current mortgage payments on their homes and risk forfeiting the title to their homes;

(5) reverse equity loans to elderly households of limited income for housing-related expenses or personal expenses that enable the owner to continue to occupy the home; and

(6) preferred interest rate loans to households that meet income standards set by the Department for the redemption of ground leases on their principal residence, including the transactional costs associated with the redemption.

#### Section 4-805

The Department may:

(1) contract for services related to the Program;

(2) contract with private mortgage servicers to perform on behalf of the Department functions the servicers ordinarily perform, including foreclosure and employment of counsel;

(3) require payment of a nonrefundable application fee;

(4) purchase or commit to purchase from mortgage lenders notes or mortgages that meet the requirements of this subtitle, any regulations adopted under it, and appropriate Program directives; and

(5) without approval or execution by the Board of Public Works:

  (i) assign a mortgage for value;

  (ii) release a mortgage;

  (iii) foreclose a mortgage;

  (iv) acquire property that secures a loan in default;

  (v) encumber, sell, or otherwise dispose of property acquired in connection with a loan in default;

  (vi) sell a loan at a discount or on other terms acceptable to the Department;

  (vii) transfer to the Fund money received on the sale of a loan under item (vi) of this item; and

  (viii) repurchase or pay the cost of servicing a loan that has been sold under item (vi) of this item with money in the Fund and on terms acceptable to the Department.

#### Section 4-806

(a) The Department shall:

  (1) manage the Program in a manner that:

    (i) serves all areas of the State; and

    (ii) does not create or aggravate low-income concentrations that adversely affect communities;

  (2) periodically set upper limits on adjusted annual income;

  (3) use federal or State programs that complement or facilitate carrying out the Program; and

  (4) adopt regulations to carry out the Program.

(b) The Department shall adopt policies to ensure that each loan made under the Program is made only to:

  (1) a household that:

    (i) when the loan is made, has an adjusted annual income at or below the applicable upper limit that the Secretary sets under Sec. 4-807 of this subtitle; and

    (ii) cannot qualify for conventional or other available departmental financing to enable the owner to continue to occupy the home, or to acquire, acquire and rehabilitate with or without demolition or lot consolidation, or refinance a home;

  (2) a developer that the Department reasonably believes can build or rehabilitate housing that a household of limited income can afford; and

  (3) an owner-occupant of a residential building with not more than four units if each unit other than the owner's will be occupied by a household of limited income.

(c)

  (1) For each type of loan described in Sec. 4-804 of this subtitle, the Department periodically shall set:

    (i) appropriate terms, including deferred payments on principal and interest; and

    (ii) a preferred interest rate that may be as low as 0.0% or as high as is reasonable in light of the incomes of the proposed occupants.

  (2) In setting these terms and interest rates, the Department shall take into account rates available in the conventional private housing market and the adjusted annual income and assets of prospective borrowers.

#### Section 4-807

(a) In setting upper limits on adjusted annual income, the Department shall consider factors including:

  (1) the total income of each individual expected to live in the home;

  (2) the size of the household;

  (3) the cost of available housing facilities;

  (4) the ability of the household to compete successfully in the conventional private housing market; and

  (5) pertinent standards and definitions established for federal housing programs.

(b) Upper limits on adjusted annual income may vary for different:

  (1) types of housing;

  (2) types of financing offered by the Program; and

  (3) regions.

(c) Within the upper limits on adjusted annual income, lower income limit ranges and lower interest rates may be established for loans to households with adjusted annual incomes in the lower ranges.

(d) Except for loans made under Sec. 4-804(4) and (6) of this subtitle, the upper limits on adjusted annual income established under subsection (a) of this section may not exceed the median annual family income.

#### Section 4-808

The Program shall be operated with the money in the Fund.

#### Section 4-809

To apply for a loan under this subtitle, an applicant shall submit:

(1) a completed application in a form that the Department requires;

(2) a copy of the applicant's latest State income tax return or other available verification of income, unless the application is for a loan under Sec. 4-804(1)(i) or (2) of this subtitle; and

(3) any other information or documentation that the Department considers necessary to make a determination on the loan.

#### Section 4-810

(a) To qualify for a loan under Sec. 4-804(1)(i), (4), or (5) of this subtitle, an applicant:

  (1) shall be a member of a household of limited income;

  (2) on closing of the loan, shall intend to reside in the home to be financed;

  (3) may not own other property used as the applicant's personal residence; and

  (4) in the estimation of the Department, shall lack the financial resources to obtain a private conventional mortgage or to qualify for other departmental loan programs.

(b) To qualify for a loan under Sec. 4-804(1)(ii) of this subtitle, an applicant:

  (1) shall agree in writing to live as an owner-occupant in one of the units of a residential building with no more than four units;

  (2) shall agree in writing to rent each unit other than the applicant's unit to a household of limited income; and

  (3) in the estimation of the Department, shall lack the financial resources to obtain a private conventional mortgage or qualify for other departmental loan programs.

(c) To qualify for a loan under Sec. 4-804(2) of this subtitle, an applicant shall agree to sell or rent each dwelling unit constructed or rehabilitated with the proceeds of the loan to a household of limited income.

(d) To qualify for a loan under Sec. 4-804(6) of this subtitle, an applicant shall:

  (1) own and occupy the home as the applicant's principal residence; and

  (2) meet the income requirements set by the Department.

#### Section 4-811

(a) To qualify for an emergency assistance loan made under Sec. 4-804(4) of this subtitle, an applicant:

  (1) shall be unable to keep payments current on the applicant's home mortgage because of unforeseeable adverse personal or economic circumstances;

  (2) shall be at risk of forfeiting title to the applicant's home; and

  (3) reasonably may be expected to resume regular mortgage payments within 24 months after the first mortgage assistance payment is provided.

(b) For an emergency assistance loan under Sec. 4-804(4) of this subtitle:

  (1) the Department shall consider the amount of equity in the property; and

  (2) the loan may not exceed an amount equal to 36 payments of principal and interest on all superior liens, plus:

    (i) late fees;

    (ii) taxes;

    (iii) insurance payments; and

    (iv) other payments needed for the loan to be current.

#### Section 4-812

To qualify for a reverse equity loan under Sec. 4-804(5) of this subtitle, an applicant shall:

(1) be at least 62 years old when the loan closes; and

(2) need financial assistance with housing-related expenses or personal expenses that enable the owner to continue to occupy the home.

#### Section 4-813

(a) To qualify for a short-term construction loan under Sec. 4-804(2) of this subtitle, a developer or nonprofit sponsor shall:

  (1) provide construction costs, marketing data, and other information the Department requires; and

  (2) have a commitment from the Department under Sec. 4-815(j) of this subtitle for permanent financing for the sale of each residence to be built or rehabilitated with the short-term construction loan.

(b) To qualify for a short-term loan under Sec. 4-804(3) of this subtitle, a nonprofit sponsor:

  (1) shall provide:

    (i) information on the costs of the proposed undertaking;

    (ii) marketing data; and

    (iii) other information the Department requires; and

  (2) shall have:

    (i) a commitment from the Department for permanent financing for the sale of each residence built or rehabilitated with the short-term loan; or

    (ii) approval from the Department to rent the residence subject to a lease purchase agreement acceptable to the Department.

#### Section 4-814

To qualify for a preferred interest rate loan to refinance an existing home under Sec. 4-804(1) of this subtitle, an applicant shall:

(1) be unable to keep payments current on the applicant's home mortgage because of exceptional adverse personal or economic circumstances; and

(2) risk forfeiting title to the applicant's home.

#### Section 4-815

(a) As to each loan, the Department may set:

  (1) the principal amount, subject to subsection (f) of this section;

  (2) the term of the loan, not to exceed 40 years except in the case of a reverse equity loan made under subsection (b)(3) of this section;

  (3) the interest rate, which may be adjustable under subsection (g) of this section;

  (4) the principal repayment terms, subject to subsections (b) and (c) of this section; and

  (5) other terms that the Department considers necessary to achieve the purposes of the Program.

(b)

  (1) A loan may provide for immediate acceleration if the borrower violates Sec. 4-816 of this subtitle or if the loan is in default.

  (2) In the case of a preferred interest rate loan under Sec. 4-804(1) of this subtitle, a loan may provide for full acceleration of principal after 5 years if the borrower:

    (i) no longer qualifies as a household of limited income; and

    (ii) can qualify for conventional mortgage financing.

  (3) In the case of a reverse equity loan made under Sec. 4-804(5) of this subtitle, a loan may provide for:

    (i) full or partial deferral on payment of interest and principal until sale, conveyance in accordance with a will or trust instrument, or other transfer of the mortgaged property or a beneficial interest in the property; and

    (ii) forgiveness of accrued interest in excess of the available equity in the mortgaged property when the conveyance occurs.

  (4) In the case of an emergency assistance loan under Sec. 4-804(4) of this subtitle, a loan may provide for full or partial deferral of payment of interest and principal until a stated date when the Department reasonably anticipates that the borrower will be able to make full or partial payments.

(c) A mortgage shall include the right of the Department to:

  (1) foreclose the mortgage and take title to the foreclosed property or convey title to a buyer; and

  (2) obtain a deficiency judgment.

(d)

  (1) Repayment of a loan shall be secured by a recorded lien on the real property.

  (2) The lien may be a subordinate lien.

  (3) A lien securing an emergency assistance loan may be released if the release is in the interest of the Department.

(e) The Department may require a mortgage to be insured at the borrower's expense by a federal, State, or private instrumentality.

(f)

  (1) For a preferred interest loan under Sec. 4-804(1) of this subtitle, the amount of the loan and any prior recorded liens outstanding may not exceed the value of the secured property, as determined by the Department when the loan is closed, plus settlement expenses.

  (2) For a reverse equity loan under Sec. 4-804(5) of this subtitle, the principal amount of the loan and any prior liens outstanding may not exceed the value of the secured property as determined by the Department from time to time.

  (3) For a short-term loan under Sec. 4-804(2) of this subtitle, the amount of the loan may not exceed the total commitments for permanent financing for buyers, including any commitments of federal, State, or local money to subsidize the cost of the dwelling units.

  (4) For a preferred interest rate loan under Sec. 4-804(6) of this subtitle, the Department may set the maximum amount of the  loan, including the maximum amount that may be used for the transactional costs associated with the redemption.

(g) After full disclosure to the borrower when the loan is made, the Department may take as security an adjustable interest rate mortgage under which any rate adjustment must:

  (1) follow written notice to the borrower; and

  (2) be based on an increase or decrease in household income.

(h) On default, the Department may modify the interest rate, the time or amount of payment, or any other term of the loan to facilitate repayment of the loan and achieve the purposes of the Program.

(i) For a mortgage securing a loan under this subtitle, the Department may allow:

  (1) the transfer of the mortgaged property or an interest in the property without monetary consideration:

    (i) to a spouse, child, or other immediate family member; or

    (ii) in connection with the death of a borrower, a divorce decree, or a legal separation agreement; and

  (2) assumption of the mortgage by a transferee described in item (1)(i) of this subsection for monetary consideration and by any other transferee with or without consideration if the transferee qualifies as a household of limited income and satisfies all other Program requirements.

(j) For the developer of housing that will be priced so as to be affordable to households of limited income, the Department may commit to reserve for a fixed period a fixed amount of Program money to be available to finance preferred interest rate mortgage loans for households of limited income who seek to purchase from the developer fully constructed or rehabilitated homes.

#### Section 4-816

(a) A person may not knowingly make or cause to be made any material misstatement of fact, including an understatement or overstatement of financial condition, in a statement or report that:

  (1) is in or relates to a loan application under this subtitle; or

  (2) affects a loan already made under this subtitle.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 2 years or a fine not exceeding $5,000 or both.

### Subtitle 9. Maryland Housing Rehabilitation Program

#### Section 4-901

(a) In this subtitle the following words have the meanings indicated.

(b) "Cooperative housing corporation" has the meaning stated in Sec. 5-6B-01 of the Corporations and Associations Article.

(c) "Cooperative interest" has the meaning stated in Sec. 5-6B-01 of the Corporations and Associations Article.

(d)

  (1) "Family of limited income" means a family or individual whose income does not exceed the limits that the Secretary establishes under Sec. 4-915 of this subtitle.

  (2) "Family of limited income" includes a trust described in 42 U.S.C. Sec. 1396p(d)(4), or a trust established for the benefit of an individual with a disability by an individual other than the beneficiary and that is funded with assets that were never owned or controlled by the beneficiary, if:

    (i) the income of the trust does not exceed the upper income limits established by the Secretary under Sec. 4-915 of this subtitle; and

    (ii) the beneficiary of the trust is an individual who resides in the residential building owned by the trust.

(e) "Local rehabilitation program" means a rehabilitation program that uses Program loans and is administered by a political subdivision or a nonprofit sponsor.

(f) "Member" has the meaning stated in Sec. 5-6B-01 of the Corporations and Associations Article.

(g) "Minimum livability code" means a regulation, statute, or ordinance that establishes minimum property maintenance standards that the State or a political subdivision adopts under Sec. 12-203 of the Public Safety Article.

(h) "Nonprofit sponsor" means:

  (1) a nonprofit organization;

  (2) a political subdivision; or

  (3) a limited partnership formed to undertake a rehabilitation project that is eligible wholly or partly for federal programs or incentives, if:

    (i) each general partner is a nonprofit organization or a political subdivision; or

    (ii)

      (1) each general partner is a wholly owned subsidiary of a nonprofit organization or political subdivision; and

      (2) a nonprofit organization or political subdivision manages the rehabilitation project or will receive net cash flow or the residual sale proceeds on the sale of the rehabilitation project.

(i) "Program" means the Maryland Housing Rehabilitation Program.

(j) "Program loan" means a loan or grant under the Maryland Housing Rehabilitation Program or a special loan program.

(k) "Regular Rehabilitation Program" means the Program when used to fund a loan for a single family project.

(l)

  (1) "Rehabilitation project" means a project to repair, reconstruct, renovate, redevelop, improve, modify, or add to a building for a purpose listed in Sec. 4-923 of this subtitle.

  (2) "Rehabilitation project" includes providing utility submetering for dwellings in a residential rental building.

(m) "Special loan program" means:

  (1) the Accessory, Shared, and Sheltered Housing Program;

  (2) the Indoor Plumbing Program;

  (3) the Lead Paint Abatement Program;

  (4) the Migratory Worker Housing Program;

  (5) the Radon and Asbestos Abatement Pilot Program; and

  (6) the Accessible Homes for Senior Homeowners Grant Program.

(n) "Special Rehabilitation Program" means the Program when used to fund a loan under a special loan program.

(o) "Sponsor" means an owner who receives a loan to rehabilitate a building for residential rental purposes or nonresidential purposes.

#### Section 4-902

(a) This subtitle applies to buildings that, after rehabilitation, provide:

  (1) traditional dwellings;

  (2) single room occupancy;

  (3) shared living dwellings in which two or more households can live and share some or all of the living, dining, kitchen, or sanitary facilities; or

  (4) congregate or group housing and related services or temporary shelters and related services that serve:

    (i) individuals with disabilities or low-income, elderly households, homeless, or other disadvantaged individuals; or

    (ii) the nonresidential commercial, business, or social needs of the community where the building is located, so as to enhance the economic feasibility of housing rehabilitation in that community.

(b) This subtitle does not apply to a building that provides group housing unless the group housing is provided by an owner-occupant or a nonprofit sponsor.

#### Section 4-903

The General Assembly finds that:

(1)

  (i) many residents of the State live in dwellings that do not conform to building, health, safety, fire, occupancy, or other codes and standards applicable to housing;

  (ii) many communities or political subdivisions in the State do not have a minimum livability code; and

  (iii) these conditions impede the development and maintenance of healthy, safe, and viable communities;

(2) private sector financing is often unavailable for rehabilitation because:

  (i) owner-occupants of housing in need of rehabilitation often have low incomes; and

  (ii) nonoccupant owners often incur high risks in owning and managing the housing;

(3) rehabilitating suitable housing:

  (i) increases the economic life of the housing;

  (ii) is often more economical and less disruptive than replacing the housing and relocating its occupants;

  (iii) can better promote community development when it is done through organized housing rehabilitation programs;

  (iv) is essential for sound community development; and

  (v) can be helped by rehabilitating commercial buildings serving communities where housing rehabilitation is desirable;

(4) it is a proper public purpose for which public money may be spent and property acquired to:

  (i) rehabilitate housing;

  (ii) develop healthful, safe, and viable communities;

  (iii) rehabilitate commercial buildings to help rehabilitate and develop housing; and

  (iv) provide healthful and safe housing for migratory workers to maintain and expand the agricultural activities that are dependent on the labor of these workers; and

(5) it is a proper public purpose for which public money may be spent to:

  (i) improve, modify, and add to housing to increase the supply of special housing for special populations, such as elderly households, individuals with disabilities, and other disadvantaged residents of the State;

  (ii) prevent lead poisoning by modifying older housing to provide a lead-safe environment, as lead paint in older housing is a major source of lead poisoning in children;

  (iii) provide adequate indoor plumbing, water supply, and sewage disposal systems for dwellings; and

  (iv) reduce or eliminate radon and asbestos, which are major detriments to the health and safety of residents, on a pilot program basis.

#### Section 4-904

There is a Maryland Housing Rehabilitation Program.

#### Section 4-905

The Maryland Housing Rehabilitation Program includes:

(1) the Accessory, Shared, and Sheltered Housing Program;

(2) the Indoor Plumbing Program;

(3) the Migratory Worker Housing Program;

(4) the Radon and Asbestos Abatement Pilot Program; and

(5) the Accessible Homes for Senior Homeowners Grant Program.

#### Section 4-906

(a)

  (1) The Department shall operate the Program and make Program loans.

  (2) As much as possible, the Program shall be administered:

    (i) in conjunction with federal programs assisting rehabilitation of housing, to ensure maximum use of available federal money; and

    (ii) consistently with locally approved plans or programs of concentrated neighborhood revitalization.

(b)

  (1) Except for Program loans made under a special loan program, the Regular Rehabilitation Program consists of Program loans to rehabilitate residential buildings providing four or fewer dwellings.

  (2) The Special Rehabilitation Program consists of Program loans made under a special loan program.

#### Section 4-907

(a) The Regular Rehabilitation Program and the Special Rehabilitation Program shall operate with money in the Special Loan Programs Fund and other money available to the Department for these programs.

(b) If the applications that qualify for a Program loan under the Regular Rehabilitation Program or a special loan program do not commit all money appropriated to that loan program within 6 months after the appropriation, the Department may reallocate the remaining appropriated money to any other program financed by the Special Loan Programs Fund.

#### Section 4-908

The Department may:

(1) limit the return on equity allowed to, or enter into equity participation agreements with, sponsors and nonprofit sponsors;

(2) require and obtain appraisals, credit and title information, and other information related to making Program loans;

(3) contract for services relating to any aspect of the operation of the Program under the procedures required by law for State contracts;

(4) charge and collect:

  (i) reasonable application and processing fees; and

  (ii) other charges, fees, or reimbursements incidental to Program loans; and

(5) if necessary, limit the cumulative outstanding debt for Program loans made to a trust described in 42 U.S.C. Sec. 1396p(d)(4) to preserve the ongoing financial viability of the Program.

#### Section 4-909

(a) If Program loans are secured by first or junior mortgages, the Department may:

  (1) enforce the mortgages;

  (2) foreclose on the mortgages and take title to the mortgaged properties, or take deeds in lieu of foreclosure;

  (3) convey title to purchasers;

  (4) obtain and enforce deficiency judgments;

  (5) allow assumption of mortgages; and

  (6) contract with private mortgage servicers to perform on behalf of the Department any functions the servicers ordinarily perform.

(b) Without approval or execution by the Board of Public Works, the Department may:

  (1) assign mortgages for value;

  (2) release mortgages when paid;

  (3) foreclose on mortgages;

  (4) take deeds in lieu of foreclosure; or

  (5) convey property after acquisition.

#### Section 4-909.1

(a) If a Program loan to a member of a cooperative housing corporation is secured by a security interest in the member's cooperative interest, the Department may:

  (1) foreclose on the security interest or otherwise enforce the security interest as permitted under Title 9 of the Commercial Law Article;

  (2) take possession of the premises in lieu of foreclosure;

  (3) obtain and enforce deficiency judgments;

  (4) transfer the cooperative interest;

  (5) allow assumption of the security agreement; and

  (6) contract with private loan servicers to perform on behalf of the Department any functions the private loan servicers ordinarily perform.

(b) Without approval or execution by the Board of Public Works, the Department may:

  (1) assign a security interest for value;

  (2) release a security interest when paid;

  (3) foreclose on a security interest;

  (4) take possession of the premises in lieu of foreclosure; or

  (5) transfer a cooperative interest after acquisition.

#### Section 4-910

The Department may adopt regulations to carry out the Program.

#### Section 4-911

(a) To ensure that all areas of the State are served, the Department shall allocate at least annually among the counties the money appropriated for making Program loans under the Regular Rehabilitation Program.

(b) When allocating money to a county, the Department shall consider:

  (1) the number of families of limited income in the county;

  (2) the need to rehabilitate buildings in the county;

  (3) the capability of the county to administer a local rehabilitation program; and

  (4) other standards that the Department considers relevant to ensure fair and equitable distribution of money among counties.

(c) The Department may:

  (1) allocate on a countywide basis first and then make suballocations among participating municipal corporations and nonprofit sponsors within counties;

  (2) allocate up to 25% of the total money available in the Special Loan Programs Fund to a reserve; and

  (3) from time to time, reallocate the money held in the reserve.

#### Section 4-912

Money that is received as repayment of principal or payment of interest on loans under the Program and that is not appropriated in the State budget may be credited to the Annuity Bond Fund, to be used to pay the principal of or interest on money borrowed by the State and appropriated to the Program.

#### Section 4-913

The Department shall include in its request for appropriations for the Program:

(1) an estimate of the interest rates at which Program loans may be made in the next fiscal year;

(2) the total principal amount of Program loans expected to be made at those interest rates in the next fiscal year; and

(3) any other information that the Secretary of Budget and Management requests about Program loans.

#### Section 4-914

(a) If the Department certifies a political subdivision or nonprofit sponsor as capable of administering a local rehabilitation program, the political subdivision or nonprofit sponsor may originate and administer Program loans under regulations of the Department.

(b)

  (1) By regulation, the Department shall establish standards for determining the capability of a political subdivision or nonprofit sponsor to administer a local rehabilitation program.

  (2) The standards shall include provisions on:

    (i) the size, training, and experience of the professional staff that would administer the Program; and

    (ii) the capability of the professional staff to:

      (1) determine rehabilitation needs;

      (2) establish rehabilitation programs;

      (3) evaluate applications for Program loans; and

      (4) monitor Program loans and the rehabilitation work done with them.

(c) If the Department determines that a political subdivision or nonprofit sponsor cannot or does not want to administer a local rehabilitation program, the Department may originate and administer Program loans from the allocation or suballocation to that political subdivision.

(d) The Department may:

  (1) help train employees of political subdivisions and nonprofit sponsors to administer local rehabilitation programs under the standards that the Department sets; and

  (2) provide political subdivisions and nonprofit sponsors advice and technical assistance on the administration of their local rehabilitation programs, including loan packaging, contractor and bid selection, zoning, marketing, engineering, and related services.

#### Section 4-915

(a)

  (1) The Secretary shall set upper limits on the income that a family or individual may have to qualify as a family of limited income.

  (2) In setting the limits, the Secretary shall consider factors that include:

    (i) the portion of the total family income available for housing;

    (ii) the size of the family;

    (iii) the cost and condition of available housing;

    (iv) the ability of the family to compete successfully in the private housing market; and

    (v) relevant standards and definitions established for federal and State housing programs.

(b) The Secretary may waive income limits for a borrower or occupant seeking a Program loan to rehabilitate a building that the State historical preservation officer finds historically or architecturally significant.

#### Section 4-916

(a)

  (1) The Department may make Program loans for housing on terms that the Department considers necessary to make the housing affordable to families of limited income.

  (2) The Department may make Program loans in the form of a grant to a family of limited income if:

    (i) the family of limited income owns and occupies the dwelling; and

    (ii) the Department determines the family of limited income cannot undertake the rehabilitation project without a grant.

  (3) The terms may include:

    (i) deferred payment of principal and interest until the maturity date or the date of any sale or other transfer of the building or an interest in the building;

    (ii) an interest rate as low as 0% or as high as is reasonable, given the incomes of the proposed occupants, if the interest rate does not violate any federal regulation governing the borrowing of money by the State;

    (iii) increased interest rates or accelerated payments of principal and interest, if the borrower no longer qualifies for the Program loan; and

    (iv) advance payments to a nonprofit sponsor for certain development costs, including architectural, engineering, and attorneys' fees.

(b) Within the maximum income limits for families of limited income, the Secretary may establish:

  (1) lower income ranges;

  (2) interest rates to be available on Program loans serving occupants with incomes within those lower ranges; and

  (3) any preference or reservation of money for applications for Program loans to finance housing to serve occupants in those lower income ranges.

#### Section 4-917

(a) A Program loan:

  (1) may not be made if the Department determines that comparable private financing is available to the prospective borrower; and

  (2) may not exceed an amount the Secretary establishes by regulation.

(b)

  (1) Except as provided under paragraphs (2), (3), (4), and (5) of this subsection, a Program loan of more than $5,000 shall be secured wholly or partly by a recorded mortgage or deed of trust on real property.

  (2) A Program loan to a political subdivision may be secured by a recorded mortgage, deed of trust on real property, or other security device acceptable to the Department.

  (3) A Program loan to a trust described in 42 U.S.C. Sec. 1396p(d)(4) may be secured by a recorded mortgage, deed of trust on real property, or other security device acceptable to the Department.

  (4)

    (i) Subject to subparagraph (ii) of this paragraph, a Program loan to a member of a cooperative housing corporation may be secured by a perfected security interest in the member's cooperative interest.

    (ii) Before a Program loan is secured by a perfected security interest in the member's cooperative interest, the Department shall enter into an agreement with the cooperative housing corporation that establishes the rights and obligations of the Department and the cooperative housing corporation with respect to the secured cooperative interest.

  (5) A Program loan in the form of a grant may be unsecured or secured by a mortgage, deed of trust, or other security device acceptable to the Department.

(c) Program loans shall be made to:

  (1) families of limited income owning and occupying the building to be rehabilitated; or

  (2) sponsors or nonprofit sponsors.

(d) The Department may require that Program loans be insured.

(e) A Program loan may cover:

  (1) costs of a rehabilitation project, including implementation costs such as appraisal, architectural, and engineering fees; and

  (2) closing costs of the Program loan.

(f) The Department may modify the interest rate, the time or amount of payment, or any other term of a Program loan that is in default to facilitate repayment of the Program loan and achieve the purposes of the Program.

#### Section 4-918

(a)

  (1) When the Department makes a Program loan to finance a residential rehabilitation project, the sponsor or nonprofit sponsor shall restrict some dwellings for occupancy by families of limited income for at least the greater of 15 years and the number of years required by federal law.

  (2) The number of dwellings restricted under paragraph (1) of this subsection shall be at least the greater of:

    (i) the number that bears the same ratio to the total number of dwellings in the project as the amount the Program loan bears to the total financing of the undertaking; and

    (ii) the number of dwellings required for a community development project under Sec. 4-217(b)(1)(ii) of this title or the number of dwellings that the issuer of the bonds chooses, whichever is greater, if a portion of the costs of the residential rehabilitation project is financed by government-issued, federally tax-exempt revenue bonds.

(b) Dwellings restricted for occupancy to meet other federal or State occupancy requirements may be counted toward the number required under subsection (a) of this section.

#### Section 4-919

(a) The Secretary shall establish standards to promote the maximum use of private financing.

(b) If a portion of a rehabilitation project is to be financed by a private lending institution, the Department shall require that the sponsor use all the private financing that the rehabilitation project can support without impairing:

  (1) the rehabilitation project; or

  (2) affordable housing for families of limited income, if the rehabilitation project is residential.

(c) As long as the State complies with all applicable federal treasury regulations governing borrowing money by the State, a Program loan shall be at an interest rate that at least covers:

  (1) the administrative and other expenses of the Program; and

  (2) reasonably expected losses from defaults on Program loans.

#### Section 4-920

The Department shall establish a maximum percentage or amount of Program loans from the Rental Housing Programs Fund that may be used for nonresidential rehabilitation.

#### Section 4-921

Rehabilitation loans under the Regular Rehabilitation Program and special loan programs shall be financed by the Special Loan Programs Fund.

#### Section 4-922

(a) In addition to making loans for rehabilitation projects to sponsors, nonprofit sponsors, or families of limited income from the Rental Housing Programs Fund and the Special Loan Programs Fund, the Department may use money from any other authorized source, including federal programs of assistance for rehabilitation, to make:

  (1) grants for rehabilitation projects to families of limited income or nonprofit sponsors; and

  (2) loans for rehabilitation projects to sponsors, nonprofit sponsors, or families of limited income.

(b)

  (1) The Department:

    (i) shall use federal programs of assistance for rehabilitation to the maximum extent consistent with the purposes of this subtitle; and

    (ii) may do all things necessary to qualify for participation in those programs.

  (2) The terms and conditions of loans and grants made under this section shall be in accordance with the legislation or other authority by which the money is made available to the Department.

#### Section 4-923

(a) The purpose of a rehabilitation project is:

  (1) to bring a building to a decent, safe, and sanitary condition in accordance with applicable codes and standards, including those for construction, health, safety, fire, and occupancy;

  (2) to maintain the building in that condition;

  (3) to make the building more useful and attractive;

  (4) to conform the building to the appropriate minimum livability code;

  (5) to provide, under applicable special loan programs:

    (i) lead paint abatement;

    (ii) indoor plumbing; or

    (iii) shared, accessory, or sheltered housing;

  (6) in the case of a loan or grant to an elderly household or a disabled homeowner, to modify or improve a dwelling to make it more accessible or functional for the occupants, if the building is, or after improvements will be, structurally sound and free of health and safety hazards; or

  (7) to provide, under applicable special loan pilot programs, radon abatement or asbestos abatement.

(b)

  (1) The applicable codes and standards under subsection (a)(1) of this section are:

    (i) those in force in the political subdivision where the building is located; or

    (ii) those that the Department sets by regulation for that political subdivision solely for purposes of this subtitle, if the political subdivision lacks codes and standards that the Secretary considers sufficient to promote the objectives of this subtitle.

  (2) With the approval of the local enforcement authority, the Secretary may allow exceptions to a code or standard to preserve the historic or architectural value of a building undergoing rehabilitation under this subtitle.

#### Section 4-926

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Accessory housing" means a dwelling with complete and independent sleeping, cooking, and living facilities that is:

    (i) within, attached to, or on the same parcel as a single-family, owner-occupied dwelling; and

    (ii) subordinate to but under the same ownership as the single-family, owner-occupied dwelling.

  (3) "Shared housing" means a single-family, owner-occupied dwelling adapted for common and shared living use by the owner-occupant and another family of limited income.

  (4) "Sheltered housing" means a single-family, owner-occupied dwelling that:

    (i) accommodates the owner-occupant; and

    (ii) provides sleeping and living facilities, meals, and assistance with daily activities for a rental fee to not more than 15 elderly individuals or individuals with disabilities.

(b) There is an Accessory, Shared, and Sheltered Housing Program.

(c) The Department shall operate the Accessory, Shared, and Sheltered Housing Program and make loans for rehabilitation costs for accessory, shared, and sheltered housing from the Special Loan Programs Fund under this subtitle.

(d) The terms for accessory, shared, and sheltered housing loans shall satisfy the requirements of Sec. 4-916(b) of this subtitle.

(e) To qualify for an accessory housing loan, an applicant shall:

  (1) own the property for which the loan is made and agree to live in the property after the rehabilitation is completed; and

  (2)

    (i) agree to use the loan proceeds to implement a rehabilitation project to provide an accessory dwelling for a family of limited income for a fixed minimum term that the Department determines; or

    (ii) be a family of limited income when the loan is made and agree to use the loan proceeds to provide an accessory dwelling for a fixed minimum term that the Department determines.

(f) To qualify for a shared housing loan, an applicant shall:

  (1) be a family of limited income;

  (2) own the property for which the loan is made and agree to live in the property after the rehabilitation is completed; and

  (3) agree to use the loan proceeds to implement a rehabilitation project to provide shared housing or an accessory dwelling for a family of limited income.

(g) To qualify for a sheltered housing loan, an applicant shall:

  (1) own the property for which the loan is made and agree to live in the property after the rehabilitation is completed;

  (2) agree to provide shelter, meals, and assistance with daily activities to not more than 15 elderly individuals or individuals with disabilities who qualify as families of limited income; and

  (3) demonstrate that the property will be certified by the appropriate governmental unit to provide sheltered care to elderly individuals or individuals with disabilities.

#### Section 4-927

(a) There is an Indoor Plumbing Program.

(b) The Department shall:

  (1) operate the Indoor Plumbing Program; and

  (2) make loans for rehabilitation projects that provide for adequate indoor plumbing from the Special Loan Programs Fund under this subtitle.

(c)

  (1) The terms for indoor plumbing loans shall meet the requirements of Sec.Sec. 4-917 through 4-919 of this subtitle.

  (2) The Department may forgive all or part of a deferred payment loan, if:

    (i) the loan is made to a family of limited income that owns and occupies the dwelling and whose income is within a lower income range established under Sec. 4-916(b) of this subtitle; and

    (ii) the Secretary determines that the family of limited income does not have enough income to repay the principal amount of the loan.

(d) To qualify for an indoor plumbing loan, an applicant shall:

  (1) own a building that is otherwise structurally sound, or for which the applicant provides a commitment from a lender to finance improvements needed to make the building structurally sound, and that:

    (i) has no or incomplete indoor plumbing or a failing septic system; and

    (ii) needs indoor plumbing pipes, equipment, wells, septic tanks or other on-site sewer system, or a connection to a community water or sewer system;

  (2) live in the building and be a family of limited income, or rent at least two-thirds of the dwellings in the building to families of limited income; and

  (3) submit to the Department a proposal for installing an adequate indoor plumbing system for water supply and sewage disposal, including any needed septic system, well, or connection to a community sewer or water system that meets the requirements of the Department of the Environment and every other governmental unit that has jurisdiction over the system.

#### Section 4-928

(a)

  (1) In this section the following words have the meanings indicated.

  (2)

    (i) "Migratory labor camp" means one or more structures, buildings, tents, barracks, trailers, vehicles, mobile homes, converted buildings, or unconventional enclosures of living space that are established, operated, or used as living quarters for four or more migratory workers engaged in agricultural activities, including related food processing.

    (ii) "Migratory labor camp" includes appurtenant land.

  (3) "Migratory Housing Program" means the Migratory Worker Housing Program.

  (4) "Migratory worker" means an individual from within or outside the State who:

    (i) is not a year-round employee but moves seasonally from one place to another for work; and

    (ii) during a period of work, occupies living quarters that are not the individual's permanent home.

(b) There is a Migratory Worker Housing Program.

(c) The Department shall:

  (1) operate the Migratory Housing Program;

  (2) make migratory worker housing loans from the Special Loan Programs Fund under this subtitle to a qualified owner of a migratory labor camp to make migratory worker housing safer and more healthful; and

  (3) to the extent determined by the Secretary, administer the Migratory Housing Program in conjunction with any appropriate federal program.

(d) To the extent applicable, migratory worker housing loans shall satisfy the requirements of Sec. 4-916(b) of this subtitle.

(e) To qualify for a migratory housing loan, the owner of a migratory labor camp shall:

  (1) live or have a principal place of business in the State;

  (2) have been denied a loan by a private lending institution or have received a commitment from a private lending institution for less than the amount of money required to finance the necessary health and safety improvements; and

  (3) submit to the Department a plan for the necessary health and safety improvements that has been approved by the Department of the Environment.

#### Section 4-930

(a) There is a Radon and Asbestos Abatement Pilot Program.

(b) The Department shall:

  (1) operate the Radon and Asbestos Abatement Pilot Program; and

  (2) make loans for rehabilitation projects for radon and asbestos abatement.

(c) The terms of loans shall meet the requirements under Sec.Sec. 4-917 through 4-919 of this subtitle.

(d)

  (1) To qualify for a loan, an applicant shall:

    (i) own a building in need of radon or asbestos abatement:

      (1) that is otherwise structurally sound; or

      (2) for which the applicant provides a commitment from a lender to finance improvements to make the building structurally sound; and

    (ii) make a proposal to the Department for treatment that complies with the requirements and procedures of the Department of the Environment for radon or asbestos abatement.

  (2) In addition to the requirements in paragraph (1) of this subsection, the applicant shall:

    (i) live in the building and be a family of limited income;

    (ii) agree to rent at least two-thirds of the dwellings in the building to families of limited income; or

    (iii) agree to provide congregate or group housing or temporary shelters to families of limited income.

#### Section 4-931

(a) In this section, "Grant Program" means the Accessible Homes for Senior Homeowners Grant Program.

(b) There is an Accessible Homes for Senior Homeowners Grant Program.

(c) The Department may make a grant to finance an accessibility-related renovation or repair activity for an elderly homeowner.

(d) The Department may establish standards to determine the eligibility of an applicant under the Grant Program.

(e) In determining whether to make a grant under the Grant Program, the Department shall require that an applicant submit evidence that the applicant cannot undertake the renovation and repairs without a grant.

(f) Grants under the Grant Program may be used in conjunction with other:

  (1) accessible housing for seniors loans; and

  (2) special loan programs under this subtitle.

(g) The Department may require that all or part of the grant under the Grant Program be repaid if conditions specified by the Department occur.

#### Section 4-933

(a) A person may not knowingly make or cause to be made a false statement of material fact, including an overstatement or understatement of financial condition, to influence the action of the Department on a grant or loan or an application for a grant or loan under this subtitle.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 2 years or a fine not exceeding $5,000 or both.

(c) If a borrower violates this section, the Department may immediately accelerate the loan, whether or not a criminal prosecution has begun and regardless of the status of the prosecution.

### Subtitle 10. Neighborhood Housing Services Fund

#### Section 4-1001

(a) In this subtitle the following words have the meanings indicated.

(b) "Fund" means the Neighborhood Housing Services Fund.

(c) "Neighborhood corporation" means a neighborhood housing services corporation established in connection with the Neighborhood Reinvestment Corporation.

(d)

  (1) "Operating budget" means the money necessary to operate a neighborhood corporation, including money to pay:

    (i) administrative, technical, legal, or other expenses; and

    (ii) expenses incurred by an umbrella corporation in operating programs.

  (2) "Operating budget" does not include money allocated to revolving or other loan funds.

(e) "Program" means a program that a neighborhood corporation establishes and supervises to achieve its goals and to provide services within a specific neighborhood.

(f) "Umbrella corporation" means a neighborhood corporation that establishes and supervises at least two programs.

#### Section 4-1002

(a) There is a Neighborhood Housing Services Fund.

(b) The Department shall administer the Fund.

#### Section 4-1003

The Department may adopt regulations to carry out this subtitle.

#### Section 4-1004

(a) To be eligible for a grant under this subtitle, a neighborhood corporation or umbrella corporation shall:

  (1) submit a timely application in the form that the Secretary prescribes;

  (2) create a board of directors composed of:

    (i) a member of the General Assembly;

    (ii) neighborhood residents;

    (iii) representatives of local financial institutions; and

    (iv) representatives of local political subdivisions, if not inconsistent with local law;

  (3) be authorized to establish and administer a revolving loan fund by lending money at flexible rates and terms to neighborhood homeowners who cannot obtain mortgage financing on reasonable terms through normal lending channels to preserve or revitalize neighborhoods and encourage homeownership; and

  (4) be authorized to establish and administer, in cooperation with appropriate officials of the political subdivision, a housing program to bring neighborhood dwellings to acceptable levels of health and safety.

(b) The Secretary or the Secretary's designee shall be a voting member of each neighborhood corporation receiving grants from the Department.

(c) An application for a grant under subsection (a)(1) of this section shall contain:

  (1) a description of the boundaries of the area that the neighborhood corporation or Program serves;

  (2) certification that the applicant is registered with the Neighborhood Reinvestment Corporation;

  (3) certification of incorporation under State law;

  (4) certification of receipt of a ruling from the Internal Revenue Service that the applicant is exempt from federal income taxation;

  (5) certification that the portion of the applicant's annual operating budget that will not be covered by the grant sought has been provided exclusively from political subdivisions or private sources; and

  (6) any other information that the Secretary requires.

#### Section 4-1005

(a)

  (1) Each eligible neighborhood corporation may apply for a grant in an amount up to $50,000 that does not exceed one-third of its annual operating budget.

  (2) Each umbrella corporation may apply for a grant for each program under its supervision in an amount up to $50,000 that does not exceed one-third of the annual operating budget of the program.

(b) If the amount requested by eligible applicants in a fiscal year exceeds the amount of the Fund, the Secretary shall reduce each grant pro rata so that the Fund amount appropriated for that fiscal year is not exceeded.

### Subtitle 11. Operating Assistance Grants

#### Section 4-1101

(a) The Department shall award operating assistance grants to nonprofit organizations to increase their capacity to participate in housing projects and activities authorized by the programs that are financed through the Homeownership Programs Fund under Sec. 4-502 of this title, the Rental Housing Programs Fund under Sec. 4-504 of this title, the Special Loan Programs Fund under Sec. 4-505 of this title, or otherwise financed totally or partly by the Department.

(b) To be eligible for an operating assistance grant under this section, a nonprofit organization must have limited expertise or no recent experience participating in projects or activities financed wholly or partly by the Department.

(c) A nonprofit organization may receive a grant or grants under this section for up to 3 years to increase its capacity to participate in each of the housing development areas of rental housing programs, homeownership programs, and special loan programs.

(d) A grant under this section may be for a term of up to 3 years if the Department finds that:

  (1) the performance of the nonprofit organization in the prior year was acceptable; and

  (2) money is appropriated and available to pay the grant.

#### Section 4-1102

(a) The Department shall award operating assistance grants to nonprofit organizations to further the production or rehabilitation of limited income housing by those organizations or by individuals they help.

(b) A nonprofit organization is eligible for a grant if it meets the performance and other standards that the Department sets and:

  (1) makes an application that:

    (i) describes the housing project;

    (ii) includes evidence of acceptable performance in the prior year, if the nonprofit organization received a grant in the prior year; and

    (iii) is acceptable to the Department;

  (2) has helped individuals to apply for loans from the Department; or

  (3) was responsible for originating applications, as certified by a political subdivision approved by the Department.

#### Section 4-1103

A nonprofit organization may use an operating assistance grant for predevelopment, operating, and overhead costs, including:

(1) staff costs;

(2) organizational costs; and

(3) for a grant under Sec. 4-1102 of this subtitle, costs relating to applying for loans or helping individuals to apply for loans.

#### Section 4-1104

(a) Operating assistance grants under this subtitle may not exceed the amounts that the Department sets.

(b) During a fiscal year, all operating assistance grants under this subtitle shall be made from:

  (1) up to 1% of the total amount of budgeted money in the Homeownership Programs Fund under Sec. 4-502 of this title, the Rental Housing Programs Fund under Sec. 4-504 of this title, and the Special Loan Programs Fund under Sec. 4-505 of this title; and

  (2) money appropriated from any other source.

#### Section 4-1105

The Department shall adopt regulations to carry out this subtitle.

### Subtitle 12. Partnership Rental Housing Program

#### Section 4-1201

(a) In this subtitle the following words have the meanings indicated.

(b) "Fund" means the Partnership Rental Housing Fund.

(c) "Household of lower income" means a household that qualifies under Sec. 4-1206 of this subtitle.

(d) "Housing authority" means a housing authority authorized under Division II of this article.

(e) "Partnership project" means an undertaking that the Program finances to acquire, construct, reconstruct, renovate, or rehabilitate a building or improvement, or a part of a building or improvement.

(f)

  (1) "Partnership rental housing" means rental housing financed under this subtitle.

  (2) "Partnership rental housing" includes apartments, condominium units, cooperatives, town houses, town homes, single room occupancy and shared living unit facilities, and single-family homes.

(g) "Program" means the Partnership Rental Housing Program.

#### Section 4-1202

The General Assembly finds that:

(1) there is a shortage of decent, safe, and sanitary rental housing for households of lower income;

(2) the private sector often cannot develop, improve, operate, and maintain housing for households of lower income; and

(3) to address this shortage, a partnership is needed among the State, political subdivisions, housing authorities, the private sector, and households of lower income to develop, operate, and maintain housing for households of lower income.

#### Section 4-1203

There is a Partnership Rental Housing Program.

#### Section 4-1204

The purposes of the Program are to:

(1) provide decent, safe, and sanitary rental housing for households of lower income;

(2) provide financial assistance to political subdivisions or housing authorities to acquire, construct, reconstruct, renovate, or rehabilitate rental housing affordable to households of lower income;

(3) stimulate the development and ownership of rental housing for households of lower income by political subdivisions, housing authorities, or partnerships that include political subdivisions or housing authorities;

(4) provide financial assistance to private sector entities to acquire, construct, reconstruct, renovate, or rehabilitate housing units:

  (i) for sale to political subdivisions, housing authorities, or partnerships that include political subdivisions or housing authorities, as affordable rental housing for households of lower income; or

  (ii) for occupancy by households of lower income that include one or more individuals with disabilities or special needs;

(5) promote affordable housing programs and increased contributions to the production of affordable rental housing by political subdivisions, housing authorities, and the private sector, including for profit and nonprofit entities;

(6) encourage households of lower income that live in partnership rental housing to contribute actively to the operation or maintenance of the housing or the community;

(7) finance rental housing that is:

  (i) to be occupied by households of lower income;

  (ii) to be owned by political subdivisions or housing authorities or partnerships that include political subdivisions or housing authorities; and

  (iii) expected to be financially self-sufficient, without further governmental financing for maintenance, renovation, or operating subsidies; and

(8) encourage the private sector to provide rental housing for households of lower income that include one or more individuals with disabilities or special needs.

#### Section 4-1205

(a) The Department shall:

  (1) administer the Program;

  (2) adopt policies and procedures that encourage partnership rental housing throughout the State; and

  (3) adopt regulations to carry out the Program, including regulations that specify criteria for local contributions to the cost of partnership projects undertaken by a political subdivision or housing authority.

(b) The Department may establish:

  (1) maximum limits for financing that it will provide to:

    (i) individual partnership rental housing units;

    (ii) any one partnership project; or

    (iii) any political subdivision or housing authority;

  (2) a process for approving financing for partnership projects that encourages a broad geographic distribution of money; and

  (3) the time that a household may occupy the partnership rental housing after the annual income of the household exceeds the continuing occupancy income limits for households of lower income.

(c) In administering the Program, the Department may make loans either directly or through the Administration.

#### Section 4-1206

A household qualifies as a household of lower income:

(1) for initial occupancy, if the gross annual income of the household does not exceed:

  (i) 50% of the statewide median income for a household of like size; or

  (ii) a lower income level that the Secretary establishes for a particular partnership project or for a unit of partnership rental housing to be occupied by one or more individuals with disabilities or special needs; and

(2) for continuing occupancy, if the gross annual income for the household does not exceed the greater of:

  (i) an income level that the Secretary establishes; and

  (ii) an applicable federal requirement.

#### Section 4-1207

(a) Except as provided in subsection (c) of this section, the Department may approve an application for a proposed partnership project only if:

  (1) the application is authorized by the chief elected official of the political subdivision or, if there is no chief elected official, by the governing body of the political subdivision in which the project is located;

  (2) the political subdivision or housing authority:

    (i) contributes from non-State sources the land for the partnership rental housing;

    (ii) funds the part of the acquisition cost of the property that is attributable to the value of the land; or

    (iii) makes a contribution under Sec. 4-1208(d)(2) of this subtitle that equals or exceeds the value of the land;

  (3) the political subdivision or housing authority is to have an ownership interest in the partnership project or in the rental units financed by the Program and sold to the political subdivision or housing authority or to a partnership that includes the political subdivision or housing authority;

  (4) the political subdivision or housing authority directly or indirectly manages the partnership project;

  (5) the rental units financed by the Program are to be occupied on completion of the acquisition, construction, reconstruction, renovation, or rehabilitation by households of lower income;

  (6) unless prohibited by any applicable federal requirement, the households of lower income occupying the partnership project or the part financed by the Program are required to contribute services to enhance or maintain the partnership project or the community in a way that the political subdivision or housing authority accepts; and

  (7) it is reasonable to anticipate that:

    (i) more State subsidies will not be needed for long-term occupancy by households of lower income; and

    (ii) rental income, including any contribution to allow for more affordable rents under Sec. 4-1208(d) of this subtitle, will be enough to pay the operating costs of the partnership project and to build an adequate reserve for the long-term maintenance and renovation of the partnership project.

(b) The rental units financed by the Program may include, as among those that must be occupied by households of lower income, rental units restricted for occupancy to meet other federal or State occupancy requirements.

(c) The Department may approve the use of partnership rental housing funds for a unit of partnership rental housing that does not comply with each requirement set forth in subsection (a) of this section if:

  (1) the unit will be occupied by a household of lower income that includes one or more individuals with disabilities or special needs; and

  (2) the project in which the unit is located complies with the requirements of the other State housing programs financing the project, if any.

#### Section 4-1208

(a) A political subdivision, housing authority, or other eligible borrower may participate in the Program and do all things necessary or convenient to its participation, including:

  (1) developing, acquiring, improving, owning, operating, and managing rental housing;

  (2) borrowing money; and

  (3) mortgaging, pledging, and granting a security interest in real or personal property related to a particular partnership project.

(b) Except as provided in subsection (g) of this section, the Department may not require a borrower to repay money made available under the Program, unless the borrower:

  (1) sells the partnership project; or

  (2) fails to operate the partnership project for the benefit of households of lower income in accordance with agreements between the Department and the political subdivision or housing authority.

(c) The Department shall secure the obligations of the borrower by using a mortgage, deed of trust, or other security device that the Department accepts on the property or on revenues derived from the property.

(d)

  (1) To allow for more affordable rents, a political subdivision or housing authority may contribute local money, including locally administered federal money or federal rental assistance.

  (2) The contributions of political subdivisions or housing authorities under Sec. 4-1207(a)(2)(iii) of this subtitle may include the costs of:

    (i) necessary studies, surveys, tests, plans, and specifications;

    (ii) architectural, design, engineering, and other special services;

    (iii) site preparation;

    (iv) indemnity and surety bonds and premiums on title and hazard insurance; and

    (v) other costs of development.

(e) To participate in the Program and to receive loans, a political subdivision or housing authority may not be required to pledge its full faith and credit.

(f) For rental housing financed from the Fund and owned or managed by a housing authority, this subtitle supersedes:

  (1) Sec.Sec. 12-401, 12-402, and 12-405 of this article; and

  (2) all other restrictions on tenant income under Division II of this article.

(g) If necessary to comply with, or receive the benefit of, federal or other financial assistance, funds provided under the Program may be made available as a deferred payment loan repayable on the later of:

  (1) the occurrence of one of the events set forth in subsection (b) of this section; or

  (2) a maturity date set by the Department.

#### Section 4-1209

(a)

  (1) A person may not knowingly make or cause to be made a false statement or report in a document required to be given to the Department in connection with the Program.

  (2) A person may not knowingly make or cause to be made a false statement or report to influence the action of the Department in connection with the Program.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.

### Subtitle 13. Radium Grant Program

#### Section 4-1301

In this subtitle, "Program" means the Radium Grant Program.

#### Section 4-1302

There is a Radium Grant Program.

#### Section 4-1303

The purpose of the Program is to provide financial assistance to residential well owners who incur the cost of adding a water treatment system to remove radium or gross alpha from well water.

#### Section 4-1304

A county may participate in the Program.

#### Section 4-1305

(a) A county that participates in the Program shall process grant applications and award grants to residential well owners in accordance with this subtitle.

(b)

  (1) The Department may award a grant under the Program only to a residential well owner who resides in a county that participates in the Program.

  (2) The Department shall award a grant equal to the grant awarded by the county.

#### Section 4-1306

A residential well owner is eligible for a grant under this subtitle if the residential well owner:

(1) tests a well and finds that it contains radium or gross alpha levels above the levels recommended by the federal Environmental Protection Agency;

(2) installs a water treatment system to remove excess levels of radium or gross alpha from well water; and

(3) does not earn more than 110% of the statewide or Washington, D.C. Metropolitan statistical area median income.

#### Section 4-1307

(a) The Department shall establish for participating counties a sliding scale formula, based on income, under which residential well owners with lower incomes are eligible for larger grants and those with higher incomes are eligible for smaller grants.

(b) The combined county and State grants shall equal at least 10% but not more than 25% of the cost of the water treatment system that the residential well owner installs.

#### Section 4-1308

The Department may adopt regulations to carry out this subtitle.

### Subtitle 14. Rental Assistance Programs

#### Section 4-1401

In this subtitle, "programs" means rental assistance programs other than the Rental Allowance Program established under Sec. 4-1403 of this subtitle and the Statewide Rental Assistance Voucher Program established under Subtitle 29 of this title.

#### Section 4-1402

There are the Rental Allowance Program and other programs in the Department.

#### Section 4-1403

(a) The Department shall administer the Rental Allowance Program to assist low-income households that are homeless or at risk of being homeless by providing housing assistance payments to or on behalf of eligible households.

(b) The Secretary shall establish:

  (1) income limits for eligibility of low-income households not exceeding 30% of the State or area median income, whichever is higher; and

  (2) minimum standards for eligible dwelling units.

(c) The Secretary shall establish the amount of payments made through the Rental Allowance Program, taking into account factors identified in Sec. 4-1405(d) of this subtitle.

(d) Eligible uses of payments may include rent, security deposits, utilities, and other housing-related expenses.

(e) The Department may administer the Rental Allowance Program by providing monthly housing assistance payments to or on behalf of eligible households directly or through political subdivisions, their local housing agencies or departments, or nonprofit organizations.

(f) Funds appropriated to serve low-income households through the Rental Allowance Program may not be used for other programs authorized under this subtitle.

(g) The Department may adopt regulations to carry out the Rental Allowance Program, including time frames for assistance and other criteria the Secretary considers appropriate.

#### Section 4-1404

The Department may establish and administer programs, including programs to assist households that:

(1) are homeless or at risk of homelessness;

(2) include an individual with a disability or special need;

(3) have been displaced or otherwise impacted by disaster; or

(4) have a critical or emergency housing need.

#### Section 4-1405

(a) The Department may administer the programs by providing monthly housing assistance payments to or on behalf of eligible households directly or through political subdivisions, their local housing agencies or departments, or nonprofit organizations.

(b) In establishing the programs, the Department shall consult with, as appropriate:

  (1) the Department of Human Services;

  (2) the Department of Disabilities; or

  (3) any other unit of State or local government.

(c) The Secretary shall establish criteria for the programs, including:

  (1) income limits for eligibility of households;

  (2) time frames for assistance;

  (3) monthly assistance amounts;

  (4) standards for eligible dwelling units, including types of units, inspection standards, and rent limits;

  (5) eligible uses of assistance payments which may include security deposits, utilities, and other housing related expenses; and

  (6) any other criteria the Secretary considers appropriate.

(d) In establishing the program criteria, the Secretary may consider factors that include:

  (1) household size and expected average income;

  (2) regional variations throughout the State;

  (3) typical housing costs and expenses;

  (4) relevant standards and definitions established for State and federal housing programs;

  (5) housing needs of eligible households and the expected duration of the housing needs; and

  (6) equitable distribution of funds statewide.

(e) The Secretary may establish different criteria for different programs.

#### Section 4-1406

The Department may adopt regulations to carry out the programs.

### Subtitle 16. Residential Mortgage Programs for Certain Counties

#### Section 4-1601

(a) In this subtitle the following words have the meanings indicated.

(b) "Covered county" means:

  (1) a county that has adopted home rule powers under Article XI-F of the Maryland Constitution; or

  (2) Anne Arundel County, Calvert County, Frederick County, Howard County, or Washington County.

(c) "Family of low or moderate income" means a family or individual that a covered county determines cannot afford a price or rent sufficient to induce private enterprise in the covered county to build enough adequate, safe, and sanitary housing without the assistance of a program.

(d) "Program" means a residential mortgage program under this subtitle.

#### Section 4-1602

(a) The General Assembly finds that:

  (1) in many areas of covered counties, including areas that contain presently stable neighborhoods and middle class residential housing, families of low or moderate income cannot purchase, rehabilitate, or maintain decent, safe, and sanitary housing, and so do not have an opportunity for home ownership directly or through a condominium or cooperative;

  (2) the inability of families of low or moderate income under item (1) of this subsection is the result of continuing increases in:

    (i) the cost of construction or rehabilitation;

    (ii) county taxes;

    (iii) heating and electricity expenses;

    (iv) maintenance and repair expenses;

    (v) inflation;

    (vi) the cost of land;

    (vii) the cost of energy conservation; and

    (viii) borrowing costs, including interest;

  (3) the inability of families of low or moderate income to purchase and hold housing in covered counties results in the decline of new housing, the decay of existing housing and neighborhoods, and increased costs for welfare, police, and fire protection;

  (4) the decline in new housing construction and the decay of existing housing have produced a critical shortage of adequate housing, harming the economy of covered counties and the well-being of residents;

  (5) private enterprise cannot construct or rehabilitate adequate housing for families of low or moderate income without the assistance of a program; and

  (6) forcing families of low or moderate income to live in substandard housing is undesirable because it decreases the interest of the families in their communities and the maintenance of their property and their neighborhoods.

(b) The General Assembly finds that:

  (1) it will be hard for many residents in covered counties to find decent, safe, and sanitary housing unless housing is constructed or rehabilitated;

  (2) unless the supply of housing and the ability of families of low or moderate income to get mortgage financing are increased significantly and expeditiously, many residents of covered counties may have to live in unsanitary, overcrowded, or unsafe conditions to the detriment of the health, welfare, and well-being of these individuals and of the whole community of which they are a part; and

  (3) increasing the housing supply in covered counties and the ability of families of low or moderate income to get mortgage financing will:

    (i) help in the clearance, replanning, development of, and redevelopment of blighted areas;

    (ii) reduce the critical shortage of adequate housing; and

    (iii) greatly enhance the maintenance and use of existing housing and neighborhoods.

(c) The General Assembly finds that:

  (1) a major cause of the housing crisis is a lack of:

    (i) money that can be borrowed at a cost low enough to enable families of low or moderate income to afford to own and maintain decent, safe, and sanitary housing; and

    (ii) money with which private mortgage lenders can finance housing; and

  (2) the lack of money has frustrated the maintenance, sale, and purchase of existing housing in covered counties.

(d) The General Assembly finds that covered counties have a basic public interest in:

  (1) providing a supplemental source of single-family residential mortgage money for families of low or moderate income at a cost lower than otherwise prevailing for residential mortgages; and

  (2) stimulating a steady flow of money for residential housing for families of low or moderate income and for low and middle class residential housing to help maintain:

    (i) a well-balanced society;

    (ii) existing housing;

    (iii) established neighborhoods; and

    (iv) a sound tax base.

(e) The General Assembly finds that the power given by this subtitle and the spending of public money as needed to carry out a program serve a public purpose, and this subtitle is in the public interest.

#### Section 4-1603

The purposes of this subtitle are to:

(1) help remedy the conditions described in Sec. 4-1602 of this subtitle;

(2) make residential mortgage loans available to families of low or moderate income at borrowing costs lower than those otherwise prevailing for residential mortgages;

(3) help reduce the shortage of adequate housing; and

(4) help maintain housing and neighborhoods.

#### Section 4-1604

(a) To accomplish the purpose of this subtitle and notwithstanding any other law, a covered county may borrow money by issuing revenue bonds, notes, or other evidences of obligation.

(b) Money under subsection (a) of this section shall be made available for residential mortgage loans to families of low or moderate income, only through mortgage lending institutions by:

  (1) forward commitment mortgage purchase;

  (2) existing mortgage purchase;

  (3) loans to lenders;

  (4) revolving mortgage fund; or

  (5) any other means that the legislative body of the covered county considers appropriate.

#### Section 4-1605

A covered county may collect from borrowers in a program the charges that the legislative body of the covered county considers proper for:

(1) loan processing;

(2) loan administration;

(3) mortgage insurance; and

(4) other costs and expenses of the program.

#### Section 4-1606

(a) The legislative body of a covered county that undertakes a program shall adopt an ordinance or resolution that specifies:

  (1) the proposed program;

  (2) the amount of bonds to be issued;

  (3) the interest rate or rates that the bonds will bear or the method to determine the rate or rates; and

  (4) other provisions consistent with this subtitle that the legislative body considers appropriate to finance mortgage loans.

(b) An ordinance or resolution that authorizes the issuance of bonds shall include findings about:

  (1) the appropriate ranges of income of families of low or moderate income;

  (2) the need for the financing that is allowed under this subtitle;

  (3) the types of housing available and needed in the covered county; and

  (4) other factors that the legislative body of the covered county finds appropriate to establish a program.

(c) A finding by the legislative body of a covered county about the qualification of an individual or family as a family of low or moderate income, or about any other matter connected with a program is conclusive in a suit, action, or proceeding that involves the validity or enforceability of a bond issued under this subtitle or the security for the bond.

#### Section 4-1607

(a) The legislative body of a covered county that issues bonds under this subtitle shall determine:

  (1) the time or times when interest is to be paid on the bonds;

  (2) the time or times when the bonds are to be executed, issued, and delivered;

  (3) the form, denomination, and tenor of the bonds;

  (4) the time or times when the principal of the bonds is to be paid, which may not be more than 40 years after the bonds are issued; and

  (5) the place or places where the bonds are to be paid.

(b) The bonds may be secured by:

  (1) a pledge of mortgages or notes secured by deeds of trust on any type of interest in real or other property, including the real property or other interests held by stock cooperatives or condominiums and their unit owners;

  (2) servicing agreements;

  (3) condemnation proceeds;

  (4) private, governmental, or other mortgage insurance proceeds;

  (5) casualty or special hazard insurance proceeds; or

  (6) any other security that the legislative body of the covered county finds appropriate.

(c) The bonds may provide that, at the option of the covered county, the bonds or any one of them may be called for redemption before maturity, at a price and under the terms and conditions that the legislative body of the covered county fixed before issuing the bonds.

(d) The following are exempt at all times from taxation of every kind and nature whatsoever by the State or a county:

  (1) the principal of a bond;

  (2) the transfer of, interest payable on, or income derived from a bond; and

  (3) profit made by the sale or transfer of a bond.

(e) A bond issued under this subtitle is a negotiable instrument.

(f) A covered county may:

  (1) issue its bonds in coupon form; or

  (2) provide for registration of the bonds as to principal alone or principal and interest.

(g)

  (1) The bonds shall be signed by a commissioner or other chief executive officer of the covered county.

  (2) The seal of the covered county shall be affixed to the bond and attested to by the clerk or the officer exercising the functions of a clerk.

  (3) An officer's signature or countersignature that appears on bonds or coupons is valid even if the officer leaves office before delivery of the bonds.

#### Section 4-1608

(a)

  (1) The bonds shall be sold at public or private sale on the terms that the legislative body of the covered county sets.

  (2) The bonds are not subject to Sec.Sec. 19-205 and 19-206 of the Local Government Article.

(b)

  (1) The bonds and the interest on them shall be limited obligations of the covered county.

  (2) The principal and interest on the bonds shall be payable only from:

    (i) the revenue derived from:

      (1) interest;

      (2) mortgage insurance;

      (3) casualty or special hazard insurance or other insurance proceeds; or

      (4) condemnation proceeds;

    (ii) other revenue derived from mortgage loans or property securing the loans; or

    (iii) other payments or revenues derived from or relating to the making of the loans.

  (3) The bonds or coupons issued under this subtitle:

    (i) are not an indebtedness or a charge against the general credit or taxing powers of the issuing county within the meaning of a constitution, county code provision, or statutory limit; and

    (ii) are not and do not give rise to a monetary liability of the issuing county.

  (4) On the advice of counsel, the face of each bond may plainly state that the bond was issued under this subtitle and is not an indebtedness to which the faith and credit of the county is pledged.

(c) Money received from bonds issued under this subtitle shall be applied solely:

  (1) to make money available through mortgage lending institutions only for residential mortgage loans to families of low or moderate income;

  (2) to establish reserves;

  (3) to pay the necessary expenses of financing; or

  (4) to advance the payment of interest on the bonds during the first 3 years after the date of the bonds.

#### Section 4-1609

(a) A covered county may issue new bonds to pay outstanding bonds in accordance with procedures of this subtitle and Sec. 19-207 of the Local Government Article.

(b) New bonds shall be secured to the same extent and shall have the same source of payment as the bonds refunded.

#### Section 4-1610

(a) A program may provide for loan agreements, security agreements, loan servicing agreements, forms of mortgages, notes and deeds of trust, and other security, documents, agreements, provisions, and other matters as the covered county may find appropriate to implement the financing of the program.

(b) A transaction under this subtitle is not a capital project within the meaning of a charter or statutory provision.

(c) A transaction under this subtitle shall be authorized by ordinance or resolution without a referendum or other procedure not applicable to all ordinances or resolutions enacted in the covered county.

### Subtitle 17. Self-Help Homeownership Technical Assistance Program

#### Section 4-1701

(a) In this subtitle the following words have the meanings indicated.

(b) "Family of limited income" means a family or individual that qualifies under Sec. 4-1706 of this subtitle.

(c) "Owner-builder" means an individual or family that provides all, or a substantial amount, as the Department determines, of the labor to build a dwelling that will be the principal residence of the individual or family.

(d) "Program" means the Self-Help Homeownership Technical Assistance Program.

(e) "Project" means six or more dwellings near one another that are built or rehabilitated by owner-builders or self-help rehabilitators who use self-help methods and work as a team on each other's dwellings.

(f) "Self-help rehabilitator" means an individual or family that provides all, or a substantial amount, as the Department determines, of the labor to rehabilitate, renovate, or improve the principal residence of the individual or family.

(g) "Technical assistance grant" means a grant under the Program.

#### Section 4-1702

The General Assembly finds that:

(1) homeownership is a stabilizing factor for communities and families and is the best way for families of limited income to build equity and move out of poverty;

(2) homeownership has become less affordable over time because incomes have not kept pace with the rising costs of homeownership;

(3) self-help housing helps families of limited income to become homeowners, increasing their financial stability;

(4) families working together in groups to build their homes help to create stronger communities; and

(5) there have been three successful federally financed self-help programs in the State, and modeling a State self-help ownership program on a well-tested federal program will increase homeownership opportunities for families of limited income across the State.

#### Section 4-1703

There is a Self-Help Homeownership Technical Assistance Program.

#### Section 4-1704

The purpose of the Program is to make technical assistance grants to expand:

(1) the production of decent and affordable housing for families of limited income through self-help in rehabilitation and construction;

(2) homeownership opportunities for those who would not have these opportunities without the cost savings achieved by self-help; and

(3) self-reliance, pride of ownership, and sense of community for participants.

#### Section 4-1705

The Department shall:

(1) administer the Program;

(2) establish guidelines to determine eligibility of applicants for technical assistance grants; and

(3) adopt regulations to carry out the Program.

#### Section 4-1706

(a) A family or individual qualifies as a family of limited income if the income of the family or individual does not exceed the upper income limit that the Secretary establishes.

(b) Factors that the Secretary shall consider in setting the upper income limit under subsection (a) of this section include:

  (1) the total amount of family or individual income deemed available for housing;

  (2) the size of the family;

  (3) the ability of the family or individual to compete successfully in the private housing market;

  (4) the cost and condition of available housing; and

  (5) standards and definitions under related federal and State housing programs.

#### Section 4-1707

The Department may establish standards to determine eligibility for a technical assistance grant, which may include:

(1) the number of families of limited income that the requested grant will serve;

(2) the extent to which the applicant will use federal, State, and local programs and resources in the project;

(3) the organizational ability of the applicant to carry out the project;

(4) the feasibility of the project;

(5) the cost in self-help housing fund money per unit of the project; and

(6) the extent to which project participants will use self-help labor.

#### Section 4-1708

(a) The Department may award a technical assistance grant to a political subdivision or nonprofit organization to help families of limited income that are owner-builders or self-help rehabilitators.

(b) A technical assistance grant under this section shall be used to:

  (1) help, train, and supervise owner-builders and self-help rehabilitators in self-help construction activities and techniques;

  (2) help in project development, including:

    (i) preparing plans for self-help housing;

    (ii) preparing contracts for professional services;

    (iii) applying for financing;

    (iv) packaging applications for assistance;

    (v) preparing subdivision maps;

    (vi) reviewing engineering plans and specifications for construction and rehabilitation projects; and

    (vii) complying with the requirements of political subdivisions and funding entities; and

  (3) pay the administrative costs of providing technical assistance for the activity that the Department finances.

(c) A technical assistance grant may not be:

  (1) used to purchase land, materials, tools, or construction equipment or to pay for construction costs; or

  (2) awarded for a project of fewer than six dwellings.

#### Section 4-1709

The Department may award a technical assistance grant to a political subdivision, public entity, or nonprofit organization to provide owner-builders and self-help rehabilitators with information and technical assistance about any topic that the Department finds will further the purpose of the Program, including:

(1) cost savings by owner-builders in constructing a principal residence and by self-help rehabilitators in rehabilitating, renovating, or improving a principal residence;

(2) construction materials and methods;

(3) local material sources;

(4) local technical resources;

(5) financing requirements and opportunities;

(6) site acquisition;

(7) insurance and legal requirements;

(8) building and housing codes and standards; and

(9) other available housing alternatives.

#### Section 4-1710

(a) The Department may award a technical assistance grant only if the applicant agrees to:

  (1) a budget that states the types and amounts of expenditures that may be made with the grant;

  (2) the manner, timing, and conditions for disbursement of money to the grantee;

  (3) a timetable to complete each stage of the project and for final project completion; and

  (4) terms to ensure compliance with regulations, special conditions imposed by grant approval, and any other terms or conditions that the Department specifies.

(b) The amount of a technical assistance grant may not exceed 20% of the average purchase price, over the last 3 fiscal years for which data are available, of a home:

  (1) financed by a mortgage loan that the Administration purchased under Sec. 4-239 of this title; and

  (2) located in the region where the technical assistance grant is to be awarded.

(c)

  (1) Except as provided in paragraph (2) of this subsection, a technical assistance grant recipient shall complete the project within 2 years after the effective date of the grant.

  (2) The Department may extend the term of a technical assistance grant because of delays beyond the reasonable control of the recipient.

(d) The Department may require that all or part of a technical assistance grant be repaid when conditions that the Department specifies occur.

### Subtitle 18. Workforce Housing Grant Program

#### Section 4-1801

(a) In this subtitle the following words have the meanings indicated.

(b) "Affordable" means that housing costs do not exceed 30% of a household's income.

(c) "Area median income" means the median household income for the area adjusted for household size as published and annually updated by the United States Department of Housing and Urban Development.

(d) "Development costs" means costs related to acquisition, site clearance and preparation, relocation, construction, renovation, financing, refinancing, engineering, or architectural plans.

(e) "Fund"  means the Workforce Housing Fund.

(f) "Household of low or moderate income" means a household that a qualifying local government determines cannot afford a sales price or rent sufficient to induce private enterprise in the area of the qualifying local government to develop enough adequate and safe housing without the assistance of a program.

(g) "Housing costs" means:

  (1) rent for a rental housing unit; or

  (2) mortgage principal and interest, real property taxes, and insurance for a housing unit that is for sale.

(h) "Net proceeds of transfer" means all amounts paid to the original buyer or obligations of the original buyer assumed by a purchaser of a workforce housing unit minus:

  (1) reasonable costs paid by the original buyer;

  (2) the combined amount of Program funds and qualifying local government matching funds used to develop the workforce housing unit; and

  (3) other liens as permitted by regulation by the Department.

(i) "Priority funding area" has the meaning stated in Sec. 5-7B-02 of the State Finance and Procurement Article.

(j) "Program" means the Workforce Housing Grant Program.

(k) "Qualifying local government" means a county or municipal corporation that qualifies for participation in the Program under Sec. 4-1803 of this subtitle.

(l) "Workforce housing" means:

  (1) rental housing that is affordable for a household with an aggregate annual income between 50% and 100% of the area median income; or

  (2) homeownership housing that:

    (i) except as provided in item (ii) of this item, is affordable to a household with an aggregate annual income between 60% and 120% of the area median income; or

    (ii) in target areas that are recognized by the Secretary for purposes of administering the Maryland Mortgage Program, is affordable to a household with an aggregate annual income between 60% and 150% of the area median income.

#### Section 4-1802

(a) There is a Workforce Housing Grant Program.

(b) The Program provides flexible funds to qualifying local governments for workforce housing programs, including programs that finance development costs.

(c) The Program shall be operated with money in the Fund.

#### Section 4-1803

(a) A local government qualifies for participation in the Program if:

  (1) the local government has:

    (i) a 5-year consolidated plan approved by the United States Department of Housing and Urban Development; or

    (ii) a comprehensive plan;

  (2) the plans listed in item (1) of this subsection:

    (i) have a workforce housing element;

    (ii) assess workforce housing needs; and

    (iii) contain goals, objectives, and policies to preserve or develop workforce housing; and

  (3) the local government provides a statement to the Department indicating:

    (i) a desire to participate in the Program; and

    (ii) a reasonable expectation of the local government's ability to provide the matching funds required under Sec. 4-1804 of this subtitle.

(b) The workforce housing element in the 5-year consolidated plan or the comprehensive plan of a qualifying local government may include:

  (1) preservation and renovation of existing housing stock;

  (2) redevelopment of existing residential areas;

  (3) streamlined regulatory processes and reduced regulatory fees for construction or renovation;

  (4) financial incentives for construction and renovation including local property tax credits;

  (5) special zoning regulations for construction and renovation including inclusionary zoning;

  (6) efforts to preserve workforce housing stock for subsequent first-time homebuyers and renters;

  (7) coordination with neighboring jurisdictions;

  (8) coordination with private sector employers; and

  (9) leveraging of federal financial assistance.

#### Section 4-1804

(a) A qualifying local government shall provide a dollar-for-dollar match for Program funds used to develop workforce housing units under this subtitle.

(b) In determining whether a local government has met the match requirement under subsection (a) of this section, the Department may consider the local government's:

  (1) costs to administer a program under this subtitle; and

  (2) financial commitments to other affordable or workforce housing initiatives.

#### Section 4-1805

The Department shall proportionately distribute the annual appropriation of Program funds as follows:

(1) if a county is a qualifying local government, and no municipal corporation in the county is a qualifying local government, the Department shall distribute Program funds to the county based on the county's share of the State population;

(2) if a county is a qualifying local government, and a municipal corporation in the county is also a qualifying local government, the Department shall:

  (i) determine the county's proportionate share of Program funds based on the county's share of the State population; and

  (ii) from the amount of Program funds determined under item (i) of this item, distribute:

    (1) to each qualifying local government in the county that is a municipal corporation, an amount of Program funds based on the municipal corporation's share of the county population; and

    (2) to the county, the balance of the county's share of Program funds; or

(3) if a county is not a qualifying local government, but a municipal corporation in the county is a qualifying local government, the Department shall:

  (i) determine the county's proportionate share of Program funds based on the county's share of the State population; and

  (ii) distribute to each qualifying local government in the county that is a municipal corporation, a proportionate share of the amount of Program funds determined under item (i) of this item based on the municipal corporation's share of the county's population.

#### Section 4-1806

Before drawing down any Program funds, a qualifying local government shall:

(1) provide evidence satisfactory to the Department that the Program funds will be matched by the qualifying local government on a dollar-for-dollar basis; and

(2) meet other Program criteria adopted by the Secretary.

#### Section 4-1807

The Department shall redistribute among qualifying local governments the Program funds that have not been drawn down by other local governments within a 2-year period.

#### Section 4-1808

(a) A qualifying local government shall use Program funds for development costs associated with a workforce housing development located in a priority funding area in accordance with the 5-year consolidated plan or comprehensive plan of the qualifying local government.

(b) A qualifying local government may request that its program funds or match be expended by the Department through the Department's existing housing programs.

#### Section 4-1809

With the consent of the Department, in appropriate circumstances, a qualifying local government may extend the income eligibility limits for a workforce housing unit developed with Program funds to include a household of low or moderate income.

#### Section 4-1810

(a) The Secretary shall establish annually the maximum amount of Program funds that a qualifying local government may use to develop a workforce housing unit.

(b) The per unit maximum established by the Secretary shall take into account the regional average construction costs applicable to the qualifying local government for a comparable workforce housing unit.

#### Section 4-1811

(a) Rental units developed under this subtitle shall remain affordable as workforce housing for a period of at least 25 years.

(b) If an original buyer of a homeownership workforce housing unit developed through the Program transfers title to the unit at any time, the original buyer shall pay to the Department 100% of the combined amount of Program funds and qualifying local government matching funds used to develop the unit.

(c) If an original buyer of a homeownership workforce housing unit developed through the Program transfers title to the unit:

  (1) within 5 years of the date of purchase, the original buyer shall pay the lesser of 20% of the net proceeds of transfer to the Department or a 5% annual return on the Program funds provided for the unit;

  (2) during the period that is more than 5 years but less than 15 years from the date of purchase, the original  buyer shall pay  to the Department the lesser of a percentage of the net proceeds of transfer that begins at 20% and declines by 2% for each subsequent year of ownership or a 5% annual return on the Program funds provided for the unit; and

  (3) during the period that is 15 years or more from the date of purchase, the original buyer is not required to pay  any portion of the net proceeds of transfer to the Department.

(d) The Department shall distribute to the qualifying local government:

  (1) of the funds paid by the original buyer to the Department under subsection (b) of this section, an amount equal to the matching funds provided by the qualifying local government for the homeownership workforce housing unit; and

  (2) of the funds paid by the original buyer to the Department under subsection (c) of this section, a proportionate share based on the amount of matching funds provided by the qualifying local government for the homeownership workforce housing unit.

(e) The Department and the qualifying local governments shall use the funds received under this section to develop workforce housing under the Program.

(f) The contract of sale to the original buyer shall disclose all the requirements for repayment to the Department under this section in the event of a transfer of title, including the combined amount of Program funds and qualifying local government matching funds.

(g)

  (1) The amounts owed to the Department in the event of a transfer of title of a homeownership workforce housing unit under this section shall be secured by a recorded lien on the homeownership workforce housing unit.

  (2) The lien created under this subsection may be a subordinate lien.

  (3) The Department may charge a fee for servicing a lien created under this subsection.

#### Section 4-1812

A qualifying local government shall report annually to the Department on or before January 1 of each year on the use of Program funds.

#### Section 4-1813

The Secretary shall adopt regulations to carry out the purposes of the Program.

### Subtitle 19. Disaster Relief Housing Program

#### Section 4-1901

There is a Disaster Relief Housing Program within the Department of Housing and Community Development.

#### Section 4-1902

(a) The purpose of the Program is to provide financial assistance in an area covered by a state of emergency declared under Sec. 14-107 of the Public Safety Article or in a federally declared disaster area to rehabilitate or replace a primary residence to:

  (1) a family whose primary residence was damaged or destroyed by the disaster; and

  (2) a nonprofit entity that assists a family in rehabilitating and replacing a primary residence destroyed by the disaster.

(b) The Department may continue to provide financial assistance under this subtitle after the expiration of a state of emergency declared under Sec. 14-107 of the Public Safety Article.

#### Section 4-1903

(a) The Department may provide financial assistance under the Program utilizing funds from:

  (1) any fund or program under Division I of this article; or

  (2) any other source of funds available to the Department.

(b) The Department may provide any type of financial assistance permitted by Division I of this article to recipients under the Program.

(c) In addition to the type of financial assistance allowed under subsection (b) of this section, the Department may provide financial assistance under a buy-down program that reduces the amount a borrower pays on a loan obtained from the private market or from the Department for a defined period of time.

#### Section 4-1904

(a)

  (1) The Secretary shall adopt regulations, guidelines, and eligibility requirements for implementing the Program.

  (2) The guidelines and eligibility requirements may be different for each disaster.

(b) The Secretary shall establish income limits for the Program in connection with each disaster.

(c) The eligibility requirements of any State fund or program from which funds are utilized for providing financial assistance, including maximum income limits, may not apply to financial assistance provided to recipients under the Program.

(d) Repayments of financial assistance under the Program shall be paid to the source of funds that was used to provide the financial assistance.

#### Section 4-1905

(a) The Department shall issue to the General Assembly, in accordance with Sec. 2-1257 of the State Government Article:

  (1) a preliminary report 6 months after the Program is initially activated for each disaster; and

  (2) a final report on or before 18 months after the Program is initially activated for each disaster.

(b) The reports shall include:

  (1) the amount and type of assistance provided;

  (2) the counties in which the assistance was provided; and

  (3) the names of any financial institutions that provided assistance under the Program.

### Subtitle 20. Energy-Efficient Homes Construction Loan Program

#### Section 4-2001

(a) In this subtitle the following words have the meanings indicated.

(b) "Fund" means the Energy-Efficient Homes Construction Fund.

(c) "Low-energy home" means a home that achieves a Home Energy Rating System (HERS) Index rating:

  (1) of 50 or lower; or

  (2) as determined by the Department in regulations.

(d) "Net-zero home" means a home that is designed to produce an amount of energy in 1 year that is equal to the amount of energy that the home uses in 1 year.

(e) "Program" means the Energy-Efficient Homes Construction Loan Program.

#### Section 4-2002

(a) There is an Energy-Efficient Homes Construction Loan Program.

(b) The purpose of the Program is to provide construction loans to persons to construct low-energy homes and net-zero homes.

(c) The Program shall be operated with money in the Fund.

#### Section 4-2003

(a) The Department shall:

  (1) administer the Program;

  (2) attach to a Program loan the terms needed to carry out the Program;

  (3) establish eligibility standards for Program loans;

  (4) establish interest rates that may be as low as 0% or as high as is reasonable to make the project viable; and

  (5) adopt regulations to carry out the Program, including regulations designed to increase participation of minority business enterprises in the Program.

(b) In setting the terms and interest rates for Program loans, the Department may:

  (1) offer preferred interest rates and terms for loans used to finance net-zero homes; and

  (2) establish different interest rates based on the projected energy efficiency of the home to be constructed.

(c) The Department may:

  (1) contract for services related to the Program;

  (2) contract with private mortgage servicers to perform on behalf of the Department functions the servicers ordinarily perform, including foreclosure and employment of counsel;

  (3) charge a nonrefundable application fee and other customary loan fees;

  (4) enter into agreements with lenders or other entities to provide credit enhancement or collectively lend money for the construction of net-zero and low-energy homes;

  (5) purchase or commit to purchase from mortgage lenders notes or mortgages that meet the requirements of this subtitle, any regulations adopted under this subtitle, and appropriate Program directives;

  (6) modify the interest rate, the time or amount of payment, or any other term of a Program loan to facilitate repayment of the Program loan and to achieve the purpose of the Program; and

  (7) without approval or execution by the Board of Public Works:

    (i) assign a mortgage for value;

    (ii) release a mortgage;

    (iii) foreclose a mortgage;

    (iv) acquire property that secures a loan in default; and

    (v) encumber, sell, or otherwise dispose of property acquired in connection with a loan in default.

(d) On or before January 1 each year, the Department shall submit a report to the General Assembly, in accordance with Sec. 2-1257 of the State Government Article, on regulations adopted under subsection (a)(5) of this section to increase participation of minority businesses in the Program and the outcome of that effort.

#### Section 4-2004

(a) Proceeds of a Program loan shall be used only for:

  (1) property acquisition and development costs for the construction of a net-zero home or low-energy home; and

  (2) settlement and closing costs.

(b) A Program loan shall be secured by a mortgage lien that:

  (1) may be subordinate to other mortgage liens; and

  (2) may include terms, including deferred payment of principal and interest, that the Department considers necessary to make the project viable.

(c) To apply for a loan under this subtitle, an applicant shall submit:

  (1) a completed application in a form that the Department requires;

  (2) information on projected energy usage, project design, and marketing data; and

  (3) any other information or documentation that the Department considers necessary to make a determination on the loan.

(d)

  (1) The Department may give a preference to an application for:

    (i) a net-zero home; or

    (ii) a project that includes financing from other sources in addition to the Program loan.

  (2) In providing assistance under the Program for a net-zero home, the Department shall give preference to applications that will use the services of small, minority, women-owned, and veteran-owned businesses in the State in the clean energy industry, particularly businesses that provide employment for individuals trained through workforce development programs supported by the Strategic Energy Investment Fund under Sec. 5-1501 of the Economic Development Article and through the Clean Energy Workforce Account under Sec. 11-708.1 of the Labor and Employment Article.

#### Section 4-2005

(a)

  (1) A person may not knowingly make or cause to be made a false statement or report in a document required to be submitted to the Department under an agreement relating to a Program loan.

  (2) A loan applicant may not knowingly make or cause to be made any false statement or report to influence an action of the Department on a Program loan application or a Program loan already made.

(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to imprisonment not exceeding 5 years or a fine not exceeding $50,000 or both.

#### Section 4-2006

(a) There is an Energy-Efficient Homes Construction Fund.

(b) The Department shall administer the Fund.

(c)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund.

(d) The Fund consists of:

  (1) money appropriated in the State budget to the Fund;

  (2) repayments or prepayments of principal and payments of interest on loans made under the Energy-Efficient Homes Construction Loan Program;

  (3) investment earnings of the Fund; and

  (4) any other money from any other source accepted for the benefit of the Fund.

(e) The Department may use the Fund only to:

  (1) pay expenses of the Program;

  (2) provide credit enhancement under the Program; and

  (3) make or purchase loans under the Program.

(f)

  (1) The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested.

  (2) Any investment earnings of the Fund shall be paid into the Fund.

### Subtitle 21. Interagency Council on Homelessness

#### Section 4-2101

(a) In this subtitle the following words have the meanings indicated.

(b) "Continuum of Care" means a regional or local planning body that coordinates housing and services funding for homeless families and individuals.

(c) "Council" means the Interagency Council on Homelessness.

#### Section 4-2102

There is an Interagency Council on Homelessness.

#### Section 4-2103

(a) The Council consists of the following members:

  (1) the Secretary of Aging, or the Secretary's designee;

  (2) the Secretary of Budget and Management, or the Secretary's designee;

  (3) the Secretary of Health, or the Secretary's designee;

  (4) the Secretary, or the Secretary's designee;

  (5) the Secretary of Human Services, or the Secretary's designee;

  (6) the Secretary of Labor, or the Secretary's designee;

  (7) the Secretary of Public Safety and Correctional Services, or the Secretary's designee;

  (8) the State Superintendent of Schools, or the State Superintendent's designee;

  (9) the Secretary of Transportation, or the Secretary's designee;

  (10) the Secretary of Veterans and Military Families, or the Secretary's designee;

  (11) the Secretary of Juvenile Services, or the Secretary's designee;

  (12) the Secretary of Disabilities, or the Secretary's designee; and

  (13) the following members, appointed by the Governor:

    (i) one representative of the Governor's Office for Children;

    (ii) three representatives of local Continuums of Care;

    (iii) nine representatives from diverse geographical regions of the State engaged in homeless advocacy with a focus on housing, employment, and access to health care; and

    (iv) one community representative who has personally experienced homelessness.

(b) The Governor may remove a member for incompetence or misconduct.

#### Section 4-2104

The Secretary, or the Secretary's designee, shall serve as chair of the Council.

#### Section 4-2105

(a) A majority of the members then serving on the Council is a quorum.

(b) The Council shall determine the times and places of its meetings.

(c) Except as provided in subsection (d) of this section, a member of the Council:

  (1) may not receive compensation as a member of the Council; but

  (2) is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

(d) A member of the Council appointed under Sec. 4-2103(a)(13)(iii) or (iv) of this subtitle who is currently experiencing homelessness or has lived experience of homelessness is entitled to:

  (1) reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget; and

  (2) reasonable compensation for the member's services as determined by a compensation policy administered by the Department.

#### Section 4-2106

The Department shall provide staff for the Council.

#### Section 4-2107

The Council shall: 

(1) coordinate State policy and working relationships among State, local, and nonprofit agencies concerning efforts to remedy and prevent homelessness;

(2) coordinate data sharing between local Continuums of Care;

(3) coordinate outreach to each Continuum of Care to develop joint strategies that impact State and federal funding efforts to remedy and prevent homelessness;

(4) determine comprehensive and effective collaborative strategies and best practices for remediation and prevention of homelessness in the State, in particular addressing the differing needs of the State's geographic areas;

(5) review and analyze the need for and availability of affordable and accessible housing resources to address the needs of homeless individuals throughout the State;

(6) recommend changes necessary to alleviate or prevent homelessness, including making recommendations annually to the General Assembly, in accordance with Sec. 2-1257 of the State Government Article, and appropriate State agencies and organizations regarding effective policies, effective distribution of resources, and access to available services and programs;

(7) identify supportive services for special populations, including veterans, youth, families, and individuals with behavioral health problems;

(8) disseminate information and educate the public about the prevalence and causes of and responses to homelessness;

(9) solicit input from the advocacy community, the business community, the faith community, and consumers regarding policy and program development; and

(10) determine best practices and models for providing emergency shelter and shelter diversion, including ensuring the health, safety, and security of shelter residents, providing client-centered and trauma-informed support services, and ensuring equal access to protected classes under applicable federal, State, and local civil rights laws.

#### Section 4-2108

The Department shall adopt regulations to govern the development, implementation, and evaluation of policies and programs to make homelessness rare and, if it occurs, of brief duration.

### Subtitle 22. Crisis Shelter Home Program for the Homeless

#### Section 4-2201

(a) In this subtitle the following words have the meanings indicated.

(b) "Client" means an individual or a family who is in need of housing and is not eligible for other available housing services.

(c) "Program" means the Crisis Shelter Home Program for the Homeless.

#### Section 4-2202

The General Assembly finds and declares that:

(1) an increasing number of people in the State are homeless;

(2) homeless people have been ignored by State units;

(3) current State-operated programs do not adequately address the problem; and

(4) as a result, there is a lack of quality emergency public or private housing available for homeless people.

#### Section 4-2203

(a) There is a Crisis Shelter Home Program for the Homeless in the Department.

(b) The purpose of the Program is to provide crisis shelter homes, meals, and counseling to clients.

(c) At least one crisis shelter home shall be located in a major population center of the State to facilitate the use of the shelter by clients living in the region surrounding the shelter.

#### Section 4-2204

The Maryland Department of Health may not use a shelter home as part of its discharge service plan.

#### Section 4-2205

(a) A shelter home:

  (1) shall provide clients with a temporary residence and necessary counseling to link clients to appropriate community services to stabilize the clients' living conditions;

  (2) shall accept, from the police and other referral sources in the community, clients for temporary shelter;

  (3) shall conform to applicable State and local fire codes, health codes, and zoning ordinances; and

  (4) is subject to the regulations adopted by the Department.

(b) The Department shall:

  (1) establish standards of care and admission policies for shelter homes;

  (2) monitor the operation of the shelter homes; and

  (3) annually evaluate the effectiveness of the shelter homes.

(c) The Department may contract with private nonprofit organizations to operate the Program.

#### Section 4-2206

Clients shall have cooperative responsibility for housekeeping duties in a shelter home.

#### Section 4-2207

The Maryland Department of Health shall:

(1) give a client evaluated by a shelter home priority access, as appropriate, to an institution that the Maryland Department of Health supervises; and

(2) supply appropriate mental health services to the client.

#### Section 4-2208

Housing may not be provided under this subtitle to an applicant for housing who is not a resident of the State at the time the application is made.

#### Section 4-2209

Funds to operate the Program shall be as provided in the State budget.

### Subtitle 23. Housing Navigator and Aftercare Program

#### Section 4-2301

In this subtitle, "Program" means the Housing Navigator and Aftercare Program.

#### Section 4-2302

There is a Housing Navigator and Aftercare Program in the Department.

#### Section 4-2303

The purpose of the Program is to assist families and individuals who are experiencing, or who are in imminent danger of, a housing crisis in obtaining and maintaining permanent housing.

#### Section 4-2304

A family may apply for Program services if the family is the recipient of or is in the process of applying for temporary cash assistance, as defined in Sec. 5-301 of the Human Services Article.

#### Section 4-2305

A housing navigator shall assist a family or an individual client with securing and maintaining permanent, affordable housing by:

(1) assisting the client with searching for and obtaining permanent, affordable housing;

(2) developing a comprehensive, current list of housing resources and expanding the list of housing resources to include new resources;

(3) establishing a working relationship with the client and advocating for the client with landlords, property managers, realty companies, and other sources of low-income housing;

(4) working with a client's case manager, when applicable, to coordinate services to the client;

(5) assisting the client, as needed, with issues that contribute to chronic housing problems, such as budgeting and household management; and

(6) performing other duties as assigned by the Department.

#### Section 4-2306

(a) Program funds may be used for:

  (1) salary and FICA for housing navigators and aftercare case managers;

  (2) client-related expenses, including:

    (i) first and final months' rent;

    (ii) transportation for housing searches;

    (iii) moving expenses;

    (iv) essential furnishings;

    (v) storage;

    (vi) arrearages;

    (vii) credit checks and housing application fees;

    (viii) security deposits;

    (ix) utility deposits; and

    (x) other identified needs; and

  (3) other items that the Department designates.

(b) A local administrative agency shall be designated by the Department or a local government to manage the Program in a particular subdivision, provide services, and provide funds for additional costs, including operating costs, related to the Program.

#### Section 4-2307

Subject to the limitations of the State budget, beginning in fiscal year 2019 and for each fiscal year thereafter, the Governor shall include in the annual budget an appropriation for the Program of $516,828.

### Subtitle 24. Homeless Women and Youth -- Feminine Hygiene Products

#### Section 4-2401

(a)

  (1) In this subtitle the following words have the meanings indicated.

  (2) "Feminine hygiene products" means tampons and sanitary napkins for use in connection with the menstrual cycle.

  (3) "Local administering agency" means the agency designated by the Department or a local government to manage the programs for transitional housing services, including the Homeless Women - Crisis Shelter Home Program, and to provide a service directly or by contract with a service provider.

  (4) "Service provider" means a public or private nonprofit that contracts with the Department or a local administering agency to provide shelter services for homeless individuals.

(b)

  (1) The Department shall make available to:

    (i) service providers and local administering agencies for service providers a supply of feminine hygiene products sufficient to meet the needs of female residents in shelters; and

    (ii) county boards of education a supply of feminine hygiene products sufficient to meet the needs during the normal school year of female students who are determined to be homeless children or youth under the federal McKinney-Vento Homeless Assistance Act.

  (2) The feminine hygiene products provided under paragraph (1) of this subsection shall be made available free to:

    (i) service providers, local administering agencies for service providers, and female residents in shelters; and

    (ii) county boards of education and qualifying female students in schools.

(c) Each county board of education, through school nurses, shall make available to female students who are determined to be homeless children or youth under the federal McKinney-Vento Homeless Assistance Act a free supply of feminine hygiene products, as provided under subsection (b) of this section.

### Subtitle 25. Qualified Workforce Housing Tax Credit

#### Section 4-2501

(a) In this subtitle the following words have the meanings indicated.

(b) "Opportunity zone" means an area that has been designated as a qualified opportunity zone in the State under Sec. 1400Z-1 of the Internal Revenue Code.

(c) "Qualified workforce housing project" means a workforce housing project in an opportunity zone that meets requirements for eligibility for the State tax credit as specified in regulations that the Secretary adopts under Sec. 4-2502 of this subtitle.

(d) "State tax credit" means the income tax credit allowed under Sec. 10-749 of the Tax - General Article.

(e) "Workforce housing" has the meaning stated in Sec. 4-1801 of this title.

#### Section 4-2502

(a) The owner of a qualified workforce housing project or the developer of a proposed project that will become a qualified workforce housing project may apply to the Secretary for allocation to the project of a portion of the State tax credit.

(b) An application under this section shall be made in the form and manner and contain any information that the Secretary requires by regulation.

(c)

  (1) The Secretary may require that the owner of a qualified workforce housing project, as a condition to receiving an allocation of the State tax credit, enter into a written regulatory agreement with the Secretary under terms and conditions set by the Secretary, regarding the use of the project.

  (2) The Secretary may require that any agreement required by the Secretary under this subsection be filed in the official land records of the county where the project is located.

  (3) The Secretary and any local agency or authority designated by the Secretary may enforce an agreement required by the Secretary under this section in the event the owner fails to satisfy any of the requirements of the agreement.

  (4) The Secretary may not require that the owner of a qualified workforce housing project, as a condition to receiving an allocation of the State tax credit, use the bonding authority of the State.

(d) The Secretary shall adopt:

  (1) regulations or policies establishing criteria by which the State tax credit will be allocated among qualified workforce housing projects; and

  (2) any other regulations necessary to administer the provisions of this subtitle.

(e) Any project that receives an allocation of a portion of the State tax credit shall be restricted in occupancy as specified in the regulations adopted by the Secretary under subsection (d) of this section for a period of at least 30 years beginning with the first taxable year in which a State tax credit is claimed by the owner.

#### Section 4-2503

(a)

  (1) The maximum aggregate available State tax credit that may be allocated for each fiscal year equals the lesser of:

    (i) the amount appropriated for the Qualified Workforce Housing Tax Credit Reserve Fund for that fiscal year in the State budget as approved by the General Assembly; or

    (ii) $4,000,000.

  (2) The Secretary may allocate the aggregate available State tax credit for a fiscal year among projects to be qualified workforce housing projects to be placed in service during or after that fiscal year.

  (3) Any part of the aggregate available State tax credit for any fiscal year that is not allocated by the Secretary in that fiscal year may be carried over and allocated for any subsequent fiscal year.

(b)

  (1) In this subsection, "Reserve Fund" means the Qualified Workforce Housing Tax Credit Reserve Fund established under paragraph (2) of this subsection.

  (2)

    (i) There is a Qualified Workforce Housing Tax Credit Reserve Fund.

    (ii) The Reserve Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

    (iii) The money in the Reserve Fund shall be invested and reinvested by the State Treasurer, and interest and earnings shall be credited to the General Fund of the State.

  (3)

    (i)

      (1) Except as otherwise provided in  this subparagraph, for any fiscal year, the Secretary may not allocate tax credits under this subtitle in the aggregate totaling more than the amount appropriated for the Reserve Fund for that fiscal year in the State budget as approved by the General Assembly.

      (2) If the aggregate credit amounts allocated in a fiscal year total less than the amount appropriated for the Reserve Fund for that fiscal year, any excess amount shall remain in the Reserve Fund and may be allocated for the next fiscal year.

      (3) For any fiscal year, if funds are transferred from the Reserve Fund under the authority of any provision of law other than paragraph (4) of this subsection, the maximum credit amounts in the aggregate that the Secretary may allocate shall be reduced by the amount transferred.

    (ii) For each fiscal year, the Governor may include in the budget bill an appropriation for the Reserve Fund.

    (iii) Notwithstanding the provisions of Sec. 7-213 of the State Finance and Procurement Article, the Governor may not reduce an appropriation for the Reserve Fund in the State budget as approved by the General Assembly.

  (4)

    (i) Except as provided in this paragraph, money appropriated for the Reserve Fund shall remain in the Reserve Fund.

    (ii)

      (1) Within 15 days after the end of each calendar quarter, as to each qualified workforce housing project for which a final credit certificate was issued during the quarter, the Department shall notify the Comptroller of:

      (A) the maximum credit amount initially allocated to the project; and

      (B) the final certified credit amount for the project.

      (2) On notification that the final credit for a project has been certified, the Comptroller shall transfer an amount equal to the credit amount initially allocated to the project from the Reserve Fund to the General Fund of the State.

#### Section 4-2504

(a) On or before the last day of the taxable year in which a qualified workforce housing project that has been allocated a part of the State tax credit under this subtitle is placed in service, the owner shall:

  (1) notify the Secretary that the project has been placed in service; and

  (2) certify that the project is a qualified workforce housing project eligible for the State tax credit.

(b) Within 15 days after notification that a project has been placed in service, the Secretary shall issue to the owner a final credit certificate for the project stating the final credit amount for the project, not to exceed the credit amount initially allocated to the project.

(c) The Secretary shall:

  (1) determine whether any event has occurred in violation of this subtitle or regulations adopted under this subtitle that makes the project ineligible for the State tax credit or otherwise triggers the recapture of any State tax credit as provided under Sec. 10-749 of the Tax - General Article; and

  (2) promptly notify the Comptroller of the occurrence of the event.

#### Section 4-2505

On or before December 31 each year, the Secretary shall report, in accordance with Sec. 2-1257 of the State Government Article, to the General Assembly:

(1) the number of qualified workforce housing projects that received a tax credit allocation during the year;

(2) the number of housing units supported by each qualified workforce housing project that received a tax credit allocation during the year;

(3) a description of each qualified workforce housing project that includes:

  (i) the geographic location of the project;

  (ii) demographic information on and income levels of the residents intended to be served by the project; and

  (iii) the rent that is authorized to be charged for a unit in the project; and

(4) housing market and demographic information that demonstrates how each qualified workforce housing project is addressing the need for workforce housing within the communities that the project is intended to serve.

### Subtitle 26. Local Housing Grant Program for Homeless Veterans and Survivors of Domestic Violence

#### Section 4-2601

In this subtitle, "Program" means the Local Housing Grant Program for Homeless Veterans and Survivors of Domestic Violence.

#### Section 4-2602

(a) There is a Local Housing Grant Program for Homeless Veterans and Survivors of Domestic Violence.

(b) The purpose of the Program is to provide grants for housing voucher funds to counties for use to house homeless veterans and survivors of domestic violence.

#### Section 4-2603

The Department shall:

(1) distribute grants to counties that may apply under the Program for rapid or permanent housing voucher funds for homeless veterans and survivors of domestic violence;

(2) establish procedures for receiving and evaluating grant applications from counties under the Program;

(3) monitor the operation of the grants; and

(4) adopt regulations to carry out this subtitle.

#### Section 4-2604

(a) For fiscal year 2020 and each fiscal year thereafter, the Governor may include funding in the annual budget for the Program.

(b) Money expended from the Program is supplemental to and is not intended to take the place of funding that otherwise would be appropriated by the Department to address homelessness.

#### Section 4-2605

The Department may establish preferences under the Program for counties that:

(1) enact an ordinance that prohibits discrimination in housing on the basis of source of income;

(2) adopt a Housing First policy, as defined by the Department; or

(3) provide an additional 25% county dedicated funding or voucher match.

### Subtitle 27. Unaccompanied Minors in Need of Shelter and Supportive Services

#### Section 4-2701

(a) In this subtitle the following words have the meanings indicated.

(b)

  (1) "Service provider" means a public or private nonprofit organization that provides shelter and supportive services to unaccompanied minors in need of shelter.

  (2) "Service provider" includes a host home program.

(c) "Supportive services" means interventions, services, or resources necessary to assist unaccompanied minors in need of shelter in acquiring or maintaining:

  (1) stable housing;

  (2) permanent connections, including ongoing attachments to families, communities, schools, and other positive social networks;

  (3) education and employment, including high performance in completion of education and training activities, especially for younger youth, and starting and maintaining adequate and stable employment, particularly for older youth; or

  (4) social and emotional well-being, including the development of key competencies, attitudes, and behaviors that equip a young person to succeed across multiple domains of daily life, including school, work, relationships, and community.

(d) "Unaccompanied minor in need of shelter" means a minor:

  (1) who is not in the physical custody of a parent or legal guardian; and

  (2)

    (i) who lacks a fixed, regular, and adequate nighttime residence as defined in the McKinney-Vento Homeless Assistance Act; or

    (ii) whose status or circumstances indicate a significant danger of experiencing homelessness in the near future.

#### Section 4-2702

(a) An unaccompanied minor in need of shelter may consent to shelter and supportive services if the service provider reasonably believes that:

  (1) the unaccompanied minor understands the significant benefits, responsibilities, risks, and limits of the shelter and services and can communicate an informed consent;

  (2) the unaccompanied minor understands the requirements and rules of the shelter and services; and

  (3) the shelter and services are necessary to ensure the unaccompanied minor's safety and well-being.

(b) An unaccompanied minor in need of shelter who is a parent may consent to shelter and supportive services for the minor's child.

#### Section 4-2703

(a)

  (1) Before providing shelter and supportive services to an unaccompanied minor in need of shelter, a service provider shall:

    (i) register with the Department;

    (ii) develop and implement a procedure to screen each staff member who works with minors, including through a State and national criminal history records check or a private agency background check conducted in accordance with Sec. 4-2708 of this subtitle; and

    (iii) obtain written consent from the unaccompanied minor in need of shelter.

  (2) The written consent from the unaccompanied minor in need of shelter shall state the minor's:

    (i) age;

    (ii) guardianship status, if known; and

    (iii) living situation.

(b) A service provider may not provide shelter to a minor if the service provider has knowledge that the minor:

  (1) knowingly provided false information in the written consent required under subsection (a) of this section; or

  (2) does not meet the definition of an unaccompanied minor in need of shelter under this subtitle.

#### Section 4-2704

(a) After providing shelter to an unaccompanied minor in need of shelter, a service provider shall:

  (1)

    (i) as soon as possible and within 72 hours, contact a parent, a guardian, or an adult relative of the minor; or

    (ii) if the service provider suspects abuse or neglect by the parent, guardian, or adult relative of the minor, immediately notify the appropriate authorities of the suspected abuse or neglect in accordance with Sec. 5-704 of the Family Law Article; and

  (2) if the service provider suspects any abuse or neglect of the unaccompanied minor in need of shelter, immediately notify the appropriate authorities of the suspected abuse or neglect in accordance with Sec. 5-704 of the Family Law Article.

(b)

  (1) If a service provider is unable to contact, and does not suspect abuse by, a parent, a guardian, or an adult relative of an unaccompanied minor in need of shelter, the service provider shall:

    (i) notify the minor of the requirements of this section; and

    (ii) after providing the notice required under item (i) of this paragraph, contact the National Center for Missing and Exploited Children to determine if the minor has been reported missing by a legal guardian.

  (2) If a service provider receives information indicating that an unaccompanied minor in need of shelter is missing from foster care, the service provider shall contact the local department of social services.

  (3) If a service provider receives information indicating that an unaccompanied minor in need of shelter has been reported missing by a legal guardian other than the local department of social services, the service provider shall contact local law enforcement.

(c) A service provider shall document efforts and communications made under subsection (b) of this section.

#### Section 4-2705

A service provider that provides shelter and supportive services to an unaccompanied minor in need of shelter in accordance with this subtitle is not civilly or criminally liable or subject to a disciplinary penalty based solely on the provider's reasonable determination to provide the shelter and supportive services.

#### Section 4-2706

The Department shall establish and maintain a registry of all service providers that register under Sec. 4-2703 of this subtitle to provide shelter and supportive services to unaccompanied minors in need of shelter.

#### Section 4-2707

(a) The Department shall adopt regulations to carry out this subtitle.

(b) The regulations shall include:

  (1) a prohibition against a service provider knowingly hiring or retaining an individual who has been convicted of a crime involving:

    (i) an offense under Sec. 3-307 or Sec. 3-308 of the Criminal Law Article or an offense under the laws of another state that would constitute a violation of Sec. 3-307 or Sec. 3-308 of the Criminal Law Article if committed in the State;

    (ii) child abuse under Sec. 3-601 of the Criminal Law Article or an offense under the laws of another state that would constitute child abuse under Sec. 3-601 of the Criminal Law Article if committed in the State;

    (iii) child sexual abuse under Sec. 3-602 of the Criminal Law Article or an offense under the laws of another state that would constitute child sexual abuse under Sec. 3-602 of the Criminal Law Article if committed in the State;

    (iv) child neglect under Sec. 3-602.1 of the Criminal Law Article or an offense under the laws of another state that would constitute neglect under Sec. 3-602.1 of the Criminal Law Article if committed in the State; or

    (v) a crime of violence as defined in Sec. 14-101 of the Criminal Law Article or an offense under the laws of another state that would be a violation of Sec. 14-101 of the Criminal Law Article if committed in the State; and

  (2) a requirement that each service provider provide training for each staff member who serves minors regarding mandatory reporting of suspected abuse or neglect in accordance with Sec. 4-2704 of this subtitle and Sec. 5-704 of the Family Law Article.

#### Section 4-2708

(a) In this section, "Central Repository" means the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services.

(b) For each staff member who works with unaccompanied minors, a service provider shall:

  (1) apply to the Central Repository for a State and national criminal history records check; or

  (2) request a private agency to conduct a background check.

(c)

  (1) As part of an application to the Central Repository for a State and national criminal history records check, the service provider shall submit to the Central Repository:

    (i) one complete set of legible fingerprints of the staff member taken in a format approved by the Director of the Central Repository and the Director of the Federal Bureau of Investigation;

    (ii) the fee authorized under Sec. 10-221(b)(7) of the Criminal Procedure Article for access to State criminal history records; and

    (iii) the mandatory processing fee required by the Federal Bureau of Investigation for a national criminal history records check.

  (2) In accordance with Title 10, Subtitle 2 of the Criminal Procedure Article, the Central Repository shall forward to the service provider and the staff member the criminal history record information of the staff member.

  (3) Information obtained from the Central Repository under this subsection:

    (i) is confidential and may not be redisseminated; and

    (ii) may be used only for the screening purposes authorized by this subtitle.

  (4) A person who is the subject of a criminal history records check under this subsection may contest the contents of the printed statement issued by the Central Repository as provided in Sec.10-223 of the Criminal Procedure Article.

(d) If a service provider requests a private agency to conduct a background check:

  (1) the private agency shall:

    (i) conduct a background check in each state where the service provider knows or has reason to believe the staff member worked or resided during the past 7 years; and

    (ii) issue a statement of the private agency's findings to:

      (1) on request, the staff member; and

      (2) the service provider; and

  (2) the staff member shall have an opportunity to contest the findings of the private agency.

### Subtitle 28. Appraisal Gap from Historic Redlining Financial Assistance Program

#### Section 4-2801

(a) In this subtitle the following words have the meanings indicated.

(b) "Affordable" means that monthly housing costs are affordable to a family of limited income as determined under Sec. 4-212 of this title.

(c) "Appraisal gap" means the amount by which the total cost of eligible construction expenses exceeds the contract sales price of a qualified property when it is initially sold to an owner-occupant.

(d)

  (1) "Eligible construction expenses" means any amount that is expended on the construction or substantial rehabilitation of a qualified property.

  (2) "Eligible construction expenses" includes any amount expended on:

    (i) acquisition costs;

    (ii) roof repair and replacement;

    (iii) chimney repair and lining;

    (iv) internal and external doors;

    (v) windows;

    (vi) masonry;

    (vii) floor joists;

    (viii) finished flooring;

    (ix) framing;

    (x) structural repairs;

    (xi) foundation repairs;

    (xii) plumbing, electrical, and mechanical systems;

    (xiii) architectural and engineering consulting fees;

    (xiv) tools and equipment rental;

    (xv) new construction;

    (xvi) infrastructure; and

    (xvii) other expenses as determined by the Secretary.

(e) "Financial assistance" includes:

  (1) a grant;

  (2) a loan;

  (3) a reduction in the principal obligation of or rate of interest payable on a loan or portion of a loan;

  (4) a prepayment of interest on a subordinate or superior loan or portion of a loan;

  (5) an assurance;

  (6) a guarantee; and

  (7) any other form of credit enhancement.

(f) "Fund" means the Appraisal Gap From Historic Redlining Financial Assistance Fund established under this subtitle.

(g) "Qualified project" means the construction or substantial rehabilitation of a qualified property if the eligible construction expenses do not exceed $500,000.

(h) "Qualified property" means residential real property that is:

  (1) newly constructed or a formerly vacant structure that has been substantially rehabilitated;

  (2) located in:

    (i)

      (1) A low-income census tract as defined by the U.S. Department of Housing and Urban Development; and

      (2) an area designated as a sustainable community; or

    (ii) an area that meets criteria established by the Department for the identification neighborhoods that:

      (1) have been historically redlined; or

      (2) have undergone urban renewal; and

  (3) constructed or rehabilitated with the purpose of being sold to an owner-occupant at an affordable sales price.

(i) "Sustainable community" means an area designated as a sustainable community under Sec. 6-205 of this article.

#### Section 4-2802

(a) There is an Appraisal Gap From Historic Redlining Financial Assistance Program in the Department.

(b) The purpose of the Program is to help close appraisal gaps that occur in historically redlined neighborhoods by making financial assistance available to:

  (1) affordable housing developers working in low-income census tracts and sustainable communities; and

  (2) individuals who purchase a qualified property:

    (i) after a qualified project is completed;

    (ii) at an affordable sales price as determined by regulations adopted by the Department; and

    (iii) as an owner-occupant.

#### Section 4-2803

(a) In the fiscal year in which a qualified project is proposed, an individual or business entity may apply to the Department for financial assistance to cover the appraisal gap for the project in accordance with this section.

(b) The Department shall develop by regulation an application form and a process for the distribution of financial assistance under this section.

(c) Financial assistance provided under this section may be allocated among the partners, members, or shareholders of a business entity in any manner agreed to by those persons in writing.

(d) Financial assistance provided under this section may be used in conjunction with other State, federal, or local funding sources.

(e) A qualified project receiving financial assistance under this section shall be in compliance with local development and land use plans.

#### Section 4-2804

(a) Subject to Sec. 4-2805 of this subtitle and the regulations of the Department, the Department shall accept an application for financial assistance from:

  (1) an individual or business entity that proposes to develop a qualified project; and

  (2) an individual that proposes to purchase a qualified property.

(b) The application shall be in the form and shall contain any information that the Department requires by regulation.

(c) The Department shall approve all applications that qualify for financial assistance under this subtitle in a timely manner.

#### Section 4-2805

(a) There is an Appraisal Gap From Historic Redlining Financial Assistance Fund.

(b)

  (1) The Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (2) The money in the Fund shall be invested and reinvested by the State Treasurer, and interest and earnings shall be credited to the General Fund of the State.

(c)

  (1)

    (i) Except as otherwise provided in this paragraph, for any fiscal year, the Department may not provide financial assistance under this subtitle in the aggregate totaling more than the amount appropriated for the Fund for that fiscal year in the State budget as approved by the General Assembly.

    (ii) If the aggregate financial assistance amounts provided in a fiscal year total less than the amount appropriated for the Fund for that fiscal year, any excess amount shall remain in the Fund and may be allocated for the next fiscal year.

    (iii) For any fiscal year, if funds are transferred from the Fund under the authority of any provision of law other than subsection (d) of this section, the maximum financial assistance amounts in the aggregate that the Department may provide shall be reduced by the amount transferred.

  (2) Notwithstanding the provisions of Sec. 7-213 of the State Finance and Procurement Article, the Governor may not reduce an appropriation for the Fund in the State budget as approved by the General Assembly.

(d) Money in the Fund may be used only for the purpose of providing financial assistance in accordance with this subtitle.

(e) On or before January 1 each year, each county shall submit a report to the Department that details the targeted areas for homeownership that would qualify for financial assistance provided under this subtitle.

(f) On or before March 1 each year, the Department shall submit a report, in accordance with Sec. 2-1257 of the State Government Article, to the Senate Budget and Taxation Committee, the House Appropriations Committee, and the House Committee on Ways and Means on the number of funds deployed to census tracts with a majority racial minority population.

#### Section 4-2806

The Department shall adopt: 

(1) regulations to specify criteria for the application for and approval of the financial assistance under this subtitle; and

(2) any other regulations necessary to carry out the provisions of this subtitle.

### Subtitle 29. Statewide Rental Assistance Voucher Program

#### Section 4-2901

(a) In this subtitle the following words have the meanings indicated.

(b) "Disability" means a physical or mental impairment that substantially limits a major life activity.

(c) "Elderly" means an individual that is at least 62 years old.

(d)

  (1) "Family" means an individual or group of individuals eligible for assistance under the State Program.

  (2) "Family" includes a preference category established under Sec. 4-2906 of this subtitle.

(e) "Housing assistance payment" means the monthly assistance payment paid for a family under the State Program.

(f) "Housing Choice Voucher Program" means the program established under 24 C.F.R. Part 982.

(g) "Live-in aide" means an individual that:

  (1) meets the requirements under 24 C.F.R. Sec. 5.403; and

  (2) resides with an elderly or disabled individual who receives assistance under the State Program.

(h) "Payment standard" means the maximum monthly housing assistance payment for a family assisted under the State Program.

(i)

  (1) "Public housing agency" means an entity authorized by the U.S. Department of Housing and Urban Development to administer the federal Housing Choice Voucher Program in the State.

  (2) "Public housing agency" does not include the Department.

(j) "State Program" means the Statewide Rental Assistance Voucher Program established under this subtitle.

(k) "Voucher" means a document issued by the Department or a public housing agency to a family that is selected to receive assistance under the State Program, which describes the State Program and procedures under the State Program.

(i) "Public housing agency" means an entity authorized by the U.S. Department of Housing and Urban Development to administer the federal Housing Choice Voucher Program in the State.

#### Section 4-2902

There is a Statewide Rental Assistance Voucher Program in the Department.

#### Section 4-2903

The purpose of the State Program is to provide vouchers and housing assistance payments for low-income families that are currently on a waiting list under the federal Housing Choice Voucher Program for housing in units approved by the Department or a public housing agency, in accordance with guidelines under the federal Housing Choice Voucher Program. 

#### Section 4-2904

(a)

  (1) In political subdivisions without a local administrator under the federal Housing Choice Voucher Program, the Department shall administer the State Program and issue vouchers and housing assistance payments to assist low-income households that are eligible for but are not currently receiving housing choice vouchers under the federal Housing Choice Voucher Program.

  (2) In political subdivisions with a public housing agency-administrator under the federal Housing Choice Voucher Program, the public housing agency:

    (i) shall administer the State Program and issue vouchers and housing assistance payments to assist low-income households that are eligible for but are not currently receiving housing choice vouchers under the federal Housing Choice Voucher Program; and

    (ii) may, subject to subsection (b) of this section, administer the State Program in accordance with the local administrative plan of the public housing agency.

  (3) The Department may project-base up to 100% of its authorized voucher units if necessary to administer the State Program, including in political subdivisions without a local administrator under the federal Housing Choice Voucher Program.

(b) Except as otherwise provided in this subtitle, the State Program shall be administered in accordance with federal guidelines under the federal Housing Choice Voucher Program.

#### Section 4-2905

To be eligible for a housing assistance payment under the State Program, a family shall:

(1) reside in the State;

(2) be on a federal housing choice voucher waiting list; and

(3) meet low-income eligibility limits under the federal Housing Choice Voucher Program or income requirements as determined by the public housing agency.

#### Section 4-2906

Each public housing agency shall prioritize vouchers and housing assistance payments for families that include:

(1) a child who is under the age of 18 years;

(2) a foster child who is:

  (i) at least 18 years old; but

  (ii) under the age of 24 years;

(3) a veteran;

(4) an individual experiencing homelessness;

(5) a disabled individual; or

(6) an elderly individual.

#### Section 4-2907

When an offer of assistance is made, a family has 30 days to provide documentation to verify their income with the Department or the public housing agency.

#### Section 4-2908

(a) The Department or a public housing agency shall calculate payment standards and housing assistance payments under the State Program in accordance with guidelines for the federal Housing Choice Voucher Program.

(b) A family assisted under the State Program shall be expected to pay not more than 30% of its monthly adjusted gross income for rent and utilities, as determined by the public housing agency at the time the family initially receives assistance under the State Program, except as otherwise provided in the federal Housing Choice Voucher Program.

#### Section 4-2909

Housing assistance payments for a family shall continue for up to 5 years or until a federal housing choice voucher under the federal Housing Choice Voucher Program becomes available, whichever occurs first. 

#### Section 4-2910

(a) A family may request that the Department or a public housing agency approve a live-in aide to provide necessary supportive services for a family member who is a person with a disability.

(b) The Department or a public housing agency shall reasonably modify its policies, procedures, and rules to allow a family that includes a person with a disability to have a live-in aide.

(c) The Department or a public housing agency may not include a live-in aide's income when determining a family's income eligibility under the State Program.

#### Section 4-2911

(a)

  (1) A public housing agency shall conduct an initial inspection and periodic inspections thereafter of each unit rented using housing assistance payments to ensure the continued compliance with federal housing quality standards under 24 C.F.R. Sec. 982.401 or 24 C.F.R. Sec. 5.703, as applicable.

  (2) Inspections shall occur on or before the initial lease date and at least biennially thereafter in accordance with the public housing agency's administrative plan.

(b) For a unit located in a building with 3 to 49 units, the property owner shall provide the public housing agency with a certificate of occupancy that has been completed within 1 year.

(c) For a unit located in a building with 50 units or more, the property owner shall provide the public housing agency with an inspection certificate.

#### Section 4-2912

The Department shall ensure that subsidy standards for unit selection comply with federal guidelines under the Housing Choice Voucher Program, including the mandate to provide for the smallest number of bedrooms needed to house a family without overcrowding.

#### Section 4-2913

(a)

  (1) The Department or a public housing agency may deny assistance under the State Program by:

    (i) denying a voucher under the State Program;

    (ii) withdrawing a State Program voucher;

    (iii) refusing to enter into a contract for housing assistance payments; or

    (iv) refusing to approve a lease under the State Program.

  (2) The Department or a public housing agency shall deny assistance under the State Program to sex offenders who are subject to a lifetime registration requirement under a State sex offender registration program.

  (3) The Department or a public housing agency may deny assistance under the State Program if the Department or a public housing agency finds that any individual residing in a unit rented using assistance from the State Program has been convicted of:

    (i) a drug-related crime under State law; or

    (ii) a violent crime.

  (4) If the Department or public housing agency denies assistance under the State Program, the Department or the public housing agency shall promptly provide the applicant with a notice explaining the denial and indicating that the applicant may request an informal review.

(b)

  (1) The Department or a public housing agency may terminate assistance under the State Program by:

    (i) refusing to enter into a State Program contract;

    (ii) refusing to approve a lease under the State Program; or

    (iii) terminating housing assistance payments under a State Program contract.

  (2) The Department or a public agency shall terminate assistance under the State Program for:

    (i) families who were evicted under the State program for serious violations of the lease;

    (ii) families who fail to sign any forms from the Department or a public housing agency indicating consent to obtain information; and

    (iii) sex offenders subject to a lifetime registration requirement under a State sex offender registration program.

(c) When determining the denial or termination of assistance under the State Program, the Department may consider all relevant circumstances, including the seriousness of the case, the extent of participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial or termination of assistance on other family members who were not involved in the action or failure if a family member:

  (1) violates any obligations under the State Program;

  (2) has been evicted from federally assisted housing for violent criminal activity that threatened the health, safety, or welfare of other residents within the preceding 3 years;

  (3) has committed fraud, bribery, or any other corrupt or criminal act in connection with the State Program;

  (4) owes a financial obligation to the Department or public housing agency in connection with another housing or rental assistance program;

  (5) breaches a repayment agreement to pay amounts owed to the Department or public housing agency;

  (6) has engaged in or threatened abusive or violent behavior toward Department or public housing agency employees, the property owner or property management staff, or other residents; or

  (7) receives assistance under the State Program and is absent from the unit for more than 180 consecutive days.

(d)

  (1) The Department or a public housing agency may prohibit other family members who participated in or were culpable for actions specified under this section from residing in a unit rented using assistance from the State Program.

  (2) In making the determination under paragraph (1) of this subsection, the Department or a public housing agency may consider:

    (i) the seriousness of the case;

    (ii) the extent of participation by or culpability of individual family members;

    (iii) mitigating circumstances related to the disability of a family member; and

    (iv) the effects of the prohibition on other family members who were not involved in the action or failure.

#### Section 4-2914

(a) A family that receives a voucher under the State Program shall:

  (1) supply any information to the Department or the public housing agency necessary for the administration of the State Program;

  (2) notify the Department or the public housing agency before vacating the unit;

  (3) use the unit only as a principal place of residence; and

  (4) maintain all utilities that are not paid through the housing assistance payment.

(b) A family that receives a voucher under the State Program may not:

  (1) own the unit that the assistance is provided for;

  (2) commit fraud in connection with the State Program;

  (3) sublease or assign the lease or transfer the unit; or

  (4) allow anyone not on the unit lease to reside in the unit.

#### Section 4-2915

The Department or a public housing agency shall give each family that receives assistance under the State Program a written description of:

(1) the family's obligations under the State Program;

(2) the grounds on which the Department or the public housing agency may deny or terminate assistance under the State Program; and

(3) the process to request an informal hearing.

#### Section 4-2916

The Department or a public housing agency shall recertify a family for continued admission under the State Program, in accordance with federal guidelines under the federal Housing Choice Voucher Program.

#### Section 4-2917

If the head of household who was receiving assistance under the State Program dies, a surviving family member may continue to receive the assistance if the household is solely occupied by remaining family members in accordance with this subtitle.

#### Section 4-2918

Any guidelines on the termination of assistance or on evictions established by the Department or a public housing agency under this subtitle shall be at least as protective of tenants' rights as guidelines established under the federal Housing Choice Voucher Program. 

#### Section 4-2919

(a)

  (1) For fiscal years 2025, 2026, and 2027, the Governor shall include in the annual budget bill an appropriation of $10,000,000 to the Department for the State Program.

  (2) For fiscal year 2028 and each fiscal year thereafter, the Governor shall include in the annual budget bill an appropriation sufficient to fund at least the same number of vouchers issued in the prior fiscal year.

(b) The Department shall distribute the greater of the federal de minimis rate of the public housing agency's modified total direct costs as established in 2 C.F.R. Sec. 200.414(f) or 15% of the amount specified under subsection (a) of this section each year to each public housing agency to help defray staffing expenses related to the administration of the federal Housing Choice Voucher Program and the State Program.

(c) The Department shall develop a formula for distributing State Program funds to each public housing agency.

#### Section 4-2920

On or before December 30, 2024, and each year thereafter, the Department and each political subdivision that has a public housing agency shall report to the Governor and, in accordance with Sec. 2-1257 of the State Government Article, the General Assembly on:

(1) the number of families receiving assistance under the State Program;

(2) compliance with income eligibility requirements under the federal Housing Choice Voucher Program;

(3) the total amount of funds received;

(4) the number of households terminated from the State Program;

(5) the incomes of families receiving assistance under the State Program;

(6) the geographic locations where families receiving assistance under the State Program have been housed;

(7) the race and gender of individuals in families receiving assistance under the State Program;

(8) the household size for families receiving assistance under the State Program;

(9) the number of families receiving assistance under the State Program, based on the preferences listed in Sec. 4-2906 of this subtitle;

(10) the length of time that each family has received assistance under the State Program;

(11) the average length of time from application into the State Program and receipt of housing assistance payments;

(12) any referrals made for families under the State Program for wraparound services, including job training;

(13) any resources used to advertise the State Program;

(14) the disability status of households served; and

(15) the number of households in which State Program assistance ended without the households having received federal housing choice vouchers.

#### Section 4-2921

The Department may adopt regulations to implement this subtitle. 

### Subtitle 30. Housing Innovation Pilot Program

#### Section 4-3001

(a) In this subtitle the following words have the meanings indicated.

(b) "Authority" has the meaning stated in Sec. 12-101 of this article.

(c) "Fund" means the Housing Innovation Fund.

(d) "Housing innovation project" means a project to provide mixed-income, cross-subsidized housing, including educator workforce housing, that qualifies under Sec. 4-3003 of this subtitle.

(e) "Program" means the Housing Innovation Pilot Program.

(f) "Public ownership" means that the authority of the political subdivision of the state in which or the county board of education in whose jurisdiction the project is located possesses majority ownership or control.

#### Section 4-3002

(a) There is a Housing Innovation Pilot Program.

(b) The purposes of the Program are:

  (1) to create opportunities for the State's public housing authorities, county governments, municipal corporations, and county boards of education to increase the volume of housing production; and

  (2) to reward counties, municipal corporations, and county boards of education pursuing innovative solutions to the problem of housing scarcity.

(c) The Program shall be operated with money in the Fund.

#### Section 4-3003

(a) A project qualifies as a housing innovation project if it provides new housing in which:

  (1) at least 20% of the units are set aside for households with a gross annual income of not more than 50% of the area median income for a household of like size; or

  (2) at least 40% of the units are set aside for households with a gross annual income of not more than 60% of the area median income for a household of like size.

(b) The Department shall prioritize funding for projects that best meet the following guidelines:

  (1) the project does not use low-income housing tax credit equity or tax-exempt volume cap;

  (2) the affordable set-asides required under subsection (a) of this section remain restricted at elected levels for at least 99 years;

  (3) the project remains in public ownership;

  (4) the project includes a commitment to prevailing wage requirements; and

  (5) any portion of the units are set aside for educator workforce housing.

#### Section 4-3004

(a) The Department shall:

  (1) coordinate with local housing authorities, county governments, municipal corporations, and county boards of education to ensure access to other financial resources, including senior debt products;

  (2) develop new resources in support of statewide housing production;

  (3) solicit applicants for the Program; and

  (4) subject to subsection (b) of this section, select three projects to receive assistance from the Program each in a different jurisdiction.

(b) The Department may select fewer than three projects to fund if there is an insufficient number of eligible applicants.

#### Section 4-3005

(a)

  (1) In administering the Program, the Department shall take into consideration the need for increased development capacity within local housing authorities.

  (2) The Department may not condition the award of funding from the Program on the issuance of bonds by the Department.

(b)

  (1) For each of fiscal years 2026 through 2029, the Governor may include in the annual operating or capital budget bill an appropriation of $5,000,000 to the Fund.

  (2) An appropriation under paragraph (1) of this subsection may be allocated using funding for rental housing projects administered in accordance with Subtitle 4 of this title.

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Md. Code Ann., Hous. & Cmty. Dev. (as displayed at mgaleg.maryland.gov, October 16, 2026)