# Housing and Community Development (GHS)

## Title 4. Division of Development Finance

### 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.

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Md. Code Ann., Hous. & Cmty. Dev. (as displayed at mgaleg.maryland.gov, October 16, 2026)