In this subtitle the following words have the meanings indicated. “Covered county” means: a county that has adopted home rule powers under Article XI-F of the Maryland Constitution; or Anne Arundel County, Calvert County, Frederick County, Howard County, or Washington County. “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. “Program” means a residential mortgage program under this subtitle.

The General Assembly finds that: 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; the inability of families of low or moderate income under item (1) of this subsection is the result of continuing increases in: the cost of construction or rehabilitation; county taxes; heating and electricity expenses; maintenance and repair expenses; inflation; the cost of land; the cost of energy conservation; and borrowing costs, including interest; 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; 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; private enterprise cannot construct or rehabilitate adequate housing for families of low or moderate income without the assistance of a program; and 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. The General Assembly finds that: it will be hard for many residents in covered counties to find decent, safe, and sanitary housing unless housing is constructed or rehabilitated; 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 increasing the housing supply in covered counties and the ability of families of low or moderate income to get mortgage financing will: help in the clearance, replanning, development of, and redevelopment of blighted areas; reduce the critical shortage of adequate housing; and greatly enhance the maintenance and use of existing housing and neighborhoods. The General Assembly finds that: a major cause of the housing crisis is a lack of: 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 money with which private mortgage lenders can finance housing; and the lack of money has frustrated the maintenance, sale, and purchase of existing housing in covered counties. The General Assembly finds that covered counties have a basic public interest in: 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 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: a well-balanced society; existing housing; established neighborhoods; and a sound tax base. 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.

The purposes of this subtitle are to: help remedy the conditions described in § 4-1602 of this subtitle; make residential mortgage loans available to families of low or moderate income at borrowing costs lower than those otherwise prevailing for residential mortgages; help reduce the shortage of adequate housing; and help maintain housing and neighborhoods.

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. 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: forward commitment mortgage purchase; existing mortgage purchase; loans to lenders; revolving mortgage fund; or any other means that the legislative body of the covered county considers appropriate.

A covered county may collect from borrowers in a program the charges that the legislative body of the covered county considers proper for: loan processing; loan administration; mortgage insurance; and other costs and expenses of the program.

The legislative body of a covered county that undertakes a program shall adopt an ordinance or resolution that specifies: the proposed program; the amount of bonds to be issued; the interest rate or rates that the bonds will bear or the method to determine the rate or rates; and other provisions consistent with this subtitle that the legislative body considers appropriate to finance mortgage loans. An ordinance or resolution that authorizes the issuance of bonds shall include findings about: the appropriate ranges of income of families of low or moderate income; the need for the financing that is allowed under this subtitle; the types of housing available and needed in the covered county; and other factors that the legislative body of the covered county finds appropriate to establish a program. 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.

The legislative body of a covered county that issues bonds under this subtitle shall determine: the time or times when interest is to be paid on the bonds; the time or times when the bonds are to be executed, issued, and delivered; the form, denomination, and tenor of the bonds; 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 the place or places where the bonds are to be paid. The bonds may be secured by: 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; servicing agreements; condemnation proceeds; private, governmental, or other mortgage insurance proceeds; casualty or special hazard insurance proceeds; or any other security that the legislative body of the covered county finds appropriate. 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. The following are exempt at all times from taxation of every kind and nature whatsoever by the State or a county: the principal of a bond; the transfer of, interest payable on, or income derived from a bond; and profit made by the sale or transfer of a bond. A bond issued under this subtitle is a negotiable instrument. A covered county may: issue its bonds in coupon form; or provide for registration of the bonds as to principal alone or principal and interest. The bonds shall be signed by a commissioner or other chief executive officer of the covered county. 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. 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.

The bonds shall be sold at public or private sale on the terms that the legislative body of the covered county sets. The bonds are not subject to §§ 19–205 and 19–206 of the Local Government Article. The bonds and the interest on them shall be limited obligations of the covered county. The principal and interest on the bonds shall be payable only from: the revenue derived from: interest; mortgage insurance; casualty or special hazard insurance or other insurance proceeds; or condemnation proceeds; other revenue derived from mortgage loans or property securing the loans; or other payments or revenues derived from or relating to the making of the loans. The bonds or coupons issued under this subtitle: 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 are not and do not give rise to a monetary liability of the issuing county. 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. Money received from bonds issued under this subtitle shall be applied solely: to make money available through mortgage lending institutions only for residential mortgage loans to families of low or moderate income; to establish reserves; to pay the necessary expenses of financing; or to advance the payment of interest on the bonds during the first 3 years after the date of the bonds.

A covered county may issue new bonds to pay outstanding bonds in accordance with procedures of this subtitle and § 19–207 of the Local Government Article. New bonds shall be secured to the same extent and shall have the same source of payment as the bonds refunded.

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. A transaction under this subtitle is not a capital project within the meaning of a charter or statutory provision. 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.