In this subtitle the following words have the meanings indicated. “Fund” means the Energy–Efficient Homes Construction Fund. “Low–energy home” means a home that achieves a Home Energy Rating System (HERS) Index rating: of 50 or lower; or as determined by the Department in regulations. “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. “Program” means the Energy–Efficient Homes Construction Loan Program.

There is an Energy–Efficient Homes Construction Loan Program. The purpose of the Program is to provide construction loans to persons to construct low–energy homes and net–zero homes. The Program shall be operated with money in the Fund.

The Department shall: administer the Program; attach to a Program loan the terms needed to carry out the Program; establish eligibility standards for Program loans; establish interest rates that may be as low as 0% or as high as is reasonable to make the project viable; and adopt regulations to carry out the Program, including regulations designed to increase participation of minority business enterprises in the Program. In setting the terms and interest rates for Program loans, the Department may: offer preferred interest rates and terms for loans used to finance net–zero homes; and establish different interest rates based on the projected energy efficiency of the home to be constructed. The Department may: contract for services related to the Program; contract with private mortgage servicers to perform on behalf of the Department functions the servicers ordinarily perform, including foreclosure and employment of counsel; charge a nonrefundable application fee and other customary loan fees; 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; 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; 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 without approval or execution by the Board of Public Works: assign a mortgage for value; release a mortgage; foreclose a mortgage; acquire property that secures a loan in default; and encumber, sell, or otherwise dispose of property acquired in connection with a loan in default. On or before January 1 each year, the Department shall submit a report to the General Assembly, in accordance with § 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.

Proceeds of a Program loan shall be used only for: property acquisition and development costs for the construction of a net–zero home or low–energy home; and settlement and closing costs. A Program loan shall be secured by a mortgage lien that: may be subordinate to other mortgage liens; and may include terms, including deferred payment of principal and interest, that the Department considers necessary to make the project viable. To apply for a loan under this subtitle, an applicant shall submit: a completed application in a form that the Department requires; information on projected energy usage, project design, and marketing data; and any other information or documentation that the Department considers necessary to make a determination on the loan. The Department may give a preference to an application for: a net–zero home; or a project that includes financing from other sources in addition to the Program loan. 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 § 5–1501 of the Economic Development Article and through the Clean Energy Workforce Account under § 11–708.1 of the Labor and Employment Article.

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. 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. 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.

There is an Energy–Efficient Homes Construction Fund. The Department shall administer the Fund. The Fund is a special, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article. The State Treasurer shall hold the Fund separately, and the Comptroller shall account for the Fund. The Fund consists of: money appropriated in the State budget to the Fund; repayments or prepayments of principal and payments of interest on loans made under the Energy–Efficient Homes Construction Loan Program; investment earnings of the Fund; and any other money from any other source accepted for the benefit of the Fund. The Department may use the Fund only to: pay expenses of the Program; provide credit enhancement under the Program; and make or purchase loans under the Program. The State Treasurer shall invest the money of the Fund in the same manner as other State money may be invested. Any investment earnings of the Fund shall be paid into the Fund.