In this subtitle the following words have the meanings indicated.
“Fund” means the Rental Housing Fund established under § 4–504 of this title.
“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 § 4–404 of this subtitle.
“Office or other commercial space conversion” means the conversion to rental housing of a building that:
is in a sustainable community as defined in § 6–301 of this article;
was built more than 30 years before an application is submitted to the Department to finance the conversion;
consists of at least two floors at or above ground level; and
was last used as office or other commercial space.
“Program” means the Rental Housing Program.
“Rental housing project” means a project eligible for financial assistance under § 4–407 of this subtitle.
There is a Rental Housing Program.
The purposes of the Program are to:
stimulate the production and preservation of rental housing;
increase and improve the supply of decent, safe, and sanitary rental housing at costs that are affordable to households of limited income;
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;
support economic growth and activity by financing, in whole or in part, the construction or substantial rehabilitation of rental housing projects; and
revitalize sustainable communities, as defined in § 6–301 of this article, through office or other commercial space conversion.
The Department shall:
administer the Program;
adopt policies to ensure that rental housing is made available to households of limited income;
develop procedures to ensure that the projects receiving financial assistance from the Program are in compliance with applicable occupancy restrictions;
use federal and State programs to help carry out the Program; and
encourage the assistance or participation of local political subdivisions.
The Secretary shall set income guidelines by considering:
the median income for the area;
the minimum income needed to afford available standard rental units in the area;
federal income guidelines, including the requirements of the Federal Low–Income Housing Tax Credit Program; and
any other relevant factor.
In administering the Program under this subtitle, the Department may act either directly or through the Administration.
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.
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.
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.
The Department shall adopt regulations to carry out the Program.
The regulations shall provide for:
applications for money from the Fund;
standards of eligibility, terms, and fees;
charges that shall be imposed on Program loans; and
the recapture of money of the Fund from a borrower that does not use the money in a timely manner.
A project qualifies as a rental housing project under this subtitle if:
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
a portion of the rental units in the project are set aside for households of lower income for the greater of:
15 years; or
the number of years required by federal law.
The minimum number of rental units set aside under subsection (a)(2) of this section shall be the greater of:
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
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.
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.
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.
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:
effect an office or other commercial space conversion into market rate rental housing; and
provide substantial economic development to a sustainable community as defined in § 6–301 of this article.
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.
In reviewing an application for a Program loan under this subtitle, the Department shall consider:
the extent to which households of limited income will be assisted by the proposed project;
the number and percentage of households of limited income currently living in the community where the project is proposed;
the quantity, condition, and affordability of residential property in the community where the project is proposed;
the economic feasibility of the proposed project;
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
any other relevant factors.
Money in the Fund may be used to make loans to an approved applicant to:
acquire, construct, or rehabilitate a rental housing project;
convert an existing building or buildings to a rental housing project; or
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.
A Program loan may:
be secured by a mortgage lien;
be subordinate to other financing;
have an interest rate as low as zero percent;
be payable out of surplus cash;
be a deferred payment loan;
provide for an equity participation by the Department or contingent interest payable out of surplus cash or net equity; or
have any other terms the Department may require.
To facilitate repayment of the Program loan and achieve the purposes of the Program, the Department may modify:
the interest rate;
the time or amount of payment; or
any other term of the Program loan.
If a Program loan is secured by a mortgage, the Department may:
enforce the mortgage;
foreclose on the mortgage and take title to the mortgaged property or take deed in lieu of foreclosure;
convey title to a purchaser;
obtain and enforce a deficiency judgment;
allow assumption of the mortgage; and
contract with a private mortgage servicer to perform on behalf of the Department any functions a servicer ordinarily performs.
Without approval or execution by the Board of Public Works, the Department may:
assign a mortgage for value; or
convey property after acquisition.
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 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.
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.