In this subtitle the following words have the meanings indicated. “Group home” means a housing facility that offers: supportive services or supervisory personnel to individuals with special housing needs who are not related to the group home sponsor; and common, shared, or independent living, dining, kitchen, sanitary, and sleeping facilities. “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. “Group home sponsor” means a person who qualifies for a Program loan under § 4-607 of this subtitle. “Person of lower income” means an individual or family whose income does not exceed the upper income limit that the Secretary sets. “Program” means the Group Home Financing Program. “Program loan” means a loan that the Department makes under this subtitle.

There is a Group Home Financing Program.

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.

The Department may establish: eligibility standards for group home sponsors; Program loan fees and charges; maximum Program loans for group homes based on their size, use, and location; and a process for selecting group homes to be financed under the Program that promotes statewide distribution of money.

The Department shall: administer the Program; adopt policies that encourage the establishment of group homes for persons of lower income throughout the State; 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; 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 establish guidelines to determine the ability of a group home sponsor to manage a group home, provide necessary services, and repay the Program loan.

The Department shall adopt regulations to carry out the Program.

To qualify for a Program loan, a group home sponsor shall own and operate a group home and be: a nonprofit organization; an individual; or a limited partnership if: each general partner qualifies as a nonprofit organization; or each general partner is a wholly owned subsidiary of a nonprofit organization; 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 a nonprofit organization manages the project or receives the net cash flow from or the residual sale proceeds on sale of the group home.

The Program shall be operated with money in the Special Loan Programs Fund under § 4-505 of this title.

In reviewing an application for a Program loan, the Department shall consider: the economic feasibility of the group home; and the ability of the group home sponsor to manage the group home, provide necessary services, and repay the Program loan.

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. In exceptional circumstances, the terms may include: deferred payment of principal and interest; and interest rates as low as 0%. Each loan shall require that all unpaid principal and accrued interest, including principal or interest that was deferred, be paid at the earliest of: a stated date, which may be the maturity date of the Program loan; the date of the sale or other transfer of the group home or a controlling interest in the group home; and the date when the project ceases to be used as a group home. Each Program loan shall provide for: a limit on the return on equity allowed to a group home sponsor; equity participation between the Department and the group home sponsor; or 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. 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. The Department may allow the group home sponsor to earn a reasonable return before the group home sponsor pays accrued and deferred interest. 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. A Program loan may finance: the site acquisition, construction costs, and permanent mortgage for a group home; the purchase of an existing building to provide a group home; a modification to a building purchased with a Program loan, if the modification improves, repairs, renovates, or rehabilitates the building to: make it suitable as a group home; or eliminate housing, building, fire, safety, health, or other code violations; the refinancing of an existing mortgage loan on a group home; closing costs associated with the construction, purchase, or refinance of a group home; engineering, legal, title, survey, or architectural fees associated with financing real property development; and other development costs that the Department considers reasonable.

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: are in a minor part of the building; conform with local zoning requirements; and although not directly related to the housing facility, offer goods or services for persons of lower income or other disadvantaged individuals.

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 the Department’s action 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 2 years or a fine not exceeding $50,000 or both.