Title 4. Division of Development Finance — Subtitle 9. Maryland Housing Rehabilitation Program

“Family of limited income” means a family or individual whose income does not exceed the limits that the Secretary establishes under § 4–915 of this subtitle.

“Family of limited income” includes a trust described in 42 U.S.C. § 1396p(d)(4), or a trust established for the benefit of an individual with a disability by an individual other than the beneficiary and that is funded with assets that were never owned or controlled by the beneficiary, if:

a nonprofit organization;

a political subdivision; or

a limited partnership formed to undertake a rehabilitation project that is eligible wholly or partly for federal programs or incentives, if:

“Rehabilitation project” means a project to repair, reconstruct, renovate, redevelop, improve, modify, or add to a building for a purpose listed in § 4–923 of this subtitle.

“Rehabilitation project” includes providing utility submetering for dwellings in a residential rental building.

the Accessory, Shared, and Sheltered Housing Program;

the Indoor Plumbing Program;

the Lead Paint Abatement Program;

the Migratory Worker Housing Program;

the Radon and Asbestos Abatement Pilot Program; and

the Accessible Homes for Senior Homeowners Grant Program.

traditional dwellings;

single room occupancy;

shared living dwellings in which two or more households can live and share some or all of the living, dining, kitchen, or sanitary facilities; or

congregate or group housing and related services or temporary shelters and related services that serve:

many residents of the State live in dwellings that do not conform to building, health, safety, fire, occupancy, or other codes and standards applicable to housing;

many communities or political subdivisions in the State do not have a minimum livability code; and

these conditions impede the development and maintenance of healthy, safe, and viable communities;

owner–occupants of housing in need of rehabilitation often have low incomes; and

nonoccupant owners often incur high risks in owning and managing the housing;

increases the economic life of the housing;

is often more economical and less disruptive than replacing the housing and relocating its occupants;

can better promote community development when it is done through organized housing rehabilitation programs;

is essential for sound community development; and

can be helped by rehabilitating commercial buildings serving communities where housing rehabilitation is desirable;

rehabilitate housing;

develop healthful, safe, and viable communities;

rehabilitate commercial buildings to help rehabilitate and develop housing; and

provide healthful and safe housing for migratory workers to maintain and expand the agricultural activities that are dependent on the labor of these workers; and

improve, modify, and add to housing to increase the supply of special housing for special populations, such as elderly households, individuals with disabilities, and other disadvantaged residents of the State;

prevent lead poisoning by modifying older housing to provide a lead–safe environment, as lead paint in older housing is a major source of lead poisoning in children;

provide adequate indoor plumbing, water supply, and sewage disposal systems for dwellings; and

reduce or eliminate radon and asbestos, which are major detriments to the health and safety of residents, on a pilot program basis.

The Department shall operate the Program and make Program loans.

As much as possible, the Program shall be administered:

Except for Program loans made under a special loan program, the Regular Rehabilitation Program consists of Program loans to rehabilitate residential buildings providing four or fewer dwellings.

The Special Rehabilitation Program consists of Program loans made under a special loan program.

reasonable application and processing fees; and

other charges, fees, or reimbursements incidental to Program loans; and

enforce the mortgages;

foreclose on the mortgages and take title to the mortgaged properties, or take deeds in lieu of foreclosure;

convey title to purchasers;

obtain and enforce deficiency judgments;

allow assumption of mortgages; and

contract with private mortgage servicers to perform on behalf of the Department any functions the servicers ordinarily perform.

assign mortgages for value;

release mortgages when paid;

foreclose on mortgages;

take deeds in lieu of foreclosure; or

convey property after acquisition.

foreclose on the security interest or otherwise enforce the security interest as permitted under Title 9 of the Commercial Law Article;

take possession of the premises in lieu of foreclosure;

obtain and enforce deficiency judgments;

transfer the cooperative interest;

allow assumption of the security agreement; and

contract with private loan servicers to perform on behalf of the Department any functions the private loan servicers ordinarily perform.

assign a security interest for value;

release a security interest when paid;

foreclose on a security interest;

take possession of the premises in lieu of foreclosure; or

transfer a cooperative interest after acquisition.

the number of families of limited income in the county;

the need to rehabilitate buildings in the county;

the capability of the county to administer a local rehabilitation program; and

other standards that the Department considers relevant to ensure fair and equitable distribution of money among counties.

allocate on a countywide basis first and then make suballocations among participating municipal corporations and nonprofit sponsors within counties;

allocate up to 25% of the total money available in the Special Loan Programs Fund to a reserve; and

from time to time, reallocate the money held in the reserve.

By regulation, the Department shall establish standards for determining the capability of a political subdivision or nonprofit sponsor to administer a local rehabilitation program.

The standards shall include provisions on:

help train employees of political subdivisions and nonprofit sponsors to administer local rehabilitation programs under the standards that the Department sets; and

provide political subdivisions and nonprofit sponsors advice and technical assistance on the administration of their local rehabilitation programs, including loan packaging, contractor and bid selection, zoning, marketing, engineering, and related services.

The Secretary shall set upper limits on the income that a family or individual may have to qualify as a family of limited income.

In setting the limits, the Secretary shall consider factors that include:

The Department may make Program loans for housing on terms that the Department considers necessary to make the housing affordable to families of limited income.

The Department may make Program loans in the form of a grant to a family of limited income if:

The terms may include:

lower income ranges;

interest rates to be available on Program loans serving occupants with incomes within those lower ranges; and

any preference or reservation of money for applications for Program loans to finance housing to serve occupants in those lower income ranges.

may not be made if the Department determines that comparable private financing is available to the prospective borrower; and

may not exceed an amount the Secretary establishes by regulation.

Except as provided under paragraphs (2), (3), (4), and (5) of this subsection, a Program loan of more than $5,000 shall be secured wholly or partly by a recorded mortgage or deed of trust on real property.

A Program loan to a political subdivision may be secured by a recorded mortgage, deed of trust on real property, or other security device acceptable to the Department.

A Program loan to a trust described in 42 U.S.C. § 1396p(d)(4) may be secured by a recorded mortgage, deed of trust on real property, or other security device acceptable to the Department.

A Program loan in the form of a grant may be unsecured or secured by a mortgage, deed of trust, or other security device acceptable to the Department.

families of limited income owning and occupying the building to be rehabilitated; or

sponsors or nonprofit sponsors.

costs of a rehabilitation project, including implementation costs such as appraisal, architectural, and engineering fees; and

closing costs of the Program loan.

When the Department makes a Program loan to finance a residential rehabilitation project, the sponsor or nonprofit sponsor shall restrict some dwellings for occupancy by families of limited income for at least the greater of 15 years and the number of years required by federal law.

The number of dwellings restricted under paragraph (1) of this subsection shall be at least the greater of:

the rehabilitation project; or

affordable housing for families of limited income, if the rehabilitation project is residential.

the administrative and other expenses of the Program; and

reasonably expected losses from defaults on Program loans.

grants for rehabilitation projects to families of limited income or nonprofit sponsors; and

loans for rehabilitation projects to sponsors, nonprofit sponsors, or families of limited income.

The Department:

The terms and conditions of loans and grants made under this section shall be in accordance with the legislation or other authority by which the money is made available to the Department.

to bring a building to a decent, safe, and sanitary condition in accordance with applicable codes and standards, including those for construction, health, safety, fire, and occupancy;

to maintain the building in that condition;

to make the building more useful and attractive;

to conform the building to the appropriate minimum livability code;

to provide, under applicable special loan programs:

in the case of a loan or grant to an elderly household or a disabled homeowner, to modify or improve a dwelling to make it more accessible or functional for the occupants, if the building is, or after improvements will be, structurally sound and free of health and safety hazards; or

to provide, under applicable special loan pilot programs, radon abatement or asbestos abatement.

The applicable codes and standards under subsection (a)(1) of this section are:

With the approval of the local enforcement authority, the Secretary may allow exceptions to a code or standard to preserve the historic or architectural value of a building undergoing rehabilitation under this subtitle.

In this section the following words have the meanings indicated.

“Accessory housing” means a dwelling with complete and independent sleeping, cooking, and living facilities that is:

“Shared housing” means a single-family, owner-occupied dwelling adapted for common and shared living use by the owner-occupant and another family of limited income.

“Sheltered housing” means a single-family, owner-occupied dwelling that:

own the property for which the loan is made and agree to live in the property after the rehabilitation is completed; and

be a family of limited income;

own the property for which the loan is made and agree to live in the property after the rehabilitation is completed; and

agree to use the loan proceeds to implement a rehabilitation project to provide shared housing or an accessory dwelling for a family of limited income.

own the property for which the loan is made and agree to live in the property after the rehabilitation is completed;

agree to provide shelter, meals, and assistance with daily activities to not more than 15 elderly individuals or individuals with disabilities who qualify as families of limited income; and

demonstrate that the property will be certified by the appropriate governmental unit to provide sheltered care to elderly individuals or individuals with disabilities.

operate the Indoor Plumbing Program; and

make loans for rehabilitation projects that provide for adequate indoor plumbing from the Special Loan Programs Fund under this subtitle.

The terms for indoor plumbing loans shall meet the requirements of §§ 4-917 through 4-919 of this subtitle.

The Department may forgive all or part of a deferred payment loan, if:

own a building that is otherwise structurally sound, or for which the applicant provides a commitment from a lender to finance improvements needed to make the building structurally sound, and that:

live in the building and be a family of limited income, or rent at least two-thirds of the dwellings in the building to families of limited income; and

submit to the Department a proposal for installing an adequate indoor plumbing system for water supply and sewage disposal, including any needed septic system, well, or connection to a community sewer or water system that meets the requirements of the Department of the Environment and every other governmental unit that has jurisdiction over the system.

In this section the following words have the meanings indicated.

“Migratory Housing Program” means the Migratory Worker Housing Program.

“Migratory worker” means an individual from within or outside the State who:

operate the Migratory Housing Program;

make migratory worker housing loans from the Special Loan Programs Fund under this subtitle to a qualified owner of a migratory labor camp to make migratory worker housing safer and more healthful; and

to the extent determined by the Secretary, administer the Migratory Housing Program in conjunction with any appropriate federal program.

live or have a principal place of business in the State;

have been denied a loan by a private lending institution or have received a commitment from a private lending institution for less than the amount of money required to finance the necessary health and safety improvements; and

submit to the Department a plan for the necessary health and safety improvements that has been approved by the Department of the Environment.

operate the Radon and Asbestos Abatement Pilot Program; and

make loans for rehabilitation projects for radon and asbestos abatement.

To qualify for a loan, an applicant shall:

In addition to the requirements in paragraph (1) of this subsection, the applicant shall:

accessible housing for seniors loans; and

special loan programs under this subtitle.