In this subtitle the following words have the meanings indicated. “Cooperative housing corporation” has the meaning stated in § 5–6B–01 of the Corporations and Associations Article. “Cooperative interest” has the meaning stated in § 5–6B–01 of the Corporations and Associations Article. “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: the income of the trust does not exceed the upper income limits established by the Secretary under § 4–915 of this subtitle; and the beneficiary of the trust is an individual who resides in the residential building owned by the trust. “Local rehabilitation program” means a rehabilitation program that uses Program loans and is administered by a political subdivision or a nonprofit sponsor. “Member” has the meaning stated in § 5–6B–01 of the Corporations and Associations Article. “Minimum livability code” means a regulation, statute, or ordinance that establishes minimum property maintenance standards that the State or a political subdivision adopts under § 12–203 of the Public Safety Article. “Nonprofit sponsor” means: 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: each general partner is a nonprofit organization or a political subdivision; or each general partner is a wholly owned subsidiary of a nonprofit organization or political subdivision; and a nonprofit organization or political subdivision manages the rehabilitation project or will receive net cash flow or the residual sale proceeds on the sale of the rehabilitation project. “Program” means the Maryland Housing Rehabilitation Program. “Program loan” means a loan or grant under the Maryland Housing Rehabilitation Program or a special loan program. “Regular Rehabilitation Program” means the Program when used to fund a loan for a single family project. “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. “Special loan program” means: 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. “Special Rehabilitation Program” means the Program when used to fund a loan under a special loan program. “Sponsor” means an owner who receives a loan to rehabilitate a building for residential rental purposes or nonresidential purposes.

This subtitle applies to buildings that, after rehabilitation, provide: 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: individuals with disabilities or low-income, elderly households, homeless, or other disadvantaged individuals; or the nonresidential commercial, business, or social needs of the community where the building is located, so as to enhance the economic feasibility of housing rehabilitation in that community. This subtitle does not apply to a building that provides group housing unless the group housing is provided by an owner-occupant or a nonprofit sponsor.

The General Assembly finds that: 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; private sector financing is often unavailable for rehabilitation because: 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; rehabilitating suitable 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; it is a proper public purpose for which public money may be spent and property acquired to: 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 it is a proper public purpose for which public money may be spent to: 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.

There is a Maryland Housing Rehabilitation Program.

The Maryland Housing Rehabilitation Program includes: the Accessory, Shared, and Sheltered Housing Program; the Indoor Plumbing Program; the Migratory Worker Housing Program; the Radon and Asbestos Abatement Pilot Program; and the Accessible Homes for Senior Homeowners Grant Program.

The Department shall operate the Program and make Program loans. As much as possible, the Program shall be administered: in conjunction with federal programs assisting rehabilitation of housing, to ensure maximum use of available federal money; and consistently with locally approved plans or programs of concentrated neighborhood revitalization. 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.

The Regular Rehabilitation Program and the Special Rehabilitation Program shall operate with money in the Special Loan Programs Fund and other money available to the Department for these programs. If the applications that qualify for a Program loan under the Regular Rehabilitation Program or a special loan program do not commit all money appropriated to that loan program within 6 months after the appropriation, the Department may reallocate the remaining appropriated money to any other program financed by the Special Loan Programs Fund.

The Department may: limit the return on equity allowed to, or enter into equity participation agreements with, sponsors and nonprofit sponsors; require and obtain appraisals, credit and title information, and other information related to making Program loans; contract for services relating to any aspect of the operation of the Program under the procedures required by law for State contracts; charge and collect: reasonable application and processing fees; and other charges, fees, or reimbursements incidental to Program loans; and if necessary, limit the cumulative outstanding debt for Program loans made to a trust described in 42 U.S.C. § 1396p(d)(4) to preserve the ongoing financial viability of the Program.

If Program loans are secured by first or junior mortgages, the Department may: 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. Without approval or execution by the Board of Public Works, the Department may: assign mortgages for value; release mortgages when paid; foreclose on mortgages; take deeds in lieu of foreclosure; or convey property after acquisition.

If a Program loan to a member of a cooperative housing corporation is secured by a security interest in the member’s cooperative interest, the Department may: 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. Without approval or execution by the Board of Public Works, the Department may: 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 Department may adopt regulations to carry out the Program.

To ensure that all areas of the State are served, the Department shall allocate at least annually among the counties the money appropriated for making Program loans under the Regular Rehabilitation Program. When allocating money to a county, the Department shall consider: 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. The Department may: 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.

Money that is received as repayment of principal or payment of interest on loans under the Program and that is not appropriated in the State budget may be credited to the Annuity Bond Fund, to be used to pay the principal of or interest on money borrowed by the State and appropriated to the Program.

The Department shall include in its request for appropriations for the Program: an estimate of the interest rates at which Program loans may be made in the next fiscal year; the total principal amount of Program loans expected to be made at those interest rates in the next fiscal year; and any other information that the Secretary of Budget and Management requests about Program loans.

If the Department certifies a political subdivision or nonprofit sponsor as capable of administering a local rehabilitation program, the political subdivision or nonprofit sponsor may originate and administer Program loans under regulations of the Department. 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: the size, training, and experience of the professional staff that would administer the Program; and the capability of the professional staff to: determine rehabilitation needs; establish rehabilitation programs; evaluate applications for Program loans; and monitor Program loans and the rehabilitation work done with them. If the Department determines that a political subdivision or nonprofit sponsor cannot or does not want to administer a local rehabilitation program, the Department may originate and administer Program loans from the allocation or suballocation to that political subdivision. The Department may: 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 portion of the total family income available for housing; the size of the family; the cost and condition of available housing; the ability of the family to compete successfully in the private housing market; and relevant standards and definitions established for federal and State housing programs. The Secretary may waive income limits for a borrower or occupant seeking a Program loan to rehabilitate a building that the State historical preservation officer finds historically or architecturally significant.

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 family of limited income owns and occupies the dwelling; and the Department determines the family of limited income cannot undertake the rehabilitation project without a grant. The terms may include: deferred payment of principal and interest until the maturity date or the date of any sale or other transfer of the building or an interest in the building; an interest rate as low as 0% or as high as is reasonable, given the incomes of the proposed occupants, if the interest rate does not violate any federal regulation governing the borrowing of money by the State; increased interest rates or accelerated payments of principal and interest, if the borrower no longer qualifies for the Program loan; and advance payments to a nonprofit sponsor for certain development costs, including architectural, engineering, and attorneys’ fees. Within the maximum income limits for families of limited income, the Secretary may establish: 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.

A Program loan: 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. Subject to subparagraph (ii) of this paragraph, a Program loan to a member of a cooperative housing corporation may be secured by a perfected security interest in the member’s cooperative interest. Before a Program loan is secured by a perfected security interest in the member’s cooperative interest, the Department shall enter into an agreement with the cooperative housing corporation that establishes the rights and obligations of the Department and the cooperative housing corporation with respect to the secured cooperative interest. 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. Program loans shall be made to: families of limited income owning and occupying the building to be rehabilitated; or sponsors or nonprofit sponsors. The Department may require that Program loans be insured. A Program loan may cover: costs of a rehabilitation project, including implementation costs such as appraisal, architectural, and engineering fees; and closing costs of the Program loan. The Department may modify the interest rate, the time or amount of payment, or any other term of a Program loan that is in default to facilitate repayment of the Program loan and achieve the purposes of the Program.

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 number that bears the same ratio to the total number of dwellings in the project as the amount the Program loan bears to the total financing of the undertaking; and the number of dwellings required for a community development project under § 4–217(b)(1)(ii) of this title or the number of dwellings that the issuer of the bonds chooses, whichever is greater, if a portion of the costs of the residential rehabilitation project is financed by government–issued, federally tax–exempt revenue bonds. Dwellings restricted for occupancy to meet other federal or State occupancy requirements may be counted toward the number required under subsection (a) of this section.

The Secretary shall establish standards to promote the maximum use of private financing. If a portion of a rehabilitation project is to be financed by a private lending institution, the Department shall require that the sponsor use all the private financing that the rehabilitation project can support without impairing: the rehabilitation project; or affordable housing for families of limited income, if the rehabilitation project is residential. As long as the State complies with all applicable federal treasury regulations governing borrowing money by the State, a Program loan shall be at an interest rate that at least covers: the administrative and other expenses of the Program; and reasonably expected losses from defaults on Program loans.

The Department shall establish a maximum percentage or amount of Program loans from the Rental Housing Programs Fund that may be used for nonresidential rehabilitation.

Rehabilitation loans under the Regular Rehabilitation Program and special loan programs shall be financed by the Special Loan Programs Fund.

In addition to making loans for rehabilitation projects to sponsors, nonprofit sponsors, or families of limited income from the Rental Housing Programs Fund and the Special Loan Programs Fund, the Department may use money from any other authorized source, including federal programs of assistance for rehabilitation, to make: 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: shall use federal programs of assistance for rehabilitation to the maximum extent consistent with the purposes of this subtitle; and may do all things necessary to qualify for participation in those programs. 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.

The purpose of a rehabilitation project is: 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: lead paint abatement; indoor plumbing; or shared, accessory, or sheltered housing; 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: those in force in the political subdivision where the building is located; or those that the Department sets by regulation for that political subdivision solely for purposes of this subtitle, if the political subdivision lacks codes and standards that the Secretary considers sufficient to promote the objectives of this subtitle. 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: within, attached to, or on the same parcel as a single-family, owner-occupied dwelling; and subordinate to but under the same ownership as the single-family, owner-occupied dwelling. “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: accommodates the owner-occupant; and provides sleeping and living facilities, meals, and assistance with daily activities for a rental fee to not more than 15 elderly individuals or individuals with disabilities. There is an Accessory, Shared, and Sheltered Housing Program. The Department shall operate the Accessory, Shared, and Sheltered Housing Program and make loans for rehabilitation costs for accessory, shared, and sheltered housing from the Special Loan Programs Fund under this subtitle. The terms for accessory, shared, and sheltered housing loans shall satisfy the requirements of § 4-916(b) of this subtitle. To qualify for an accessory housing loan, an applicant shall: 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 an accessory dwelling for a family of limited income for a fixed minimum term that the Department determines; or be a family of limited income when the loan is made and agree to use the loan proceeds to provide an accessory dwelling for a fixed minimum term that the Department determines. To qualify for a shared housing loan, an applicant shall: 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. To qualify for a sheltered housing loan, an applicant shall: 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.

There is an Indoor Plumbing Program. The Department shall: 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: the loan is made to a family of limited income that owns and occupies the dwelling and whose income is within a lower income range established under § 4-916(b) of this subtitle; and the Secretary determines that the family of limited income does not have enough income to repay the principal amount of the loan. To qualify for an indoor plumbing loan, an applicant shall: 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: has no or incomplete indoor plumbing or a failing septic system; and needs indoor plumbing pipes, equipment, wells, septic tanks or other on-site sewer system, or a connection to a community water or sewer system; 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 labor camp” means one or more structures, buildings, tents, barracks, trailers, vehicles, mobile homes, converted buildings, or unconventional enclosures of living space that are established, operated, or used as living quarters for four or more migratory workers engaged in agricultural activities, including related food processing. “Migratory labor camp” includes appurtenant land. “Migratory Housing Program” means the Migratory Worker Housing Program. “Migratory worker” means an individual from within or outside the State who: is not a year-round employee but moves seasonally from one place to another for work; and during a period of work, occupies living quarters that are not the individual’s permanent home. There is a Migratory Worker Housing Program. The Department shall: 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. To the extent applicable, migratory worker housing loans shall satisfy the requirements of § 4-916(b) of this subtitle. To qualify for a migratory housing loan, the owner of a migratory labor camp shall: 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.

There is a Radon and Asbestos Abatement Pilot Program. The Department shall: operate the Radon and Asbestos Abatement Pilot Program; and make loans for rehabilitation projects for radon and asbestos abatement. The terms of loans shall meet the requirements under §§ 4-917 through 4-919 of this subtitle. To qualify for a loan, an applicant shall: own a building in need of radon or asbestos abatement: that is otherwise structurally sound; or for which the applicant provides a commitment from a lender to finance improvements to make the building structurally sound; and make a proposal to the Department for treatment that complies with the requirements and procedures of the Department of the Environment for radon or asbestos abatement. In addition to the requirements in paragraph (1) of this subsection, the applicant shall: live in the building and be a family of limited income; agree to rent at least two-thirds of the dwellings in the building to families of limited income; or agree to provide congregate or group housing or temporary shelters to families of limited income.

In this section, “Grant Program” means the Accessible Homes for Senior Homeowners Grant Program. There is an Accessible Homes for Senior Homeowners Grant Program. The Department may make a grant to finance an accessibility–related renovation or repair activity for an elderly homeowner. The Department may establish standards to determine the eligibility of an applicant under the Grant Program. In determining whether to make a grant under the Grant Program, the Department shall require that an applicant submit evidence that the applicant cannot undertake the renovation and repairs without a grant. Grants under the Grant Program may be used in conjunction with other: accessible housing for seniors loans; and special loan programs under this subtitle. The Department may require that all or part of the grant under the Grant Program be repaid if conditions specified by the Department occur.

A person may not knowingly make or cause to be made a false statement of material fact, including an overstatement or understatement of financial condition, to influence the action of the Department on a grant or loan or an application for a grant or loan under this subtitle. 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 $5,000 or both. If a borrower violates this section, the Department may immediately accelerate the loan, whether or not a criminal prosecution has begun and regardless of the status of the prosecution.