Loan Amount. The Program shall determine limits on loan amounts from time to time. In making the determination under §A(1) of this regulation, the Program may consider factors including the following: Regional costs of affordable housing; The amount and payment terms of other financing available to borrowers; and Exceptional circumstances in individual cases or projects. Equity Capital. The Program may require the borrower to contribute as equity capital a minimum amount of cash to the transaction, in an amount determined as a percent of the first mortgage loan amount. Loan Terms. Interest Rate. The Program shall establish, from time to time, for loans under the Program, either a single interest rate or a range of interest rates based on household income. The interest rate may be as low as zero percent. Term. The loan term may not exceed the term of the first mortgage. Payments. General. Monthly payments shall be applied to expenses, when applicable, interest, and principal, in that order. Deferred Loans. Payments of principal or interest, or both principal and interest, may be deferred until the earlier of: The sale or other transfer of the property; The maturity date or prepayment of the first mortgage loan; or A default under the Program loan. Late Charge. Late charges, as permitted by law, may be imposed. Prepayment Penalty. A prepayment penalty may not be charged. Security for Loans. Loans shall be secured by a mortgage or deed of trust, in the form required by the Department, which shall be recorded in the land records of the county in which the property is located. The mortgage or deed of trust may be subordinate to not more than two other recorded mortgage liens. Insurance. Hazard Insurance. The borrower shall maintain fire and extended coverage insurance at the borrower's expense in an amount not less than the sum of the loan and any other indebtedness secured by the eligible residence, up to the value of the improvements. The hazard insurance policy shall: Be written by companies authorized to do business in Maryland; Be in force at the time of loan closing; Name the Department as a loss payee as its interest may appear in a standard mortgagee endorsement attached to or printed in the policy; and Contain terms and coverage satisfactory to the Department. Flood Insurance. If the building is in a 100-year flood plain, as designated by the United States Department of Housing and Urban Development, the: Eligible residence shall be covered by a flood plain insurance policy in an amount equal to the sum of the loan and any other indebtedness secured by the residence, naming the Department as beneficiary; and Flood plain policy may not be terminated without prior notification to the Department. Change of Ownership. The loan shall become due and payable upon the sale or transfer of the real property securing the loan unless the: Department has consented in writing to the assumption of the loan by a purchaser who meets the requirements of an eligible borrower under Regulation .04 of this chapter, and such other terms as are satisfactory to the Program; or Transfer is to a spouse, divorced spouse, or child who resides at the mortgaged property, or the transfer is otherwise in accordance with federal law. Tenant Income. The Secretary shall determine maximum household income levels for tenants occupying units in the eligible residence.