Interest Rate. The interest rate to be paid on loans may not exceed 8 percent annual interest. The Administration may establish a lower interest rate if the Administration determines that a lower interest rate is required for the feasibility of the project to serve occupants of a specified income level. Term. The term of each loan generally may not exceed 2 years. The Administration may permit a loan term of greater than 2 years depending upon the size and nature of the project. Maximum Loan Amount. The maximum loan may not exceed the lesser of the: Amount of permanent financing approved for the project; or Total development costs, meaning the total costs as approved by the Administration, incurred in carrying out all works and undertakings which the Administration deems reasonable and necessary for the acquisition, construction, or rehabilitation of a project, including but not limited to the costs of: Acquisition of land and any buildings on it, Acquisition closing costs, Necessary studies, surveys, plans, and specifications, Architectural, engineering, or special services, Site preparation and development, Labor and materials for construction, reconstruction, or rehabilitation, Acquisition, repair, or improvement of such machinery, equipment, and furnishings as may be deemed necessary by the Administration, Expenses incurred in connection with initial occupancy or operation of the project as deemed necessary by the Administration, Fees incurred in connection with financing the project, Construction period interest on the loan, Indemnity and surety bonds, Premiums on insurance, Relocation costs, Contingency allowance deemed necessary by the Administration, if the loan is for a rehabilitation project, in an amount not to exceed 10 percent of the total cost of development, and Other costs the Administration deems reasonable and necessary. Preconstruction Loans. The Administration may make a loan for preconstruction costs alone if: There is a commitment in place from the Administration, or other lender acceptable to the Administration, to finance the rehabilitation or construction of the project; or The sponsor has received a written assurance that a commitment will be issued for construction and permanent financing through the: Farmers Home Administration Section 502 Rural Homeownership Loan Program, Farmers Home Administration Section 515 Rural Rental Housing Loan Program, or Other public loan program acceptable to the Administration. In either case, the loan shall be evidenced by a promissory note and, if the sponsor has title to the project, be secured by a mortgage. Land Bank Loans. The Administration may make a loan for acquisition only of land, and improvements if any, if: The sponsor is a local government; The sponsor agrees that within 2 years of the date of acquisition of the property it will: Submit to the Administration a detailed plan for the development of the acquired land, and Prepare and submit an application for construction and permanent financing to a governmental or private financial institution; The loan is evidenced by a note and secured by a mortgage on the property. If the sponsor is unable to submit a plan within the required 2-year period, the Administration may grant an extension if it determines that an extension is in the best interest of the State. The maximum amount of a land bank loan may not exceed the fair market value of the property plus reasonable closing costs. Repayment. The loan shall be repaid at the earliest of the stated loan maturity date, 90 days after the date the project is completed, or the closing of the permanent mortgage financing. For homeownership properties, loan repayment may be staged to coincide with the sale of individual units to families of limited or very limited income. Security for Loans. Loans shall be secured by a mortgage, except as otherwise provided in §D. All mortgages shall be in the form required by the Administration and shall be recorded in the land records of the county in which the project is located. Disbursement. Loan funds shall be held by the Administration and disbursed in accordance with a draw schedule approved by the Administration. Change of Ownership. The sponsor shall agree not to sell, cease to own, assign, transfer, or dispose of all or any part of the project or the sponsor's interest in it, during the loan term, without the prior written consent of the Administration. Insurance. Multi-Peril Insurance. The sponsor shall maintain fire and extended coverage insurance on the buildings comprising a project both during and after construction, which shall include such endorsements as the Administration may require, such as: Collapse; Explosion; Loss of rents; Vandalism. Liability Insurance. The sponsor shall maintain comprehensive general liability insurance with such endorsements as the Administration may require, both during construction and upon occupancy of a project. Flood Insurance. If the project is located on real property which is in the 100-year flood plain, as designated by the United States Department of Housing and Urban Development, the project shall be covered by a flood plain insurance policy. Before loan closing, permits shall be secured from the Maryland Department of Natural Resources and the political subdivision in which the project is located. Other Insurance. The sponsor shall provide at loan closing such other insurance, including builders' risk, boiler insurance, comprehensive automobile liability, and broad form workers' compensation as may be required by the Department. Title Insurance. For all secured loans the sponsor shall provide a standard American Land Title Association (ALTA) Loan policy or other form of title policy approved by the Administration and the Office of the Attorney General for an amount equal to the maximum principal amount of the loan, insuring the Administration, evidencing that title to the project on the date of closing is vested in the sponsor, and containing only standard exceptions and encumbrances approved by the Administration and the Office of the Attorney General. Terms and Conditions. Each insurance policy shall meet the following minimum requirements: Be written by companies acceptable to the Administration; Be written by companies which are reputable and financially sound, as determined by the Administration; Be in force at the time of loan closing; Name the Administration as loss payee and additional insured as its interest may appear in a standard mortgagee endorsement attached to or printed in the policy; Not be terminable without prior notification to the Administration; and Contain terms and coverage satisfactory to the Administration. Loan Documents. The Administration shall provide the sponsor with copies of relevant standard form loan documents which may include: A promissory note or deed of trust note; A deed of trust and security agreement; A loan agreement; An agreement and declaration of covenants and restrictions; A building loan agreement; A guaranty of completion or loan payments, or both; A completion assurance agreement; An assignment of the construction contract; An opinion of sponsor's counsel for nonprofit organizations; An opinion of contractor's counsel; A contractor's letter and certification; An assurance of compliance with civil rights requirements; A fair practices certification; and Such other documents as the Administration may find it desirable or necessary to require. Taxes. Taxes and assessments against the property which are due and payable shall be paid at or before closing.