This chapter describes the policies, procedures, and authorizations for selling single-family properties owned by the Department to eligible nonprofit organizations on terms defined in the regulations, for the purpose of resale to purchasers who will occupy the properties. The basic objectives of the Program are to: Provide for the sale of single-family properties owned by the Department as a result of the Department's acquisition at foreclosure sale or by deed in lieu of foreclosure following a borrower default under the several loan programs or mortgage insurance program operated by the Department; Encourage the health and vitality of communities where these properties are located by reducing the period of vacancy for these properties and facilitating renovation and homeownership of these properties; and Encourage the participation of nonprofit organizations that work in these communities by allowing the nonprofit organizations to purchase these properties in order to return them to homeownership status. In this chapter, the following terms have the meanings indicated. Terms Defined. “Act” means Housing and Community Development Article, §§3-205, 4-805, and 4-909, Annotated Code of Maryland. “Area of operation” means the geographic area the nonprofit organization states to be the area within which it carries out its activities. “Deed-in-lieu” means a deed given by a borrower to a lender to satisfy a debt and avoid foreclosure. “Department” means the Department of Housing and Community Development, a principal department of the State. “Division” means the Division of Credit Assurance, a division of the Department. “Eligible property” means a single-family property owned by the Department that appears on a list of properties selected by the Division to be offered to eligible nonprofit organizations participating in the Program. “Internal Revenue Code” means the Federal Internal Revenue Code of 1986 and the regulations promulgated under it. “Nonprofit organization” means a not-for-profit corporation, foundation, or other legal entity that is exempt from federal income tax under §501(c)(3) of the Internal Revenue Code. “Settlement costs” means the following costs: Attorney fees, including title examination fees, not to exceed $500; Document preparation fees; Recordation fees; State and local transfer and recordation taxes; and Other costs approved by the Division in its sole discretion. “Program” means the Community Housing Support Program. “Property taxes” means the taxes assessed and levied against the property annually by the State, county, and municipality. “Single-family property” means a one-unit to four-unit residential property. Offer to Purchase. An eligible nonprofit organization approved for participation in the Program as described in Regulation .05 of this chapter may make an offer to purchase an eligible property, as defined in Regulation .03B of this chapter, that is located in the operational area of the nonprofit organization. The offering price shall be the sales price set by the Division for that property. The purchase contract shall be in the form required by the Division. Financing. The Department shall provide financing to the nonprofit purchaser on the following terms: The term of the loan shall be for 1 year from the date of purchase by the nonprofit organization, at which time the principal amount of the loan shall be repaid in full whether or not the nonprofit organization has sold the property as provided in §B(4) of this regulation; The interest rate shall be zero percent per year; The loan shall be secured by a deed of trust constituting a first lien on the property in favor of the Department; On or before the end of the 1-year loan term, the property shall be sold to a person or persons who intend to occupy the property as their principal residence, except as provided in §B(6) of this regulation; Before the Department releases the deed of trust, the nonprofit organization shall provide a copy of the contract with its purchaser and a certification by the purchaser of the intention to occupy the property as the purchaser's principal residence; If the nonprofit organization demonstrates to the satisfaction of the Department that it is not feasible to sell the property to a purchaser as provided in §B(4) of this regulation, the property may be rented or retained by the nonprofit organization; Renovation, marketing, sales, and other matters are solely the responsibility of the nonprofit organization that purchases the property; and The nonprofit organization shall agree that if the nonprofit organization fails to repay the loan when due, the nonprofit organization shall offer the Department a deed-in-lieu in the form approved by the Department, and the Department shall have the option of whether to accept the deed-in-lieu. Settlement and Payment Terms. The Department shall execute a deed in the form approved by the Department. The nonprofit organization shall execute loan documents, including a note and deed of trust, in the form approved by the Department. The Department will pay settlement costs as defined in Regulation .03B(9) of this chapter. The Department shall waive reimbursement by the nonprofit organization at settlement for the organization's pro rata share of property taxes paid in advance by the Department. Settlement shall occur within 45 days of the date of the purchase contract, at a date and time mutually acceptable to the Division and the purchaser. Limit on Number of Homes. An eligible nonprofit organization may not own, at any one time, more than two properties purchased through the Program. A nonprofit organization may apply for approval to participate in the Program by submitting the following documents for review by the Division: An application in the form required by the Division; A certification in the form required by the Department that the nonprofit organization shall abide by all requirements of: Titles VI and VII of the Civil Rights Act of 1964 as amended, Title VIII of the Civil Rights Act of 1968 as amended, and, for nonresidential facilities, the Americans with Disabilities Act of 1990, The provisions of the Governor's Code of Fair Practices, as amended, The Department's Minority Business Enterprise Program, and Governor's Executive Order 01.01.1989.18 relating to drug-free and alcohol-free workplaces, and any Department regulations adopted to carry out the requirements of that order; A contract affidavit in the form required by the Department; A copy of the following organizational documents for the nonprofit organization: A letter from the Internal Revenue Service granting tax-exempt status under §501(c)(3) of the Internal Revenue Code, Articles of incorporation or other applicable documents, Bylaws, Certificate of good standing, and A resolution authorizing application for participation in the Program and purchase and financing for a particular property where applicable, and the designation of the person or persons authorized to sign on behalf of the organization; and Any other information required by the Program. Additional Requirements. The nonprofit organization shall be in good standing and may not be under suspension or debarment from any of the Department's programs in any action under COMAR 05.01.05. The nonprofit organization may not be in default under any loan from the Department. At the time of settlement, the nonprofit organization shall have all necessary legal and corporate authorizations to purchase the property and incur the obligations of the Department loan. An action or decision required or permitted to be taken or made by the Department under Housing and Community Development Article, §§3-205, 4-805, and 4-909, Annotated Code of Maryland, or this chapter, except for waiver under Regulation .07 of this chapter, may be taken by the Director of the Division or the Director's designee. The Department may establish from time to time operational handbooks or manuals governing matters relating to the Program, including descriptive statements of program procedures that do not affect the rights of, or the procedures available to, the public. The Secretary may waive or vary particular provisions of this chapter to the extent that the waiver is not inconsistent with the Act if, in the written determination of the Secretary, the application of a regulation in a specific case or in an emergency situation would be inequitable or contrary to the purposes of Housing and Community Development Article, §§3-205, 4-805, and 4-909, Annotated Code of Maryland. The Department may: Assign a mortgage for value; Release a mortgage; Foreclose a mortgage; Acquire property securing a loan in default; Encumber, sell, or otherwise dispose of property acquired in connection with a loan in default; or Obtain and seek enforcement of a deficiency judgment. In the event of default, as provided in the loan documents, or in the event of a prospective default, the Department, in its sole discretion, may: Modify the rate of interest; Modify the time or amount of payment; Modify the term of the loan; Modify the loan in any other way in order to promote repayment of the loan and achieve the purpose of the Program; or Accelerate the loan and foreclose on the deed of trust, or accept a deed in lieu of foreclosure. Housing and Community Development Article,§§3-205, 4-805, and 4-909, Annotated Code of Maryland; Executive Order 01.01.1992.27C Effective date: October 30, 2000 (27:21 Md. R. 1974)