These regulations describe the policies and procedures for making: Operating assistance grants to nonprofit organizations to promote the development and improvement of low income housing; Operating assistance grants to increase the capacity of nonprofit organizations to development low income housing using programs of the Department; and Technical assistance grants to nonprofit organizations, local governments, local development agencies, and local development corporations to obtain or provide advisory, consultative, training, information, and other services which will assist or carry out community development activities. The objectives of the program are to: Make operating assistance grants to nonprofit organizations to: Encourage experienced nonprofit organizations to develop housing for low income persons and households, Encourage nonprofit organizations to assist individuals in applying for loans under the programs of the Department, Provide assistance to nonprofit organizations which provide lead paint testing or assessment services to homeowners or landlords who apply for housing loan programs of the Department, and Build the capacity of nonprofit organizations to develop housing for low income persons and households by using the housing loan programs of the Department; and Make technical assistance grants to nonprofit organizations, local governments, local development corporations, and local development agencies to be used for advisory, consultative, training, and educational services to initiate or enhance community development activities. The terms appearing in the Act have the meanings defined there and, in addition, the meanings used in this chapter. Terms Defined. “Act” means Housing and Community Development Article, §§2-102 and 4-211 and Title 4, Subtitle 11, Annotated Code of Maryland. “Capacity building grant” means a grant to a nonprofit organization to enhance its ability and expertise to develop projects or activities financed under the homeownership programs, rental housing programs, or the special loan programs of the Department. Community-Based Organization. “Community-based organization” means a nonprofit organization that is: Headquartered in the same community as its projects or programs and provides services specific to the community; or Not headquartered in the same community as its projects or programs, if at least one-third of its board of directors is composed of community residents or members of organizations located in the community, and those organizations can show a history of involvement in the community. “Community-based organization” does not include community housing development organizations (CHDO) under the federal HOME program. “Community development” means the community development purposes of the Department as provided in Housing and Community Development Article, §4-202, Annotated Code of Maryland. “Department” means the Department of Housing and Community Development, a principal department of the State. “Eligible housing” means housing occupied by income eligible households. “Homeownership programs” means the: Settlement Expense Loan Program authorized by Housing and Community Development Article, Title 4, Subtitle 3, Annotated Code of Maryland; and Maryland Home Financing Programs, authorized by Housing and Community Development Article, Title 4, Subtitle 8, Annotated Code of Maryland, which include the: Reverse Equity Mortgage Program, Emergency Mortgage Assistance Program, Preferred Interest Rate Loan Program, and Construction Loan Program. “Homeownership Programs Fund” means the fund referred to in Housing and Community Development Article, §§4-501 and 4-502, Annotated Code of Maryland. “Household” means an individual or group of individuals who occupy a dwelling unit as their permanent residence. “Housing development” means any of the activities for which loans may be made under the rental housing programs, homeownership programs, and special loan programs. “Housing Finance Review Committee” means the seven individuals appointed by the Governor to review and make recommendations to the Secretary on financing requests in accordance with Housing and Community Development Article, §4-208, Annotated Code of Maryland. “Housing programs” means the rental housing programs, homeownership programs, and special loan programs. “Income eligible households” means households which meet the income limits established by the Secretary for any particular housing program. “Legal entity” means a corporation, association, general partnership, limited partnership, joint venture, nonprofit organization, business, government or political subdivision thereof, or governmental agency. “Local development agency” means a board, commission, agency, department, or authority of a municipality or county designated by the chief executive officer of that municipality or county for the purpose of carrying out community development activities. “Local development corporation” means a corporation or foundation of which no part of the net earnings inures to the benefit of any private shareholder or individual, organized and operated primarily for the purposes of fostering, encouraging, and assisting community development within the State. “Local government” means any municipal corporation subject to the provisions of the State Constitution, Article XI-E, or any one of the 23 counties of the State or Baltimore City. “Nonprofit organization” means a corporation, foundation, or other legal entity, no part of the net earnings of which inures to the benefit of any private shareholder or individual holding an interest in the entity. “Operating assistance grants” means production grants and capacity building grants. “Production grant” means a grant to a nonprofit organization which: Produces eligible housing; Assists an individual homeowner or sponsor to apply for a loan under the homeownership or special loan programs; or Has provided lead paint testing or assessment services to an applicant under the Lead Hazard Reduction Grant and Loan Program. “Program” means the Operating and Technical Assistance Grant Program. “Rental housing programs” means the loan programs funded with moneys in the Rental Housing Programs Fund, including the: Multifamily Rehabilitation Program of the Maryland Housing Rehabilitation Program authorized under Housing and Community Development Article, §4-201, Annotated Code of Maryland; Nonprofit Rehabilitation Program authorized under Housing and Community Development Article, §4-929, Annotated Code of Maryland; Rental Housing Production Program under Housing and Community Development Article, §4-1502, Annotated Code of Maryland; and Elderly Rental Housing Program authorized under Housing and Community Development Article, §4-402, Annotated Code of Maryland. “Rental Housing Programs Fund” means the fund referred to in Housing and Community Development Article, §4-504, Annotated Code of Maryland. “Secretary” means the Secretary of Housing and Community Development. “Special loan programs” means the loan programs funded with moneys in the Special Loan Programs Fund, including the: Regular Rehabilitation Program of the Maryland Housing Rehabilitation Program authorized under Housing and Community Development Article, §4-906, Annotated Code of Maryland; Accessory, Shared, and Sheltered Housing Program authorized under Housing and Community Development Article, §4-926, Annotated Code of Maryland; Lead Hazard Reduction Grant and Loan Program authorized under Housing and Community Development Article, §§4-708 and 4-709, Annotated Code of Maryland; Group Home Financing Program authorized under Housing and Community Development Article, §4-602, Annotated Code of Maryland; and Indoor Plumbing Program authorized under Housing and Community Development Article, §4-927, Annotated Code of Maryland. “Special Loan Programs Fund” means the fund referred to in Housing and Community Development Article, §4-505, Annotated Code of Maryland. “Technical assistance grant” means a grant to a nonprofit organization, local government, local development agency, or local development corporation to obtain or provide advisory, consultative, training, information, design, architectural, organization, or management assistance to plan, design, implement, expand, or improve a community development project or program or to strengthen the ability of the grantee or those assisted by the grantee to provide or promote community development activities. Production Grants. Nonprofit organizations shall meet the following requirements to qualify for a production grant: Have the legal capacity to enter into a grant agreement; Satisfy all legal requirements to operate in the State; Meet the performance standards of the Department, as follows: Not have defaulted on a prior loan from the Department; Not be currently barred or suspended from any of the Department's programs; Not have previously received a production grant and failed to complete the project in a timely manner; and Satisfy one of the following criteria: Have received a reservation or commitment of funds from the Department, or other source satisfactory to the Department, to finance the acquisition, construction, or rehabilitation of: Rental housing of the type which is eligible for financing through the rental housing programs or special loan programs, A group home which is eligible for financing through the Group Home Financing Program of the special loan programs, or Single family for-sale housing or an advance reservation of mortgage funds for income eligible households to purchase housing developed by the nonprofit organization which are eligible activities through the homeownership programs; or Assist a third party applicant by having provided: Technical assistance in applying for a loan under the special loan programs to individuals who reside in a dwelling located in a noncertified jurisdiction, or providing lead paint testing or assessment services to homeowners and landlords who have applied for a loan through the Lead Hazard Reduction Grant and Loan Program which is one of the special loan programs, and The Department's certification that the organization's efforts were responsible for originating the application and that the application was not processed by a local government certified as a local administrator by the special loan programs. Capacity Building Grants. A nonprofit organization shall meet the following requirements to qualify for a capacity building grant: Have the legal capacity to enter into the grant; Satisfy all legal requirements to operate in the State; Not have received a prior capacity building grant; Except as set forth in §C of this regulation, not have participated, within the 2 years before making application for a capacity building grant, in any projects or activities financed by the housing programs for which it is applying to develop capacity; and Meet the performance standards of the Department, as follows: Not have defaulted on a prior loan from the Department, and Not be currently barred or suspended from any of the Department's programs. A nonprofit organization may be eligible for a capacity building grant if the nonprofit organization has undertaken projects or activities with a housing program within the 2 years before making application for a capacity building grant for the same program, but has insufficient experience and expertise to undertake additional housing development, as determined in the sole discretion of the Department, based on: The frequency, scope, size, and complexity of the prior activity or project; The staffing, resources, and expertise of the nonprofit organization; and Other factors considered relevant by the Department. Joint Applications. Two or more nonprofit organizations may apply jointly for a capacity building grant provided each applicant qualifies as an eligible grantee. For example, a nonprofit organization with experience developing rental housing and a nonprofit organization with experience developing homeownership housing may apply jointly for a capacity building grant to increase the capacity of the former nonprofit organization to undertake homeownership development and the latter to undertake rental housing development. Nonprofit Status. Nonprofit organizations which are affiliated with or controlled by a for-profit organization shall not be eligible for operating assistance grants. Technical Assistance Grants. A nonprofit organization, local development agency, local government, or local development corporation shall meet the following requirements to qualify for a technical assistance grant: Have the legal capacity to enter into the grant; Satisfy all legal requirements to operate in the State; and Meet the performance standards of the Department, as follows: Not have defaulted on a prior loan from the Department, and Not be currently barred or suspended from any of the Department's programs. Production Grants. Production grants may be used for any purpose for which the grantee is legally authorized to expend funds, including: General operating costs, salaries, benefits, organizational costs, rent, and utilities; Costs associated with applying for a loan or assisting individuals or legal entities in applying for a loan under the housing programs; and Costs associated with lead paint testing or assessment services under the Lead Hazard Reduction Grant and Loan Program, one of the special loan programs. Capacity building grants may be used for any costs associated with enhancing or building the ability of the organization to participate successfully, or assisting others in participating successfully, in the housing programs, including: Staff salaries and benefits; The cost of consultants or services used to develop expertise in areas related to the housing programs; Training and education programs in areas which increase the nonprofit organization's capacity to undertake housing development, including market analysis, finance, construction, appraisal review, and management; A portion of general operating costs of the nonprofit organization reasonably associated with the activities related to a housing program for which the grant is awarded, including travel, administrative overhead, telephone, postage, office supplies, publications, and services; Furnishings and equipment for staff involved in housing development activities, including desks, chairs, calculators, and personal computers; Costs directly associated with undertaking housing development under the housing programs including options, appraisals, and market analyses; and Other costs approved by the Department in its sole discretion. Technical assistance grants may be used for any costs associated with advisory, consultative, training, information, design, architectural, organization, or management assistance to plan, design, implement, expand, or improve a community development project or program or to strengthen the ability of the grantee or those assisted by the grantee to provide or promote community development activities, including: Staff salaries and benefits; The cost of consultants or services used to develop expertise in areas related to community development; Training and education programs in areas which increase the grantee's capacity to undertake or enhance community development, including market analysis, finance, construction, appraisal review, and management; A portion of general operating costs of the grantee reasonably associated with community development activities of the grantee, including travel, administrative overhead, telephone, postage, office supplies, publications, and services; Furnishings and equipment for staff involved in community development activities, including desks, chairs, calculators, and personal computers; Costs directly associated with undertaking community development; and Other costs approved by the Department in its sole discretion. Allocations. The amount of funds available in the fiscal year for operating assistance grants for each of the housing programs and for technical assistance grants shall be determined as of July 1 of each fiscal year. Initial determinations may be adjusted if appropriated funds available for the housing programs are increased or decreased after July 1 in any fiscal year. The Department shall determine annually the proportions of available funds to be allocated to production grants, capacity building grants, and technical assistance grants. Within a State fiscal year any available funds which are not used for the type of grant for which the funds were allocated initially may be used for the other type of grant or for loans. The Department shall notify nonprofit organizations and local governments, and in the case of technical assistance grants, the Department shall also notify local development corporations and local development agencies, of allocations, fund availability, and application cycles. Best efforts shall be made to award grants to facilitate the full use of program funds in accordance with initial allocations of funds. Production Grants. Production grants shall be evaluated in one or more funding rounds in each fiscal year, at the discretion of the Department, taking into consideration the following factors: Geographic area served by the nonprofit organization; The number of eligible housing units produced by the nonprofit organization; The number of individuals the nonprofit organization assisted in obtaining loans through the special loans program; The number of homeowners or landlords assisted by the nonprofit organization with lead paint testing or assessment services in connection with the Lead Hazard Reduction Grant and Loan Program; and Other factors considered relevant by the Department. Preference shall be given to community-based organizations in evaluating production grants. Capacity Building Grants. Capacity building grants shall be evaluated on a competitive basis in one or more rounds of competition, at the discretion of the Department, taking into consideration the following factors: The number of housing units anticipated to be developed consistent with realistic organizational goals; Expected growth and expansion of the nonprofit organization in the area of housing development; The extent to which the proposed organizational and staffing plan supports potential growth in capacity to meet housing production goals; Geographic area served by the nonprofit organization; Performance of an existing nonprofit organization in carrying out nonhousing activities; and Other factors considered relevant by the Department. Technical Assistance Grants. Applications for technical assistance grants shall be evaluated on an ongoing basis, as applications are received in each fiscal year, taking into consideration the following factors: The need of the individuals or communities assisted by the applicant for community development projects or programs; The geographic area served by the applicant; The performance of the applicant in carrying out existing activities; The ability of the applicant to use the technical assistance grant to improve the ability of the applicant or those assisted by the applicant to provide or promote community development activities; Whether the proposed project has measurable outcomes; and Other factors considered relevant by the Department. Production Grant Amounts. Production grants may be made in the following amounts: For projects which produce rental housing, grants may not exceed an amount equal to 1 percent of the amount of the reservation or commitment of funds the applicant has received to produce rental housing, provided that a grant may not be less than $1,500 or more than $13,000; For projects which produce homeownership units, grants may be in an amount equal to $100 for each unit of housing identified by a nonprofit organization in a reservation or commitment of funds the applicant has received to produce homeownership units provided that a grant may not be less than $1,000 or more than $5,000; For projects financed under the Group Home Financing Program, grants shall be in an amount equal to $750 for each project for which the nonprofit organization makes application for a loan provided that the total amount of grants awarded for this purpose to a single nonprofit organization in one fiscal year may not exceed $1,500; and For nonprofit organizations which assist individuals in making applications for loans under the other special loan programs or provide lead paint testing or assessment services to individuals who apply for a lead abatement loan, a grant shall be in an amount not to exceed $150 for each individual application submitted to the Department provided that the total amount of funds awarded for this purpose to a single nonprofit organization in one fiscal year may not exceed $5,000. Capacity Building Grant Terms. Capacity building grants shall be subject to the following terms and conditions: The total amount of a grant may not exceed $65,000; A grant may be disbursed over a 1-year, 2-year, or 3-year term; Grants payable over a multi-year period are subject to limitations in the amount of disbursements in each year as established by the Department. Contribution for Capacity Building Grants. Nonprofit organizations shall be required to make a contribution to the activities funded by capacity building grants. A nonprofit organization's contribution may be in the form of: Cash; The in-kind value of: Office space, Salaries and fringe benefits for administrative and support staff, and A portion of general operating and administrative costs reasonably attributable to the housing development activities for which the grant is awarded; or Other contributions acceptable to the Department. Production grants, technical assistance grants, or other State and federal funds administered by the Department may not be used to satisfy the contribution requirement of a nonprofit organization. The amount of the contribution of a nonprofit organization is as follows: For grants with a 1-year term, the contribution shall equal $1 to every $1 of grant funds; For grants with a term of more than 1 year, the contribution shall equal: In the first year of a grant, $1 to every $3 of grant funds, In the second year of a grant, $1 for every $1 of grant funds, and In the third year of a grant, $2 for every $1 of grant funds. Limitations on Capacity Building Grants. Funding for capacity building grants with a term in excess of 1 year shall be subject to: The availability of grant funds for each year a grant agreement is in effect; and Performance of the grantee in accordance with the grantee's plan for building its capacity to develop housing. A recipient of a capacity building grant may receive a production grant or technical assistance grant during the term of the capacity building grant. Grantees shall be required to identify the housing programs for which a grant is intended to build capacity. Only one capacity building grant, whether for a 1-year, 2-year, or 3-year term, may be made to any one nonprofit organization. Technical Assistance Grant Terms. The total amount of a technical assistance grant may not exceed $50,000. A technical assistance grant shall be disbursed over a 1-year term. Grantees shall make a contribution to the activities funded by technical assistance grants, which may be in the form of: Cash; The in-kind value of: Office space, Salaries and fringe benefits for administrative and support staff, and A portion of general operating and administrative costs reasonably attributable to the community development activities for which the grant is awarded; or Other contributions acceptable to the Department. The amount of the contribution of a grantee shall equal $1 to every $1 of grant funds. Production grants, capacity building grants, or other State and federal funds administered by the Department may not be used to satisfy the contribution requirement of a grantee. A recipient of a technical assistance grant may receive a production grant or capacity building grant during the term of the technical assistance grant. Production Grant Applications. Applications for production grants shall be on the form approved by the Department, including the following supporting documentation: Organizational documents of the applicant; Evidence of the number and type of housing units produced by the nonprofit organization; The source of funding for the housing units produced; The amount of funds the applicant is seeking; and Other documentation the Department considers necessary to evaluate the grant request. Applications for production grants for nonprofit organizations which assist individuals applying for a loan under the homeownership or special loan programs or which provide lead paint testing or assessment services under the Lead Hazard Reduction Grant and Loan Program shall also include a description of the: Services to be provided; Geographic area in which the service will be provided; Expected number of applicants that will be assisted; and Expected types of housing or activities for which the applicants will seek loans. Grants awarded based on expected applications shall be funded only after the individuals assisted by the grantee have filed application for a loan. Capacity Building Grant Application. Applications for capacity building grants shall be on the form approved by the Department. The application shall include the following information and supporting documentation: Organizational documents of the applicant; A comprehensive strategic development plan which details the organization's short-term and long-term housing development goals; A description of the applicant's participation in previous housing activities and projects with particular emphasis on the last 5 years; A description of the geographic area in which the applicant will concentrate the organization's efforts; Identification and description of matching funds and resources; The term and amount of funds the applicant is seeking; and Other documentation the Department considers necessary to evaluate the grant request. Technical Assistance Grant Application. Applications for technical assistance grants shall be on the form approved by the Department. The application shall include the following information and supporting documentation: Organizational documents of the applicant; A description of the project or program to be funded with the technical assistance grant; A description of the geographic area in which the applicant will concentrate its efforts; An operating budget for the project or program, including the use of funds and the identification and description of matching funds and resources; The term and amount of funds the applicant is seeking; and Other documentation the Department considers necessary to evaluate the grant request. Production Grant Awards. Applications for production grants shall be evaluated by the Director of the Department's Division of Development Finance who shall make recommendations to the Secretary for awards of production grants. The Secretary may disapprove or approve a grant either on the terms recommended by the Director of the Division of Development Finance or on other terms and conditions as the Secretary considers appropriate. Following approval by the Secretary, production grants shall be disbursed directly to the nonprofit organization. Capacity Building Grant Awards. Applications for capacity building grants shall be evaluated by the Director of the Department's Division of Development Finance who shall make recommendations to the Secretary for awards of capacity building grants. The Secretary may disapprove or approve a grant either on the terms recommended by the Director of the Division of Development Finance or on other terms and conditions as the Secretary considers appropriate. Following approval by the Secretary, the Department shall enter into a grant agreement with each successful applicant. Technical Assistance Grant Awards. Applications for technical assistance grants shall be evaluated based on the criteria set forth in Regulation .06D of this chapter by the Director of the Department's Division of Development Finance who shall make recommendations to the Secretary for awards of technical assistance grants. The Secretary may disapprove or approve a grant either on the terms recommended by the Director of the Division of Development Finance or on other terms and conditions as the Secretary considers appropriate. Following approval by the Secretary, the Department shall enter into a grant agreement with each successful applicant. In any fiscal year, the Secretary may reserve technical assistance funds for technical assistance projects or programs operated by the Department. Housing Finance Review Committee. Except as provided in §G(2) of this regulation, all grants awarded by the Secretary under the program shall be reported to the Housing Finance Review Committee as an informational item only and not for approval, disapproval, or modification. Technical assistance grants made for commercial revitalization community development projects do not need to be reported to the Housing Finance Review Committee. Recipients of capacity building grants and technical assistance grants shall maintain accurate financial records, in a form acceptable to the Department, of all transactions which relate to the grant, and make these records available to the Department for review on request for a period of not less than 3 years following the expiration of the grant agreement. Grantees receiving capacity building grants and technical assistance grants shall submit a periodic progress report, in the form required by the Department and on the schedule specified in the grant agreement, which clearly shows progress of the grantee in relation to the grantee's strategic plan and proposed goals and objectives. Capacity building grantees and technical assistance grantees who do not show adequate progress in meeting goals may be required to accept technical assistance from the Department or may not be approved for funding in the subsequent years of the grant. All grantees under this program shall make their books, accounts, and records, their administrative offices and personnel, whether full-time, part-time, consultants, or volunteers, available to the Department during reasonable working hours, for the duration of the grant period and for a period of not less than 3 years following the expiration of the grant agreement. Grantees may not discriminate on the basis of race, color, religion, national origin, sex, marital status, physical or mental disability, sexual orientation or age except with regard to age as permitted under the federal Housing for Older Persons Act, as amended from time to time, or other similar federal laws, in leasing or otherwise providing dwelling accommodations or in any other aspect of the development, administration, or operation of any project or undertaking financed or assisted under the program, or in any aspect of employment by any grantee in the construction, repair, or maintenance of any property financed or assisted under the program. Each grantee shall comply with applicable federal, State, and local laws and Department policies and programs regarding discrimination, equal opportunity in employment, housing, and credit practices, and drug and alcohol free workplaces, including: Titles VI and VII of the Civil Rights Act of 1964, as amended; Title VIII of the Civil Rights Act of 1968, as amended; The Americans with Disabilities Act of 1990, as amended; The Department's Minority Business Enterprise Program, as amended. Executive Order 01.01.1989.18, Drug and Alcohol Free Workplace, and any Department or State regulations adopted or to be adopted to carry out the requirements of that Order. The Fair Housing Amendments Act of 1988, as amended; and State Government Article, Title 20, Annotated Code of Maryland, as amended. Covenants implementing these requirements, including affirmative action measures, shall be included in appropriate agreements between the Department and other parties. Except for waivers under §D of this regulation, any action or decision required or permitted to be taken or made by the Department under these regulations may be taken or made by the Director, Division of Development Finance, or the Director's designee. The Department may terminate a grant or refuse to make additional disbursements under a grant agreement if it finds that the grantee is not complying with any of the requirements of the Program or the grant agreement. The Department may establish from time to time operational handbooks or manuals governing matters relating to the Program including descriptive statements of Program procedures which do not directly affect the rights of the public or the procedures available to the public. The Secretary may waive or vary particular provisions of these regulations if: The waiver or variance is not inconsistent with the authorizing provisions of the Act; In the written determination of the Secretary, the application of the regulations in a specific case or in an emergency situation would be inequitable or contrary to the purposes of the Act; and The Office of the Attorney General approves the waiver for form and legal sufficiency. A person may not knowingly make or cause to be made any false statement or report in any documents required to be furnished to the Department by any agreement relating to the Program. Housing and Community Development Article, §§2-102 and 4-211 and Title 4, Subtitle 11, Annotated Code of Maryland Effective date: Regulations .01—.12 adopted as an emergency provision effective April 8, 1991 (18:9 Md. R. 982); emergency status expired September 8, 1991 Regulations .01—.12 adopted effective September 16, 1991 (18:18 Md. R. 2003) Chapter revised effective September 6, 1999 (26:18 Md. R. 1374) Regulation .03B amended effective March 5, 2012 (39:4 Md. R. 336) Regulation .08E amended effective October 4, 1999 (26:20 Md. R. 1544) Regulation .08G amended effective March 5, 2012 (39:4 Md. R. 336) Regulation .10 amended effective March 16, 2015 (42:5 Md. R. 485) Regulation .11A amended effective October 4, 1999 (26:20 Md. R. 1544)