Form of Financial Assistance. The Department may offer HOME financial assistance in any of the following five forms: Interest-bearing and non-interest-bearing loans; Interest subsidies; Deferred payment loans; Equity investments; and Grants. The Department expects to offer most financial assistance in the form of grants or non-interest-bearing, deferred payment loans. Maximum Amount of Financial Assistance. The maximum amount of financial assistance to a single project or activity generally may not exceed the lesser of: $2,000,000; or An amount equal to the greater of the per unit dollar limits: Set under §221(d)(3)(iii) of the National Housing Act for elevator-type projects that apply to the area in which the housing is located; or Approved by HUD. In the discretion of the Department, a higher amount than the amount identified in §B(1)(a) of this regulation may be approved if: It does not exceed the amount in §B(1)(b) of this regulation and no other resources are available; The project serves more than the required number of income eligible households; The project involves the preservation of federal subsidies; The project is in default on a loan from the Department and the default can be cured by using HOME funds; or The higher amount will facilitate meeting set-aside requirements. Minimum Amount of Financial Assistance. If HOME funds are invested in a rental housing development or homeownership project, a minimum of $1,000 of HOME funds times the number of HOME assisted units in the project shall be invested. Term. The maximum term of financial assistance for HOME funds disbursed as loans is one of the following: If the HOME funds are used for development costs of the project, the earlier of the: Sale or discontinuance of use of the project to provide housing to income eligible households, or 40 years from the date of acquisition, completion of construction, or rehabilitation of the project except when other sources of financing require a longer term; A term not to exceed 18 months if the HOME funds are used to fund an operating deficit for a new construction or rehabilitation rental housing development project; Any term approved by the Department for HOME funds awarded from the Maryland HOME Initiatives Program Fund. Interest Rate. For homeownership projects, in order to accomplish the public purpose of serving income eligible households, the interest rate for HOME funds disbursed as loans generally is zero percent. In its discretion, the Department may require interest on HOME funds which may be repayable on a scheduled basis, or may be deferred. For rental housing development projects, interest rates for each loan shall be established based on the underwriting for each project and in accordance with the Program Guide. The maximum interest rate on a loan shall be at a rate which does not impair the financial viability of the project or the capability of the sponsor to provide rents which are affordable to income eligible households. The interest rate may be as low as zero percent, based upon projected cash flows for the proposed project. Repayment. Repayment shall be made in accordance with the loan documents. Interest and principal repayment may be deferred at the discretion of the Department, in accordance with the terms and provisions of the loan documents. In the case of repayments for terminated projects, a project shall be terminated and HOME funds disbursed as loans shall be repaid to the Department before maturity upon the earlier to occur of: Sale of all or any portion of, or interest in, the project; For rental housing developments, discontinuance of use of the project to provide housing to income eligible households; or For rental housing developments, termination of the project or activity before completion, unless the loan was to a CHDO under Regulation .09C or D of this chapter and the Department waives repayment, in whole or in part, under that regulation. Security for Capital Assistance Loans. Except as provided in §G(2) and (3) of this regulation, HOME funds disbursed as loans shall be secured by a recorded mortgage or deed of trust. If HOME funds are loaned to a local government as part of the funds for a project sponsored by a local government and a deed of trust transferring an interest in the property is not authorized, the funds may be secured by an instrument or agreement acceptable to the Department. Loans made to CHDOs under Regulation .09C and D of this chapter shall be required to be secured by a recorded mortgage, deed of trust, or declaration of covenants if the CHDO owns the site or obtains ownership of the site as a result of receipt of the loan. In the case of loans for rental housing development projects, the project shall comply with the loan terms indicated in COMAR 05.05.01.14—.18, provided that this chapter shall prevail in the event of a conflict between any provision of COMAR 05.05.01.14—.18 and any provision of this chapter. Reduction of Units. After project completion, the number of units designated as HOME-assisted may be reduced only in the following circumstances: In accordance with 24 CFR §92.210 with respect to troubled HOME projects; or In a project consisting of all HOME-assisted units, one unit may be subsequently converted to an on-site manager’s unit if: The conversion will contribute to the stability or effectiveness of the housing; and Notwithstanding the loss of one HOME-assisted unit, the costs charged to the HOME program do not exceed the actual costs of the HOME-assisted units and do not exceed the subsidy limit in §B of this regulation.