These regulations prescribe the policies, procedures, and authorizations for administering the Historic Preservation Loan Program and providing loans from the Historic Preservation Loan Fund of the Maryland Historical Trust, an agency within the Division of Historical and Cultural Programs of the Department of Planning. These regulations prescribe the policies, procedures, and authorizations for administering the Historic Preservation Loan Program and providing loans and transfers from the Historic Preservation Loan Fund of the Maryland Historical Trust, an agency within the Division of Historical and Cultural Programs of the Department of Planning. The objective of the Program is to provide a source of funding to assist and encourage efforts to acquire and preserve historic properties, including loans to local jurisdictions, nonprofit organizations, business entities, and individuals, and transfers to qualified cooperating nonprofit organizations. In this chapter, the following terms have the meanings indicated. Terms Defined. “Acquisition” means the act or process of acquiring fee title or an interest other than fee title of historic property, including the purchase or acquisition of preservation easements, leasehold estates subject to ground rents, development rights, or remainder interests. “Act” means State Finance and Procurement Article, §§5A-301 and 5A-327, Annotated Code of Maryland, as amended. “Administrative costs” means indirect costs for common or joint objectives that cannot be readily identified with an individual project, including a transferee’s costs of day-to-day general operations associated with carrying out a transfer and restoring or rehabilitating historic properties owned by a transferee for resale or lease. “Borrower” means an applicant who receives a loan through the Program. “Business entity” means a corporation, association, partnership, joint venture, or other legally organized entity. “Code” means the Annotated Code of Maryland, as amended. “Department” means the Department of Planning. “Director” means the Director of the Maryland Historical Trust. “Expenditure” means a disbursement of money from the Fund to the Trust for the acquisition of historic property or the restoration or rehabilitation of historic properties owned by the Trust. “Fund” means the Historic Preservation Loan Fund for the Program established by the Act. “Historic property” means a district, site, building, structure, monument, or object that is significant in the prehistory, history, upland and underwater archaeology, architecture, engineering, and culture of the State, and which, for loans only, is listed in or is eligible for listing in the Maryland Register of Historic Properties. “Loan” means the disbursement of a loan from the Fund. “Loan documents” means the note, loan agreement, and other documents between the borrower and the Trust which evidence the terms and conditions of the loan. “Local jurisdiction” means any of the 23 counties of the State of Maryland, the City of Baltimore, any municipal corporation in Maryland subject to the provisions of Article XI-E of the Maryland Constitution, and any duly authorized agency or instrumentality of a local jurisdiction. “Maryland Register of Historic Properties” means the register of historic properties in Maryland which is established by the Trust under State Finance and Procurement Article, §5A-323, Annotated Code of Maryland. “Nonprofit organization” means a corporation, foundation, governmental entity, 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 such entity. “Preparation costs” has the meaning stated in State Finance and Procurement Article, §5A-322, Annotated Code of Maryland, as amended. “Program” means the Historic Preservation Loan Program of the Trust established by the Act. “Programmatic expenses” means direct costs, excluding preparation costs, that can be specifically identified with the process of developing and implementing a subloan program, or a program for acquiring and rehabilitating historic properties for resale or lease, with the proceeds of a transfer. “Project” means one or more of the eligible activities set forth in Regulation .05 of this chapter. “Qualified cooperating nonprofit organization” means a nonprofit organization in good standing with the State Department of Assessments and Taxation that: Is based in the State; Operates Statewide; and Has demonstrated experience in: Rehabilitating historic structures; Managing preservation funds; and Holding preservation easements. “Rehabilitation” means the act or process of returning an historic property to a state of utility through repair or alteration which makes possible an efficient contemporary use while preserving those portions or features which are significant to its historical and cultural values. “Restoration” means the act or process of applying measures to sustain the existing form, integrity, and material of an historic property or of accurately recovering the form and details of an historic property as it appeared at a particular period of time by means of the removal of later work or by the replacement of missing earlier work. “Secretary” means the Secretary of Planning. “State Historic Preservation Officer” means the individual who administers the State Historic Preservation Program in the State under the provisions of the National Historic Preservation Act of 1966. “Subloan” means a transferee’s disbursement of the proceeds of a transfer as a loan under Regulation .05C(1)(d) and (e) of this chapter. “Transfer” means a disbursement of money from the Fund to a qualified cooperating nonprofit organization for one or more of the purposes identified in Regulation .05C(1)(a)—(c) of this chapter. “Transferee” means a qualified cooperating nonprofit organization that applies for and receives a transfer through the Program. “Trust” means the Maryland Historical Trust, an agency within the Division of Historical and Cultural Programs of the Department. “Trustees” means the Trustees of the Maryland Historical Trust. Eligible Loan Applicants. The following are eligible borrowers under the Program: Nonprofit organizations; Local jurisdictions; Business entities; and Individuals. Eligible Transfer Applicants. To be eligible for a transfer, an applicant shall be a qualified cooperating nonprofit organization. To be eligible for a loan or transfer under the Program, nonprofit organizations and business entities shall be in good standing, registered or qualified to do business in Maryland, and shall also have the legal capacity and all necessary legal authority to incur the obligations involved in the loans and transfers provided under the Program. Loans. The Trust may provide loans from the Fund to an eligible borrower for: Acquisition of historic property; Rehabilitation of historic property; Restoration of historic property; Refinancing of historic property; and Preparation costs that are directly related to work required or recommended by the Trust or the State Historic Preservation Officer through the review of a construction project in the State under Section 106 of the National Historic Preservation Act of 1966, as amended, or State Finance and Procurement Article, §§5A-325 and 5A-326, Annotated Code of Maryland, provided that the: Term of the loan may not exceed 24 months; and Borrower has evidence of permanent financing to serve as the source of repayment of the loan. Trust Expenditures. The Trust may directly expend moneys in an amount up to 50 percent of those moneys available in the Fund which are derived from repayments or prepayments of loans made from the Fund or the proceeds from the resale or lease of any properties originally acquired with moneys from the Fund for the: Acquisition of historic property; and Restoration or rehabilitation of historic properties owned by the Trust, which may include preparation costs. Trust expenditures under this section for acquisition, rehabilitation, or restoration shall be for use in accordance with the Trust's authorized purposes set forth in State Finance and Procurement Article, §5A-311, Annotated Code of Maryland, or for resale or lease by the Trust subject to appropriate preservation covenants. Trust expenditures under this section are not considered loans as defined in these regulations and are governed solely by the provisions of this section, Regulation .07 of this chapter, and any other regulation or provision of law to which this section or Regulation .07 of this chapter may specifically refer. Transfers. The Trust may provide transfers from the Fund to a transferee: To pay for the transferee to acquire historic properties or interests in historic properties for resale or lease; To pay costs, including preparation costs, directly related to the rehabilitation or restoration of historic properties owned by the transferee for resale or lease; To pay administrative costs incurred to restore or rehabilitate historic properties owned by the transferee for resale or lease, to the extent permitted under Regulation .08D(3) of this chapter; To make subloans to other nonprofit organizations, political subdivisions, and business entities to acquire, rehabilitate, restore, or refinance historic properties; To make subloans to individuals to rehabilitate or restore historic properties recognized by the National Park Service as national historic landmarks; or To pay necessary administrative costs and programmatic expenses associated with the transfer of funds, to the extent permitted under Regulation .08D(3) of this chapter. Transfers under this section are not considered loans as defined in these regulations. Application Solicitation. Each fiscal year the Trust will solicit applications for loans and transfers through the issuance of a public announcement of the availability of funds under the Program. The Trust shall post the announcement on its website and issue a press release containing the announcement. Funds Allocation. It is the intent of the Trust that Program funds be distributed Statewide. Funds shall be loaned or transferred based upon the satisfaction of application requirements and selection criteria contained in this regulation. If an application is submitted but funding is not then available under the Program, the Trust in its discretion may continue to process the application until such time as funding is available and then may authorize the loan or transfer without the necessity of a new application. Application Forms and Documentation. Applications shall be made on standard forms prescribed by the Trust. Each loan application shall include sufficient information and documentation to: Evaluate the historical or cultural significance of the property; Determine the ownership and all lessees or substantial users of the property; Evaluate the current and proposed condition and use of the property, and the extent, if any, to which the proposed activity will change the type of use or increase the intensity of the existing use of the property; Evaluate the nature and cost of the proposed activity; Evaluate the income and repayment capability of the applicant; Evaluate the readiness of the project to initiate activity and to be completed within an established time frame; Evaluate the administrative capability of the applicant; Determine the level of contribution by the appropriate local jurisdiction to support the project proposed to be financed; and Support such other factors as determined necessary by the Trust. Selection Criteria. The Trust shall review and evaluate loan and transfer applications in accordance with the following selection criteria: Relative historical or cultural significance of the resource to be treated; Urgency of the need for financial assistance for the project; Extent to which the project will contribute to the cumulative equitable Statewide geographic distribution of funds based on the concentration of historic properties; Comprehensiveness of the scope of the project; Readiness of the project to initiate activity and to be completed within an established time frame; Administrative, professional, and financial capability of the applicant; Extent to which the project stimulates or promotes other historic preservation activities; Informational and educational value of the project; Demonstration and innovation value of the project; Extent to which there is any proposed contribution by the appropriate local jurisdiction to support the project proposed to be financed; and Additional criteria which the Trust considers to be appropriate. Loan Processing Fee. The Trust may require applicants for loans to pay a fee to cover a portion of the cost of processing the loan. Notification Letter. Upon receipt of all documentation necessary to assess the feasibility of a project, the Trust shall issue a written notification letter to the applicant, which will detail conditions which shall be met in order for the Trust to recommend approval of a loan or transfer to the Trustees and the Secretary. Commitment Letter. After the approval process in Regulation .07 of this chapter has been satisfied, the Director is authorized to issue a commitment letter for: An approved loan setting forth the amount of the loan and the terms and conditions under which it shall be made; or An approved transfer setting forth the total amount of the transfer, the amount of the transfer that is funded with the proceeds of a sale of State general obligation bonds, and the terms and conditions under which the transfer shall be made. Expiration of Commitment. The Trust shall specify in the loan commitment letter a time limit within which the closing on the loan and recording of the loan documents shall occur, which time limit may be extended in the Trust’s sole discretion. The Trust shall specify in the transfer commitment letter a time limit within which the transferee shall sign and return the transfer document, which time limit may be extended in the Trust’s sole discretion. If the loan or transfer documents are not executed and returned to the Trust by the date stated in the commitment letter, the commitment shall expire and the Trust may withdraw the funds committed to the project and use them for any other project authorized by the Act. Rejection of Applications. If the Trustees determine not to recommend approval of a loan or transfer, or if the Secretary does not approve a loan or transfer, the Trust shall issue a written notice of rejection. Applicants may request reconsideration of a rejection made by the Trustees by submitting a written request to the Director which is received within 30 days following the date of the Trust's rejection notice. The Director shall respond in writing either within 30 days of receipt by the Trust of the request for reconsideration or within 5 days of the next Trustees' meeting, whichever occurs later. The Secretary shall take final action regarding any applicant's request for reconsideration of the Director's response. If the Secretary disapproves a loan or transfer recommended by the Trustees, the Secretary’s decision is final. A decision or reconsideration of a decision is not a contested case within the meaning of the State Government Article, §10-201 et seq., Annotated Code of Maryland. Withdrawal of Application. An applicant for a loan may withdraw an application at any time before closing of the loan by written notice to the Trust. The applicant shall bear any costs incurred, including, but not limited to, title examinations, credit reports, and appraisals. An applicant for a transfer may withdraw an application at any time before funds have been transferred. Inspections. The Trust may conduct inspections of the historic property as set forth below: Initial Inspections. Upon receipt of an application the Trust may conduct an initial inspection to determine the condition of the historic property and whether the proposed activities are eligible. Payment and Progress Inspections. The Trust may conduct periodic inspections during the construction of the project to: Ensure that activities are eligible, or that work is conducted in a satisfactory manner; Ensure conformance with any applicable standards established by the Trust, including, without limitation, the standards for acquisition, rehabilitation, and restoration referred to in Regulation .08A(9) of this chapter; and Verify percentage of completed work before releasing draws. Loan Closing. The closing of the loan shall be scheduled at a time and place acceptable to the borrower, the Trust, and the Offices of the Attorney General. Departmental Approval. After analysis by the Trust staff, the Trustees shall review each proposed loan, transfer, or expenditure from the Fund, including the general terms of the disbursement as well as any special terms and conditions for the project. The Trustee’s recommendations with regard to disbursements shall be forwarded to the Secretary. Upon receipt of the recommendations the Secretary shall approve or disapprove each disbursement. Board of Public Works Approval. The Secretary shall submit to the Board of Public Works for final approval action: Loans or transfers which are to be funded with the proceeds of a sale of State general obligation bonds; and All expenditures under Regulation .05B(1) of this chapter for acquisition, restoration, or rehabilitation. Inapplicable Provisions. Loans and transfers submitted to the Board of Public Works for approval in accordance with §B(1) of this regulation are not subject to the provisions of the State Finance and Procurement Article, Titles 4 and 5, Annotated Code of Maryland, or otherwise subject to review by the Department of General Services or any other State unit. General Requirements for Loans. Loans shall meet the following requirements: Maximum Loan Amount. The Trust shall establish a maximum loan amount for any proposed project proportionate to the value of the historic property to be assisted less any preexisting indebtedness secured by the historic property. Interest Rate. From time to time, the Trust shall establish interest rates in accordance with State Finance and Procurement Article, §5A-327(i)(1)(iv), Annotated Code of Maryland. Interest rates may be preferred in relation to rates for other loans made at the time if: The borrower is a nonprofit organization or a local jurisdiction; or Upon conclusion of any scheduled restoration or rehabilitation of the historic property, it will be occupied in whole or in part by individuals or families of limited income as determined by the Secretary of Housing and Community Development under Housing and Community Development Article, §4-212, Annotated Code of Maryland. Insurance. The borrower shall cause the assisted historic property to be insured against loss or damage by fire and other hazards, casualties, and contingencies as may be required from time to time by the Trust in amounts satisfactory to the Trust, as described in §C of this regulation. Term. Except as otherwise provided in Regulation .05A(5)(a) of this chapter regarding loans for preparation costs, the term of each loan may not exceed 20 years. Loan Repayment. Except as otherwise provided in §A(5)(b) of this regulation, a single monthly payment shall be charged which shall be applied to expenses, when applicable, interest, and principal in that order. At the discretion of the Trust, interest and principal repayments may be deferred in accordance with the terms and provisions of the loan documents. Late Charge. The Trust may impose late charges, as permitted by law. Security. Loans from the Trust may be secured, at the discretion of the Trust, by collateral acceptable to the Trust; and Collateral acceptable to the Trust may include: A cash escrow; A letter of credit; A pledge of depository accounts; A pledge of accounts receivable; An assignment of income; A security interest in machinery and equipment; A mortgage or deed of trust on the historic real property assisted by the loan; A mortgage or deed of trust on other real property satisfactory to the Trust; or Guarantees of repayment from guarantors acceptable to the Trust. Preservation Agreement. The borrower, and the owner of the assisted historic property if the owner is not the borrower, shall enter into an agreement with the Trust to preserve and maintain the historic property in such manner and for such duration as is acceptable to the Trust. Plans and Specifications. The plans and specifications for borrower’s rehabilitation and restoration projects under Regulation .05A(2) and (3) of this chapter or for a preparation cost project under Regulation .05A(5) of this chapter shall be subject to review and approval by the Trust. All work carried out on projects shall comply with: The Secretary of the Interior’s Standards for the Treatment of Historic Properties (36 CFR Part 68); and Standards for acquisition, rehabilitation, and restoration established by the Trust as well as any other applicable standards and requirements established by the Trust. Disbursement. Disbursement of loan funds will be made as the project progresses based upon requests for disbursement submitted by the borrower in a form satisfactory to the Trust. Modification of Loan. In order to facilitate the successful completion or operation of a project, the Trust may modify: The rate of interest; The time or amount of payment; or Any other term of a loan. Acceleration of Loan. In accordance with the terms of the loan documents, the Trust may accelerate the payment of the entire principal and interest due if the: Borrower defaults on the loan; Encumbrance of the deed of easement referred to in §C(5) of this regulation is extinguished by the foreclosure of a prior lien or otherwise; or Deed of easement referred to in §C(5) of this regulation or the preservation agreement referred to in §A(8) of this regulation is determined not to be legally enforceable by the Trust for any reason. Change of Ownership. The borrower may not sell, cease to own, assign, transfer, or dispose of all or any portion of the historic property during the term of the loan without the prior written consent of the Trust. Prepayment Penalty. The Trust may not charge a prepayment penalty. Other Requirements. The Trust may establish other terms and conditions in the loan documents as considered reasonable and necessary by the Trust. Deferred Loan Requirements. In addition to the conditions and requirements of §A of this regulation, deferred loans shall meet the following additional requirements: The loan term may provide for deferred payments of either principal or interest or of both principal and interest. The deferred terms shall provide for repayment of deferred amounts at the maturity date or any earlier date established by the Trust, or upon any sale or other transfer of the real property securing a loan, or any sale or other transfer of an interest in such real property. The Trust may, but need not, charge interest on deferred interest payments. Real Property Requirements for Loans. In addition to the conditions and requirements of §§A and B of this regulation, when real property secures or is assisted by the loan, the loan shall meet the following requirements: Mortgage or Deed of Trust. A mortgage or deed of trust on real property securing a loan shall be recorded in the land records of the political subdivision in which the real property is situated. The mortgage or deed of trust may be subordinate to other recorded mortgage liens, provided that the Trust and the other mortgagee or mortgagees give any required consents. Property, Liability, and Other Insurance. The borrower shall provide evidence that the borrower, the property owner if borrower is not the property owner, and contractors, have obtained and continues to maintain the following insurance, as required by the Trust: Owner's liability; Contractor's liability; and Owner's property or hazard, or builder's risk. All insurance required under this section shall: Be written by a company registered with the Maryland Insurance Administration, or a company approved by the Trust in the event the property and company are located out-of-State; Be in force at or before the time of loan closing; Not be terminable without prior notification to the Trust; and Contain such other terms and coverage satisfactory to the Trust. Owner's liability insurance shall: Name the Trust as an additional insured; and Remain in force for the duration of the loan. Contractor's liability insurance shall: Name the Trust as an additional insured; and Remain in place through completion of construction the project or such later date as the Trust may require. Owner's property or hazard insurance and builder's risk insurance shall: Name the Trust as an additional insured, loss payee, and mortgagee; and Remain in force for the duration of the loan. Title Insurance. The Trust may require the borrower to provide a standard American Land Title Association Loan Policy — 2021, as amended, which shall: Be issued by a title insurance company acceptable to the Trust; Be issued in an amount equal to the maximum principal amount of the loan; Insure the Trust as additional insured and mortgagee; Evidence that title to the real property on which the improvements are located is, as of the date of closing, vested in the borrower; Contain only exceptions and encumbrances approved by the Trust; and Not include exceptions for survey matters, general or blanket exceptions, materialman’s liens or for taxes or assessments that are due and payable as of the date of closing. In its discretion the Trust may require the borrower to provide an attorney’s certificate of title or other evidence of title acceptable to the Trust, which: Establishes that title to the real property on which the improvements are located is as of the date of closing, vested in the borrower; May contain only exceptions and encumbrances approved by the Trust; and May not include exceptions for survey matters, general or blanket exceptions or materialman’s liens or for taxes or assessments that are due and payable as of the date of closing. Appraisals. The Trust, in its discretion, may require: An appraisal of the assisted historic real property that secures a loan, showing the property's value after completion of any scheduled restoration or rehabilitation; or An appraisal of other real property that secures a loan, showing the property has sufficient value, taking into account all senior liens, to secure the lien at an 80 percent loan to value ratio. Deed of Easement. If the real property assisted by the loan is historic property, the borrower and the owner of the real property, if the owner is not the borrower, shall convey to the Trust a deed of easement containing preservation covenants applicable to the real property, in form, substance, and duration satisfactory to the Trust, which shall: Be recorded in the land records of the political subdivision in which the real property is situated; Satisfy the preservation agreement requirement of §A(8) of this regulation. The preservation agreement or deed of easement requirements set forth in §§A(8) and C(5)(a) of this regulation may be modified or waived by the Secretary if the Secretary determines that such an agreement or easement is impracticable under the circumstances. The requirement in §C(5)(a) of this regulation that a deed of easement be conveyed by a property owner if the owner is not the borrower may be modified or waived by the Director, as necessary, if the subject property is long-term leasehold property. General Requirements for Transfers. Transfers shall meet the following requirements: A transferee receiving a transfer from the Trust to make one or more subloans, in consultation with the Director, shall adopt appropriate guidelines to carry out the purposes enumerated in Regulation .05C(d) and (e) of this chapter. A transferee shall make the following information about subloans available on its website: The guidelines established under §D(1) of this regulation; The availability of funds; and Information on projects receiving financial assistance from a transfer. Use of Transfers for Administrative Costs and Programmatic Expenses. A transfer may be used to pay: Eligible administrative costs; and Eligible programmatic expenses. The administrative costs and programmatic expenses of transferee’s staff who perform both administrative and programmatic functions shall be allocated between the two different expense types and evidenced by accurate time reports. Administrative costs and programmatic expenses may not be paid with any portion of a transfer that consists of State general obligation bond funds. Administrative costs and programmatic expenses may be paid with any portion of a transfer that consists of special funds if: The administrative costs and programmatic expenses are related to the restoration or rehabilitation of historic properties owned by the transferee for resale or lease, or are necessary to carry out the transfer of funds; and The total administrative costs and programmatic expenses do not exceed 10 percent of the portion of a transfer that consists of special funds. Insurance. A transferee shall cause historic property that it acquires, restores, or rehabilitates for resale or lease with transfer funds to be insured against loss or damage by fire and other hazards, casualties, and contingencies through a policy that complies with the requirements set out in §C(2)(b) of this regulation. A transferee whose project involves the operation of a preservation loan fund program may be required to carry director and officer liability or employee dishonesty insurance policies, satisfactory to the Trust, which cover all individuals responsible for the security and control of the transfer. Deed of Easement. The transferee, as a condition of the sale or lease of historic property that it has acquired, restored, or rehabilitated with proceeds of a transfer, shall require the purchaser or lessee to: Enter into a preservation agreement with the transferee, or another entity approved by the Trust, to preserve and maintain the historic property in such manner and for such duration as is acceptable to the Trust; or Convey to the transferee, or another entity approved by the Trust, a deed of easement containing preservation covenants applicable to the real property, in form, substance, and duration satisfactory to the Trust, which shall be recorded in the land records of the political subdivision in which the real property is located. Plans and Specifications. The plans and specifications for projects involving a transferee’s rehabilitation and restoration of its own property for resale or lease funded under Regulation .05C(1)(b) of this chapter, including preparation costs, shall be subject to review and approval by the Trust. All work carried out on projects involving a transferee’s rehabilitation and restoration of its own property for resale or lease shall: Comply with the Secretary of the Interior’s Standards for the Treatment of Historic Properties (36 CFR Part 68); and Conform to standards for acquisition, rehabilitation, and restoration established by the Trust as well as any other applicable standards and requirements established by the Trust. Maximum Transfer Amount. The Trust shall establish a maximum transfer amount for any proposed project, including a maximum transfer amount proportionate to the value of any historic property to be assisted by a transfer, less any preexisting indebtedness secured by the historic property. Disbursement. Disbursement of a transfer will be made as a one-time disbursement based upon a request for disbursement submitted by the transferee in a form satisfactory to the Trust. Appraisals. For transfers to acquire, restore, or rehabilitate historic property, the Trust, in its discretion, may require an appraisal of the assisted historic real property, showing the property’s value after completion of any scheduled restoration or rehabilitation. Other Requirements. The Trust may establish other terms and conditions of the transfer, including disbursement requirements and default and remedy provisions, as considered reasonable and necessary by the Trust. Books and Records. Borrowers, contractors, subcontractors, and transferees shall maintain those books, accounts, and records and shall file with the Trust those financial and other reports as the Trust may from time to time require. All of these books, accounts, and records shall be open to the inspection of representatives of the Trust or other agencies of the State during reasonable working hours before, during, or after the term of the loan or transfer. Borrowers and transferees shall make their administrative offices and personnel, whether full-time, part-time, consultants, or volunteers, available to the Trust upon request before, during, or after the term of the loan or transfer. Books, accounts, and records of contractors and subcontractors shall be maintained and made available for inspection for up to 3 years after: With respect to loans, either the date of the borrower’s final draw of loan proceeds or the termination of the contractual relationship between the contractor and the borrower, whichever is later; or With respect to transfers, the date of the transfer. Reports. Borrowers shall submit a final report, interim reports, and supporting materials as may be required by the Trust, documenting project progress and evaluating project effectiveness. On or before June 30 each year, a transferee shall provide an annual report to the Trust outlining all funds transferred to it, describing how proceeds of a transfer were expended, and confirming that the funds were used for their intended purpose and in compliance with Regulation .08D of this chapter. The annual report shall distinguish between administrative costs and programmatic expenses. At the Trust’s request, a transferee shall provide a copy of the organization’s annual financial review or audit. Nondiscrimination. Borrowers and transferees may not discriminate on the basis of age (except with respect to residents in elderly projects), race, color, religion, ancestry or national origin, sex, marital status, familial status, sexual orientation, gender identity, disability, or source of income in leasing or otherwise providing dwelling accommodations or in any other aspect of the development, administration, or operation of any project financed or assisted under the Program, or in any aspect of employment by any borrower, developer, or contractor of any project financed under the Program. Each borrower and transferee shall comply with all applicable federal, State, and local laws and Departmental policies and programs regarding discrimination and equal opportunity in employment, housing, and credit practices 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 Governor's Code of Fair Practices, as amended; and The Department's Minority Business Enterprise Program, as amended, if the borrower does not have its own minority business participation program which is acceptable to the Trust and the Department. Modification. In the event of default of a loan the Trust may, subject to the approval of the Trustees and the Secretary: Modify the rate of interest; Defer payment of principal, interest, or both; Modify the term of the loan; or Modify the loan in any other manner in order to promote repayment of the loan and achieve the purposes of the Program. The Trust also shall obtain the approval of the Board of Public Works for any modification described in §A(1) of this regulation to a loan that was initially approved by the Board. The Trust may modify a transfer in any manner to achieve the purposes of the Program, subject to the approval of the Trustees and the Secretary for modifications that change the use of a transfer. Foreclosure. In the event of default of a loan the Trust may, without approval or execution by the Board of Public Works but subject to the approval of the Trustees and the Secretary, take title to the property by foreclosure or by deed in lieu of foreclosure and obtain and seek enforcement of a deficiency judgment. Notwithstanding the provisions of State Finance and Procurement Article, §5A-327(i)(4), Annotated Code of Maryland, if the Trust has obtained title to the property in accordance with §B(1) of this regulation, the Trust shall secure the approval of the Board of Public Works, the Trustees, and the Secretary before it reconveys title to the property. Recapture of Transfers. In the event that a transferee fails to comply with the terms and conditions of a transfer, subject to the approval of the Trustees and the Secretary, the Trust may revoke the transfer and require that the transferee reimburse all or a portion of the transfer. Except for waivers, any action or decision required or permitted to be taken or made by the Trust under these regulations may be taken or made by the Director of the Trust, or the Director’s designee. The Trust may terminate a loan or transfer, or refuse to make additional disbursements under the loan documents, if it finds that the borrower or transferee is not complying with any of the requirements of the Program or the loan or transfer documents. The Trust 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 Trust may enter into servicing agreements with mortgage lenders or other loan services acceptable to the Trust. Except for Regulation .07B of this chapter relating to Board of Public Works approval, 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; and 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. A person may not knowingly make or cause to be made any material misstatement of fact, including an understatement or overstatement of financial condition, in a statement or report in or regarding an application for a loan or transfer or affecting a loan or transfer already made. A person who violates any provision of this regulation is: Guilty of a misdemeanor and on conviction is subject to a fine not exceeding $5,000 or imprisonment not exceeding 2 years, or both; and Subject to immediate: Cancellation and acceleration of the loan; or Revocation of the transfer and the requirement to reimburse the transfer. State Finance and Procurement Article, §§5-203, 5A-318, 5A-327, and 5A-331, Annotated Code of Maryland;Executive Orders 01.01.1992.27C and 01.01.1998.04 Effective date: May 14, 1990 (17:9 Md. R. 1088) Regulation .05 amended effective January 2, 1994 (20:25 Md. R. 1944); April 5, 1999 (26:7 Md. R. 540); January 21, 2002 (29:1 Md. R. 22) Regulation .06C amended effective January 2, 1994 (20:25 Md. R. 1944) Chapter recodified from COMAR 05.08.02 to COMAR 34.04.02 Regulation .01 amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .02 amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .03B amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .04 amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .05 amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .05A amended effective November 15, 2010 (37:23 Md. R. 1613) Regulation .05C repealed effective April 24, 2017 (44:8 Md. R. 408) Regulation .06 amended effective July 9, 2012 (39:13 Md. R. 786); August 19, 2024 (51:16 Md. R. 744) Regulation .07 amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .07B amended effective November 15, 2010 (37:23 Md. R. 1613) Regulation .08 amended effective October 10, 2016 (43:20 Md. R. 1111); August 19, 2024 (51:16 Md. R. 744) Regulation .08C amended effective March 25, 2019 (46:6 Md. R. 347) Regulation .09 amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .10A amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .10C adopted effective August 19, 2024 (51:16 Md. R. 744) Regulation .11A, B amended effective August 19, 2024 (51:16 Md. R. 744) Regulation .13 amended effective August 19, 2024 (51:16 Md. R. 744)