Code of Maryland Regulations (Last Updated: April 6, 2021) |
Title 05. Department of Housing & Community Development |
Subtitle 04. SPECIAL LOAN PROGRAMS |
Chapter 05.04.11. Special Housing Opportunities Program |
Sec. 05.04.11.14. Loan Procedures—Construction or Rehabilitation
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A. Construction Period Disbursements. If the loan finances construction or rehabilitation, the Administration shall:
(1) Conduct on-site inspections of the construction;
(2) Make construction loan disbursements on the basis of work-in-place, plus materials acceptably stored on-site, less a retention of up to 10 percent of the construction request; and
(3) Make disbursement for materials acceptably stored off-site, if the materials are:
(a) In a bonded warehouse;
(b) Set aside and labeled with the project's name;
(c) Inspected by the Administration's inspector;
(d) Insured with the Administration as a named insured; and
(e) Documented by evidence of payment for the materials.
B. Cost Certification. For loans financing new construction and substantial rehabilitation under a cost-plus form of construction contract, the Administration shall require the sponsor and contractor to submit, upon completion of the project, a certification of project costs prepared by an independent accountant.
C. Permanent Mortgage Closing. A closing shall be arranged after construction completion and cost certification according to procedures and documentation as may be required by the Administration.