Sec. 05.04.12.08. Application and Processing Procedures

A. Loan Application.

(1) A loan application shall be made upon standard forms prescribed by the Administration.

(2) Each application shall be fully completed and properly executed and be accompanied by the following items:

(a) A copy of the articles of incorporation, bylaws, and most recent financial statements of the sponsor, if the sponsor is a nonprofit organization, or a letter of designation from the chief executive officer of the locality to carry out the project, if the sponsor is a local government;

(b) A copy of:

(i) The deed to the property,

(ii) A contract or option agreement to purchase the property, or

(iii) An agreement of understanding or letter of intent to purchase the property;

(c) Photographs of the site and any existing buildings; and

(d) Sufficient information and documentation to determine the extent, if any, to which the project will change the type of use or increase the intensity of the existing use of the property.

(3) In the case of a land bank loan, the sponsor shall furnish the following:

(a) A preliminary description of the sponsor's plans for the development of the land;

(b) An explanation of the sponsor's housing development experience and current activity which demonstrates the sponsor's capacity to develop the land for occupancy by families of limited or very limited income; and

(c) Identification of how the land is presently zoned.

B. Feasibility Notification. Upon receipt of all documentation necessary to determine the feasibility of a project and the primary loan structure and terms, the Administration shall issue a written notification letter to the sponsor. The feasibility notification letter shall outline anticipated loan terms and shall specify any additional documentation which shall be provided or other conditions which shall be met in order for the Administration to recommend a loan for commitment, including:

(1) Plans and specifications or a detailed scope of work for the rehabilitation or construction of the project. The Administration shall review the plans and specifications or a detailed scope of work to ensure compliance with applicable codes and standards.

(2) A copy of the contract for the work. The Administration shall review the contract to determine if the contract and the licensed contractor are acceptable to the Administration.

(3) Evidence of zoning compliance.

(4) A resolution from the local government authorizing the construction or rehabilitation of the project.

(5) If the project is to be newly constructed, a soil test of the land upon which the project is to be constructed.

(6) A copy of a commitment or letter of intent to provide permanent financing which, at a minimum, shall state the amount, rate, and terms of the permanent financing.

(7) A schedule of proposed sales prices or rents.

(8) A plan to market the units to families of limited income and, if applicable, to families of very limited income.

(9) A relocation plan, if the loan is for rehabilitation of occupied residential units.

C. Approval.

(1) Upon satisfaction of all the requirements and conditions of the feasibility notification letter, the Administration shall undertake an analysis of each application as to the final recommended loan amount, structure, and terms.

(2) Except in the case of an emergency when urgent action is required, all loans above a minimum amount, determined by the Housing Finance Review Committee established pursuant to Housing and Community Development Article, §4-208, Annotated Code of Maryland, shall be submitted by the Administration to the Committee for review and recommendation to the Secretary for approval or disapproval of a loan and the terms of the loan. At the discretion of the Director, loans in an amount below the minimum amount established by the Housing Finance Review Committee need not be submitted to the Committee for review and recommendation. The Secretary, in accordance with Regulation .11B, may delegate the review and approval of these loans.

(3) Before the issuance of any commitment letter obligating the Administration to provide a loan, regardless of the loan amount, the Secretary shall execute a determination that the loan is a community development project authorized by the Act. The execution of a determination by the Secretary shall constitute an approval of the loan and authorize the issuance of a commitment letter obligating the Administration to provide the loan. In an emergency when urgent action is required, the Secretary may execute a determination approving a loan for a project without the recommendation of the Housing Finance Review Committee.

D. Commitment Letter. Upon the issuance of a Secretarial determination approving a loan, the Director or Program Director is authorized to issue a commitment letter setting forth the amount of the loan, the interest rate on the loan, and the other terms and conditions under which it will be made.

E. Expiration of Commitment. For any loan approved by the Secretary, the Administration shall specify in the commitment letter a time limit within which the sponsor shall execute the documents evidencing the loan, which time limit may be extended in the Administration's sole discretion. If execution of the documentation by the sponsor does not occur within the time limit specified by the Administration, the commitment shall expire and the Administration may withdraw the moneys encumbered for the project and use them for any other project authorized by the Act.

F. Rejection of Applications. If the Administration determines that a project or sponsor is not eligible for a loan, the Administration shall issue a written notice of the determination of ineligibility. The Administration shall provide the Housing Finance Review Committee with a report listing all loan applications rejected during the month preceding each Housing Finance Review Committee meeting.

G. Reconsideration. Sponsors may request reconsideration of a rejection in accordance with the procedures contained in the program guidelines. An initial decision or reconsideration of a decision is not a contested case within the meaning of the Administrative Procedure Act or COMAR 05.01.01.

H. Loan Closing. The loan closing shall be scheduled at a time acceptable to the sponsor, the Administration and the office of the Assistant Attorney General, or its designee.

I. Release. Upon repayment in full of the loan, the Administration shall release its mortgage. Partial releases shall be made for single family properties as units are sold and proportionate amounts of the loan repaid.