Sec. 05.06.01.17. Special Programs under Multifamily Reserves

A. Community Development Single-Family Projects Insured Under Multifamily Reserves.

(1) The Secretary has authorized an additional plan for community development projects, financed by the Community Development Administration, consisting of single-family or condominium residential units, when a mortgage for the project has been insured by the Fund under the reserve fund designated for the insurance of mortgages insured by multifamily properties.

(2) The Fund may insure 100 percent of a mortgage loan made by the Community Development Administration for a one-family unit, including a condominium unit. The mortgage shall satisfy all requirements of the Fund's single-family regulations under COMAR 05.06.06.

(3) The amount of the loan may not exceed the total sale price of the unit, including extras or options selected by the purchasers, but not including prepaid expenses and closing costs. Initial premium fees shall be based on the ratio of the amount of the mortgage to this sale price.

(4) The fee schedule is:

(a) Initial Loan Ratio—80 percent	Initial Premium—0.25 percent
(b) Initial Loan Ratio—90 percent	Initial Premium—0.50 percent
(c) Initial Loan Ratio—95 percent	Initial Premium—0.75 percent
(d) Initial Loan Ratio—100 percent	Initial Premium—1.00 percent
(e) Annual Renewal (CDA can choose renewal Plan A or B).	Plan A—0.25 percent of balance, Plan B—.24 percent of balance for 9 renewals, then 0.125 percent of loan to maturity

(5) The multifamily reserve fund, rather than the revitalization program reserve fund, applies to insurance provided under this regulation, and also to any insurance provided for a single-family community development project before November 9, 1977.

(6) The Fund's single-family regulations under COMAR 05.06.06 govern insurance under this regulation, when not inconsistent with this regulation.

B. Additional Coverage for Bond-Financed Mortgages.

(1) The Fund may provide additional coverage with respect to mortgage loans:

(a) Which are made by a public agency lender;

(b) The principal and interest of which are pledged to the repayment of revenue bonds issued by a public agency;

(c) Which are insured to the extent of 100 percent under the multifamily program; and

(d) Which are secured by a multifamily rental project.

(2) The purpose of the additional coverage is to prevent imminent or prospective default on bonds, issued by a public agency, following a default on an insured mortgage which could result in a loss of revenues which had been expected to be derived from the insured mortgage loan for payment on the bonds. Eligible insureds are the Community Development Administration, upon the terms set forth here, and other public agencies, for which terms may be adopted by agreement in the future.

(3) The additional insurance shall be payable upon a:

(a) Default in the insured mortgage; and

(b) Certification by an authorized officer of the Administration that:

(i) Proceeds of the Fund's claim payment under its standard multifamily coverage shall be used to redeem bonds,

(ii) After the redemption of the bonds as certified in §B(3)(b)(i) of this regulation, the Administration is unable to file a positive statement of projected net revenues, as defined in Regulation .03 of this chapter, for the current and all subsequent bond years, unless additional bonds are redeemed, due to the loss of revenues from the defaulted loan,

(iii) The amount of the additional bonds which need to be redeemed to permit the Administration to file a positive statement of projected net revenues and the amount of money required to redeem these additional bonds, including interest on the additional bonds until they can be redeemed and any premium payable on the redemption and any expenses of the redemption,

(iv) The amount of money then available to the Administration which is not pledged to the repayment of the bonds or to the repayment of any other obligations of the Administration or which, if so pledged, may be withdrawn free of the pledge and expended for any lawful purpose of the Administration, and which is not reasonably required to provide for operating costs, or other obligations and commitments of the Administration, in the current and next subsequent fiscal years.

(4) The amount of the additional insurance claim shall be the lesser of the:

(a) Excess of the amount certified in §B(3)(b)(iii) of this regulation, over the amount certified in §B(3)(b)(iv) of this regulation, or

(b) Sum of:

(i) Interest on the mortgage up to the bond redemption date,

(ii) Any redemption premium payable on any redemption,

(iii) The expenses of the redemption, and

(iv) The amount, if any, by which the unpaid aggregate principal amount of the mortgage loan is less than the allocable unamortized principal amount of the bonds issued to finance the mortgage, or the bonds issued to refinance the bonds which financed the mortgage.

(5) The premium payable by the Community Development Administration to the Fund is an amount whose present value equivalent is 10 percent of the estimated maximum exposure of the Fund for this additional insurance, determined as of the time the bonds are issued. The premium shall be paid in equal annual installments over the term of the bonds issued to finance the insured mortgages, or the term of the bonds issued to refinance the bonds.

(6) The reserves applicable for the additional insurance are the multifamily insurance reserve.