Sec. 05.12.01.11. Terms and Conditions — Distribution of Sales Proceeds/Equity Sharing

A. As a condition to receipt of HOME funds disbursed as loans, a homeowner who receives HOME funds for house acquisition is required to enter into an agreement concerning the distribution of net proceeds upon the sale of the house as described in Regulation .17 §B(1) of this chapter.

B. Recipients of HOME funds to rehabilitate owner-occupied houses and owner-occupied one-to-four unit rental projects may not be required to participate in equity sharing.

C. Sponsors of group home projects which receive HOME funds may be required to enter into equity-sharing agreements as a condition to receipt of the HOME funds if, in the sole discretion of the Department, the HOME-assisted project is expected to have excess residual value. The equity-sharing agreement shall provide for payment of equity to the Department upon sale of the project or discontinuance of use of the project for income-eligible households.

D. Payment under §C of this regulation shall be in an amount equal to the original HOME funds:

(1) Divided by the sum of:

(a) The total original costs of the project, and

(b) Documented capital improvement expenditures for the benefit of the project; and

(2) Multiplied by the:

(a) Net sales proceeds realized upon the sale of the project, or

(b) Imputed equity based on an appraisal if the project discontinues occupancy by income eligible households but is not sold.

E. A sponsor of rental housing development projects which receives HOME funds may be subject to limits on return of equity as a condition to receipt of the HOME funds in accordance with COMAR 05.05.01.10.