MIDFA encourages economic growth by
providing state insurance for industrial
mortgage loans under certain conditions and,
in turn, providing counties and municipali-
ties with a financing tool to make them
competitive with surrounding states in at-
tracting new industry and stimulating the
growth of existing industry. This goal is
achieved without direct subsidy or pledge
of faith or credit by either the state or local
government, except to the extent that the
state has provided a reserve fund of approx-imately
$16,000,000 to support MTDFA
insurance of loans. The fund (called the
Industrial Project Mortgage Insurance
Fund) is comprised of the proceeds of
bonds issued by the State together with in-
surance premiums and other income.
A basic prerequisite for MIDFA partici-
pation is that new jobs and new taxes be
created for Maryland in the process. In its
evaluation, the Authority must place con-
siderable weight on the relative economic
impact of each project for which loan in-
surance is sought This contribution to-
gether with the credit worthiness of the
company and the collateral value of the
land, building, and equipment being fi-
nanced form the major basis for approval
or disapproval by the Authority.
MIDFA may insure all, part or none of
first mortgage loans on land and buildings
unto 90% of their total cost with maturi-
ties of up to 25 years. However, the ma-
turities on insured real estate loans to date
have ranged from ten to twenty years.
MIDFA may also insure all, part or none of
first mortgage loans on machinery and
equipment up to 70% of total cost. with
maturities of up to 15 years or maximum
useful life whichever is less. In either case
up to 100% financing is available.
Mortgage loans insured by MIDFA are
limited in principal amount to $5.000,000
per project. MIDFA has the authority to
insure a total of $60,000,000 in principal
amount of loans or an amount equal to five
times its reserve fund whichever is less.
MIDFA insured mortgage loans may be
made for new, expanded, acquired or re-
habilitated property in the following six |
business categories: manufacturing: ware-
housing of manufactured goods; research
and development facilities; office buildings
for company headquarters or regional office
use; certain tourist facilities and mercantile
and service business categories providing
they serve markets primarily out-of-state
A business may obtain a MIDFA in-
sured loan in one of two ways. First it may
request local government participation in
MIDFA financing, whereby the county or
municipality purchases the property, ob-
tains a tax-exempt mortgage loan from a
lender and then leases the property to the
business, using the lease as additional col-
lateral for the mortgage loan. Secondly, a
business may arrange a mortgage loan di-
rectly with a lender at prevailing commer-
cial loan rates. In either case, the county
or municipality has no direct responsibility
for the repayment of the loan. With local
government participation, tax exempt in-
terest rates are passed on to the industrial
prospect through reduced rentals under the
lease since rental payments are geared to
principal and interest obligations of the loan.
As of the close of fiscal year 1975 there
were 54 MIDFA approved loans totalling
$31,119,981 of which 47 loans were closed
having an outstanding balance of $28,163,-
481 (Code 1957, 1971 Repl. Vol., Art 41,
sees. 266J-266CC).
MARYLAND COMMISSION FOR
LATIN AMERICAN AFFAIRS
Chairman: Roland H. del Mar
Executive Assistant: Mrs. Leo Weintraub
918- 16th Street, N.W.,
Washington, D.C. 20006
Telephone: 202-293-2494
The Governor appointed this Commis-
sion in 1968 at the request of the General
Assembly to initiate and coordinate pro-
grams designed to foster, improve, increase,
and encourage trade, tourism, and cultural
exchanges between the free countries of
Central and South America and the State
of Maryland. The Commission consists of
representatives of business, labor, education,
tourism, and the public at large. The Com-
mission is to explore and study, and report |
