172/Maryland Manual

chases loans made by lending institutions to eligi-
ble low and moderate-income persons.

The Mortgage Purchase Program is funded by
the sale of tax-exempt revenue bonds. Both the
acquisition cost and income limits are set by
CDA using the guidelines of the Mortgage Subsi-
dy Bond Tax Act of 1980. Acquisition costs vary
by region.

Recently, federal law designated targeted, gen-
erally low-income areas for which 20 percent of
the funds from bond issues must be set aside. In
these areas, purchase price limits are slightly
higher and buyers are not required to be first-
time home buyers.

Both newly constructed and existing homes are
eligible under the Mortgage Purchase Program.
MPP is designed primarily for first-time home
buyers. Applications for loans are made to a par-
ticipating mortgage lender.

MULTI-FAMILY PROGRAM

The Multi-Family Program began in 1974. It
makes three types of financing available to non-
profit and limited dividend developers of multi-
family rental housing: construction loans, perma-
nent financing, and combined permanent financ-
ing and construction loans.

Financing of multi-family housing develop-
ments is provided through the sale of tax-exempt
revenue bonds and construction loan notes. The
multi-family developments are targeted for fami-
lies and elderly persons with limited incomes. In
addition to tax-exempt financing through the
State, developments financed under this program
receive rent subsidies under the federal govern-
ment's Section 8 Program.

The Multi-Family Program accounts for rough-
ly 60 percent of the housing financed by CDA.

REHABILITATION PROGRAMS

The Maryland Housing Rehabilitation Program
(MHRP) is designed to preserve the State's stock
of existing housing by making direct, low-interest
loans available to limited-income homeowners for
use in repair and renovation. MHRP also makes
direct loans available to the owners of apartment
buildings of up to twenty units and commercial
properties. Under the requirements of the pro-
gram, recipients of loans for the renovation of
rental properties must make at least two-thirds of
the units available to low-income tenants.

MHRP was authorized by the General Assem-
bly in 1975. It is funded by State General Obliga-
tion Bonds.

In 1982, the Residential Energy Conservation
Program was added to the rehabilitation pro-
grams of the Community Development Adminis-
tration. Funded with $1 million in CDA funds,
the Residential Energy Conservation Program
makes reduced interest loans for energy conserva-
tion improvements in single-family homes and
rental apartment buildings. This is the first CDA
program to have no income limits. It is available
to anyone in the State. The program represents
CDA's continuing efforts to work with the pri-
vate sector. The program will be expanded using
the proceeds of revenue bond sales.

CDA is the administering agency for federal
funds which subsidize rental housing under the
Section 8 Existing Program and the Moderate
Rehabilitation Program. These funds are provided
to the State through the U. S. Department of
Housing and Urban Development under the Fed-
eral Housing Act of 1937 (42 USC 1437)
amended.

Under the Section 8 Existing Program, partici-
pating landlords make rental housing, which
meets occupancy standards, available to low-in-
come families. To qualify, total family income
must be 80 percent or less of the median income
for the area in which the housing is located. As
an administering local agency, CDA accepts and
reviews applications from prospective tenants for
participation in the program. Families that quali-
fy are issued Certificates of Family Participation.

Owners, who agree to rent to these families,
sign a contract with CDA or the administering
local agency that guarantees payments to the
owner as long as the housing and lease adhere to
federal standards. The U. S. Department of
Housing and Urban Development, through CDA,
subsidizes that part of the rent which exceeds 25
percent of the family's total income. Individual
applicants must find their own housing. In this
way, families may select neighborhoods that best
suit their needs.

Other than the elderly, disabled, or handi-
capped, the only single persons automatically eli-
gible for the Section 8 Existing Program are those
displaced from their previous housing by govern-
mental actions, or those who are the remaining
member of a tenant family.

Gross rent, that is, the contract rent received
by an owner plus a utilities allowance supplied by
the tenant, cannot exceed the HUD determined
and published "Fair Market Rent" for the area.
HUD decides the fair market rent by comparing
area housing and determining that contract rent