5474

COUNTY LOCAL LAWS

taxes, insurance, maintenance, and utilities).

(c)    Terms of the loan shall be based upon the
owner's financial circumstances at the time of the loan
commitment. If the initial rate of interest is three
percent or less, the interest rate must be increased to a
higher rate upon a determination that twenty—five percent
of the property owner's family gross income is sufficient
to pay the monthly costs of shelter (principal, interest,
taxes, insurance, maintenance, and utilities) at such
higher rate.

The initial interest rate may be decreased upon a
determination that the property owner will pay more than
twenty—five percent of family gross income for the
monthly costs of shelter (principal, interest, taxes,
insurance, maintenance and utilities) and undue financial
hardship would occur if the interest rate remained as
previously established.

(d)     Security for loans made pursuant to this fund
shall be of such a nature as will best protect the
interests of the county at minimum costs and shall be
determined on an individual basis pursuant to regulations
to be established by the county executive.

(e)     Existing mortgages or lien holders whose
mortgages or liens are secured by the existing
improvements must consent to the removal of the existing
improvements. Such mortgages or lien holders shall have
the option to make a reconstruction loan to the applicant
if the parties so desire.

(f)    The interest rate shall be increased to the
market rate if the property is sold except that if the
property is purchased by the Montgomery County Housing
Authority, the interest rate shall be three percent or if
the property is purchased by a person who meets the
eligibility requirements of Section 56—5(a). The
interest rate shall be determined by Section 56-5 (b).

Sec. 4. Section 56—6, title "Administration," of
Chapter 56, title "Urban Renewal and Community
Development," of the Montgomery County Code 1972, as
amended, be and it is hereby repealed and re—enacted,
with amendments, to read as follows:

56—6. Administration.

The homeowners' construction loan fund shall be
administered by the director of the Department of
Community and Economic Development, pursuant to
regulations to be adopted by the county executive.