1516

LAWS OF MARYLAND

Ch. 487

257L.

(b) (8) "Fund" means the [net proceeds of State bonds
designated for the purpose of this section] SPECIAL FUND
ESTABLISHED UNDER § 257L(G)

(c) (6) LOANS MAY NOT EXCEED AN AMOUNT THE SECRETARY
SHALL ESTABLISH BY REGULATION AND THEY MAY NOT BE MADE WHERE
COMPARABLE PRIVATE FINANCING IS AVAILABLE TO THE PROSPECTIVE
BORROWERS. LOANS OVER $3,500 SHALL BE SECURED BY A RECORDED
MORTGAGE ON THE PROPERTY. Loans shall be made from the fund
to families of limited income owning and occupying the
building to be rehabilitated, or to sponsors. Loans may be
either insured or uninsured as the Department requires, and
shall be at a rate of interest [at least equal to the rate
of interest paid by the State on the bonds issued to
establish the fund plus an amount calculated to cover
administrative costs incurred by the Department for the
program, and losses resulting from defaults on loans. Loans
may not exceed an amount the Secretary shall establish by
regulation and they may not be made where comparable private
financing is available to the prospective borrowers. Loans
over $3,500 shall be secured by a recorded mortgage on the
property.] THAT IS:

(I)  AT LEAST SUFFICIENT TO COVER:

1.  ALL ADMINISTRATIVE AND OTHER
EXPENSES OF THE PROGRAM;

2.  REASONABLY EXPECTED LOSSES DUE TO
DEFAULTS ON LOANS; AND

3.  THE INTEREST COST OF MONEYS USED
TO FUND THE PROGRAM, WHICH MAY BE THE ACTUAL INTEREST COST
OF MONEYS BORROWED BY THE STATE AND APPROPRIATED TO THE
PROGRAM, OR THE IMPUTED INTEREST COST OF GENERAL FUNDS OR
LOAN REPAYMENTS APPROPRIATED TO THE PROGRAM; AND

(II)  NOT LESS THAN A RATE THAT IS 5
PERCENTAGE POINTS BELOW THE PREVAILING RATE ON COMPARABLE
LOANS MADE BY PRIVATE LENDERS AS DETERMINED BY THE
DEPARTMENT, UNLESS THE DEPARTMENT ALSO DETERMINES THAT THE
PREVAILING RATE IS SO HIGH THAT THIS CONDITION IS NOT
COMPATIBLE WITH BOTH PRUDENT LOAN UNDERWRITING STANDARDS AND
WITH THE INCOME LIMITS ESTABLISHED UNDER § 257L(B)(4) OF
THIS SUBTITLE.

(G) (1) THE PROGRAM SHALL OPERATE AS A CONTINUING,
NONLAPSING, SPECIAL FUND, THAT CONSISTS OF MONEYS
APPROPRIATED BY THE STATE TO THE PROGRAM.

(2) THE DEPARTMENT SHALL USE THE FUND TO MAKE
LOANS AND TO PAY EXPENSES OF THE PROGRAM, AS PROVIDED IN THE
ANNUAL BUDGET OF THE STATE OR OTHER ACT APPROPRIATING
MONEYS.