HARRY HUGHES, Governor

2213

(A)  LOANS UNDER THE RENTAL HOUSING PRODUCTION PROGRAM SHALL
MAY BE SECURED BY A MORTGAGE LIEN, WHICH MAY BE SUBORDINATE TO
OTHER MORTGAGE LIENS, AND MAY INCLUDE SUCH TERMS AS THE
DEPARTMENT DEEMS NECESSARY TO MAKE THE RENTAL HOUSING AFFORDABLE
TO FAMILIES OF LOWER INCOME, INCLUDING DEFERRED PAYMENT OF
PRINCIPAL AND INTEREST AND INTEREST RATES AS LOW AS ZERO PERCENT.

(B)  A LOAN MAY BE USED:

(1)  FOR CAPITAL ASSISTANCE TO FINANCE ALL OR A
PORTION OF THE DEVELOPMENT COSTS OF A RENTAL HOUSING PRODUCTION
PROJECT, IN WHICH CASE THE LOAN SHALL BE SECURED BY A MORTGAGE
LIEN; OR

(2)  FOR OPERATING ASSISTANCE TO REDUCE THE OPERATING
COSTS OF A RENTAL HOUSING PRODUCTION PROJECT BY DEPOSITING THE
LOAN PROCEEDS IN AN INTEREST BEARING ESCROW ACCOUNT SUBJECT TO
THE CONTROL OF THE DEPARTMENT THAT MAY SHALL BE MADE AVAILABLE
FOR PAYING SOME OR ALL OF THE OPERATING COSTS OF A PROJECT
INCLUDING THE PRINCIPAL AND INTEREST WHEN DUE ON ANY PRIOR
MORTGAGE LOAN SECURING THE RENTAL HOUSING PRODUCTION PROJECT.

(C)  THE DEPARTMENT MAY MODIFY THE RATE OF INTEREST, THE
TIME OR AMOUNT OF PAYMENT, OR ANY OTHER TERM OF A LOAN IN ORDER
TO ENSURE REPAYMENT OF THE LOAN AND ACHIEVE THE PURPOSES OF THE
PROGRAM.

266MM-7.

(A)  THE DEPARTMENT SHALL APPROVE APPLICATIONS FOR PROPOSED
RENTAL HOUSING PRODUCTION PROJECTS ONLY IF THE POLITICAL
SUBDIVISION IN WHICH A PROPOSED PROJECT IS SITUATED HAS APPROVED
THE PROJECT AND HAS MADE A CONTRIBUTION TO REDUCE THE DEVELOPMENT
COSTS OR OPERATING COSTS OR OTHERWISE SUPPORT THE PROJECT.

(B)  THE DEPARTMENT SHALL CONSIDER IN APPROVING APPLICATIONS
FOR LOANS:

(1)  THE ECONOMIC FEASIBILITY OF THE PROJECT;

(2)  THE POLITICAL SUBDIVISION'S CONTRIBUTION FOR THE
PROJECT IN RELATION TO THE SUBDIVISION'S ABILITY TO CONTRIBUTE;
AND

(3)  OTHER FACTORS THAT MAY BE RELEVANT.
266MM-8.

BY REGULATION, THE DEPARTMENT MAY ESTABLISH:

(1)  STANDARDS OF ELIGIBILITY FOR SPONSORS;

(2)  LIMITATIONS ON THE RETURN ON INVESTMENT ALLOWED
TO SPONSORS;