WILLIAM DONALD SCHAEFER, Governor Ch. 311

upon such terms and conditions as may be determined to make
economically feasible rental housing available for families of
lower income;

(3)  Acquire a rental housing production project or
the land therefor upon completion of the project and thereafter
transfer the project or land to an eligible sponsor;

(4)  Limit the return on equity allowed to sponsors or
enter into equity participation agreements with sponsors; or

(5)  Within the limits established for families of
lower income, establish income ranges and percentages of each
income range to be served by a rental housing production project.

[11-805.] 2-505.

(a)  The Program shall operate as a continuing, nonlapsing,
special fund, that consists of moneys appropriated by the State
to the Program. The Fund shall be called the Rental Housing
Production Fund.

(b)  The Department shall use the Fund to make loans and to
pay expenses of the Program. Upon issuance of a binding
commitment to make a loan, an amount equal to the commitment
shall be transferred from the Fund to the Department.

(c)  The State Treasurer shall hold and the State
Comptroller shall account for the Fund. The Fund shall be
invested and reinvested. Any investment earnings shall be paid
into the Fund. Any repayment of loans from the Fund shall be
paid into the Fund.

[11-806.] 2-506.

(a)  Loans under the Rental Housing Production Program 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 shall be made available for

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