WILLIAM DONALD SCHAEFER, Governor Ch. 220

(5)  ESTABLISH GUIDELINES TO DETERMINE THE CAPACITY OF
THE GROUP HOME SPONSOR TO MANAGE THE GROUP HOME, PROVIDE
NECESSARY SERVICES, AND REPAY THE LOAN; AND

(6)  ADOPT RULES AND REGULATIONS TO CARRY OUT THE
PROGRAM IN CONFORMANCE WITH STATUTORY REQUIREMENTS.

2-705.

(A)  LOANS UNDER THE PROGRAM SHALL BE SECURED BY A MORTGAGE
LIEN AND MAY INCLUDE SUCH TERMS AS THE DEPARTMENT DEEMS NECESSARY
TO MAKE THE GROUP HOME AFFORDABLE TO PERSONS OF LOWER INCOME,
INCLUDING, IN EXCEPTIONAL CIRCUMSTANCES, DEFERRED PAYMENT OF
PRINCIPAL AND INTEREST AND INTEREST RATES AS LOW AS ZERO PERCENT.

(B)  EACH LOAN SHALL CONTAIN TERMS REQUIRING REPAYMENT OF
ALL UNPAID PRINCIPAL AND ACCRUED INTEREST, WHICH MAY HAVE BEEN
DEFERRED, AT THE FIRST TO OCCUR OF:

(1)  A STATED DATE WHICH MAY BE THE MATURITY DATE OF
THE LOAN;

(2)  THE DATE OF ANY SALE OR OTHER TRANSFER OF THE
GROUP HOME OR A CONTROLLING INTEREST IN THE GROUP HOME; OR

(3)  DISCONTINUANCE OF USE AS A GROUP HOME.

(C)  (1) EACH LOAN SHALL PROVIDE FOR:

(I)  A LIMIT ON THE RETURN ON EQUITY ALLOWED TO
A GROUP HOME SPONSOR;

(II)  SOME FORM OF EQUITY PARTICIPATION BETWEEN
THE DEPARTMENT AND THE GROUP HOME SPONSOR; OR

(III)  ACCRUED AND DEFERRED INTEREST IN AN
AMOUNT WHICH, IN THE DETERMINATION OF THE DEPARTMENT, CAN
REASONABLY BE EXPECTED TO BE REPAID FROM ANY PROFIT RESULTING
FROM THE SALE OF THE GROUP HOME.

(2)  IN THE EVENT ACCRUED AND DEFERRED INTEREST UNDER
PARAGRAPH (1)(III) OF THIS SUBSECTION EXCEEDS THE PROFIT FROM THE
SALE OF THE GROUP HOME, THE DEPARTMENT MAY FORGIVE THAT PORTION
OF ACCRUED AND DEFERRED INTEREST WHICH EXCEEDS THE PROFIT FROM
THE SALE OF THE GROUP HOME.

(3)  THE DEPARTMENT MAY PERMIT PAYMENT OF A REASONABLE
RETURN TO THE GROUP HOME SPONSOR BEFORE REPAYMENT OF ANY ACCRUED
AND DEFERRED INTEREST.

(D)  A LOAN MAY BE USED TO FINANCE:

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