WILLIAM DONALD SCHAEFER, Governor Ch. 596

(d)  Mortgages or deeds of trust held as security for loans
made under this subsection which are in default may be foreclosed
by the Department in the same manner as provided by the Maryland
Rules of Procedure for foreclosures in private transactions. The
Department is authorized to take title in its name to any such
property foreclosed as well as to convey title to such property
to bona fide purchasers thereof.

(e)  The term of the direct loan may not exceed 20 years.

(f)  The applicant for a direct loan to finance a child care
center must agree to operate the child care center for at least
the term of the loan and to repay the outstanding loan in full
upon transfer, sale, or refinancing of the facility prior to the
end of the loan term; and the direct loan documents may provide
for penalties for any applicant who fails to operate the child
care centers for the entire term of the loan.

(g)  The Department may make direct loans to child care
centers whether or not they are located in applicants' homes but
a minimum of a direct loan for a child care facility located in a
home shall be $15,000.

(h) The proceeds of the direct loans may be used for
renovations, construction, or purchase of real property,
fixtures, or equipment related to the child care facility, but
not for refinancing existing loans, working capital, supplies, or
inventory.

(i) (1) [A] EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS
SUBSECTION, A direct loan may not exceed [20] 50 percent of the
total amount of investment for renovations, construction, or
purchase of real property, fixtures, or equipment affixed to the
real estate and required to expand or develop the child care
facility[;].

[(2) The funds put forth by the applicant may not be
less than 80 percent of the total amount of investment needed to
expand or develop the child care facility; and

(3) An applicant may apply for a guarantee from the
Day Care Facilities Loan Guarantee Fund if:

(i) The applicant meets the requirements
specified in paragraphs (1) and (2) of this subsection; and

(ii) The applicant meets the requirements
specified in Subtitle 2 of this article.]

(2) AN APPLICANT FOR A DIRECT LOAN UNDER THIS
SUBTITLE WHO IS ALSO RECEIVING A LOAN GUARANTEED BY THE DAY CARE
FACILITIES LOAN GUARANTEE FUND UNDER SUBTITLE 2 OF THIS TITLE
SHALL BE LIMITED TO A DIRECT LOAN OF NOT MORE THAN 20 PERCENT OF

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