ELECTION UNDER THIS SUBSECTION, WOULD BE ALLOWABLE TO THE BUSINESS
ENTITY OR INDIVIDUAL WITH RESPECT TO THE CERTIFIED REHABILITATION.

(4) A BUSINESS ENTITY OR INDIVIDUAL MAY TRANSFER A HISTORIC
REHABILITATION MORTGAGE CREDIT CERTIFICATE TO A LENDING INSTITUTION
SUBJECT TO MARYLAND TAX, INCLUDING A NONDEPOSITORY INSTITUTION, IN
CONNECTION WITH A LOAN:

(I) THAT IS SECURED BY A CERTIFIED HERITAGE STRUCTURE; AND

(II) THE PROCEEDS OF .WHICH MAY NOT BE USED FOR ANY
PURPOSE OTHER THAN THE ACQUISITION OR REHABILITATION OF THE CERTIFIED
HERITAGE STRUCTURE.

(5) A LENDING INSTITUTION THAT ACCEPTS A HISTORIC
REHABILITATION MORTGAGE CREDIT CERTIFICATE FROM A BUSINESS ENTITY OR
INDIVIDUAL SHALL IN EXCHANGE PROVIDE THE BUSINESS ENTITY OR INDIVIDUAL
AN AMOUNT EQUAL TO THE FACE AMOUNT OF THE HISTORIC REHABILITATION
MORTGAGE CREDIT CERTIFICATE, DISCOUNTED BY THE AMOUNT BY WHICH THE
LENDING INSTITUTION'S FEDERAL INCOME TAX LIABILITY IS INCREASED AS A
RESULT OF ITS USE OF THE HISTORIC REHABILITATION MORTGAGE CREDIT
CERTIFICATE TO OFFSET STATE TAXES UNDER THIS SUBSECTION, TO BE APPLIED
ALLOCATED, AT THE BORROWER'S ELECTION:

(I) TO REDUCE THE PRINCIPAL AMOUNT OF THE LOAN, OR TO
REDUCE THE INTEREST RATE ON THE LOAN TO RESULT IN INTEREST PAYMENT
REDUCTIONS SUBSTANTIALLY EQUAL ON A PRESENT VALUE BASIS TO THE FACE
AMOUNT OF THE HISTORIC REHABILITATION MORTGAGE CREDIT CERTIFICATE, AS
DISCOUNTED; OR

(II) TO REDUCE THE BUSINESS ENTITY'S OR INDIVIDUAL'S COST OF
PURCHASING THE CERTIFIED HERITAGE STRUCTURE BY AN AMOUNT EQUAL TO THE
FACE AMOUNT OF THE CERTIFICATE, AS DISCOUNTED.

(6) (I) A LENDING INSTITUTION MAY CLAIM A TAX CREDIT UNDER
THIS SECTION IN AN AMOUNT EQUAL TO THE FACE AMOUNT SPECIFIED IN A
HISTORIC REHABILITATION MORTGAGE CREDIT CERTIFICATE.

(II) IF THE CREDIT ALLOWED UNDER THIS SUBSECTION IN ANY
TAXABLE YEAR EXCEEDS THE TOTAL TAX OTHERWISE PAYABLE BY THE LENDING
INSTITUTION FOR THAT TAXABLE YEAR, THE LENDING INSTITUTION MAY APPLY THE
EXCESS AS A CREDIT FOR SUCCEEDING YEARS UNTIL THE EARLIER OF;

1.  THE FULL AMOUNT OF THE EXCESS IS USED; OR

2. THE EXPIRATION OF THE 10TH TAXABLE YEAR AFTER THE
TAXABLE YEAR IN WHICH THE HISTORIC REHABILITATION MORTGAGE CREDIT
CERTIFICATE IS ISSUED.

(7) IF THE AMOUNT OF THE DISCOUNT RETAINED BY A LENDING
INSTITUTION EXCEEDS THE AMOUNT BY WHICH THE LENDING INSTITUTION'S
FEDERAL INCOME TAX IS INCREASED AS A RESULT OF ITS USE OF THE HISTORIC