Ch. 7

2004 LAWS OF MARYLAND

(5)     The Department shall serve as guarantor provide credit
enhancement of a loan under this subsection for the amount of the loan proceeds that
is over 00% 80% and up to 115% of the expected fair market value of the homo
property after the rehabilitation and, renovation, or onsite replacement is completed,
as determined by an appraisal at the time the loan is closed used to process and
approve the loan.

(6)     (i) The Department shall ensure determine that the terms and
provisions of a loan offered by a financial institution for which the Department serves
as guarantor provides credit enhancement are reasonable and reflective of the
mortgage market.

(ii) The payment of the principal and interest on loan proceeds paid
out from time to time as renovations and rehabilitations are completed may be
deferred until all loan proceeds have been paid out or until 12 months after the first
disbursement of loan proceeds, whichever occurs first.

(iii) The payment of the principal and interest on a loan after all
loan proceeds have been paid out or after 12 months following the first disbursement
of loan proceeds, whichever occurs first, may not be deferred and shall be amortized
over the remaining term of the loan.

(7)     The Department may not charge a premium or administrative fee for
credit enhancement provided under this subsection.

(f) (1) The Department is authorized to establish a buy-down program to
assist families who may not be eligible for assistance from the Department under
subsection (d) of this section.

(2)     Financial assistance provided under the buy-down program shall
reduce the amount a borrower pays on a loan obtained in the private market or from
the Department for a defined period of time by making funds available that
effectively reduce the interest rate or otherwise reduce the amount the borrower is
required to pay.

(3)     The buy-down program may be funded from:
(i) the Special Loan Programs Fund;

(ii) the Homeownership Programs Fund; or

(iii) any other source of funds available to the Department.

(4)     The Department may set the terms and conditions for financial
assistance under the buy-down program.

(5)     The provisions of Article 83B of the Annotated Code of Maryland
concerning eligibility requirements for or conditions or restrictions on the receipt of
financial assistance from the Department, including maximum income limits, do not
apply to financial assistance provided to borrowers under the buy-down program.

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