Md. Code Regs. 05.05.01.03 - Definitions

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) "Administration" means the Community Development Administration, an agency in the Division of Development Finance of the Department.

(2) "Annual income" means annual income as defined by the United States Department of Housing and Urban Development at 24 CFR § 5.609, as amended.

(3) "Applicable codes and standards" means:

(a) The applicable construction, health, safety, fire, occupancy, and other codes and standards in force in the political subdivision in which a project is located; or

(b) If the codes and standards under §B(3)(a) of this regulation do not exist or are determined by the Secretary to be insufficient to promote the purposes of the Housing and Community Development Article, Annotated Code of Maryland, then the codes and standards prescribed in COMAR 05.02.01.

(4) "Applicant" means a person, partnership, corporation, or other entity applying for a loan under the program.

(5) "Bridge loan" means an interim loan used during the rehabilitation of a project and repaid with cash proceeds realized from a syndicated sale of the project or with the proceeds of permanent loans from other sources.

(6) "Capital assistance loan" means a loan to a sponsor to finance all or a portion of a project's development costs.

(7) "Closing costs" means:

(a) Financing costs such as a credit report fee, title examination, loan origination fee, title insurance fee, application fee, survey fee, recording fees, State and local transfer taxes, and recording taxes;

(b) Prepaid expenses such as property taxes, ground rent, and any mortgage insurance premiums to be paid at closing; and

(c) Other costs incidental to the closing of a loan and acceptable to the Department.

(8) "County" means a county of the State or Baltimore City.

(9) Department.

(a) "Department" means the Department of Housing and Community Development, a principal department of the State.

(b) "Department" includes the Administration.

(10) "Development costs" means costs incurred to acquire, construct, or rehabilitate a project, as approved by the Department, including:

(a) Necessary studies, surveys, plans, and specifications;

(b) Reasonable fees for architectural, engineering, legal, accounting, or other special services;

(c) Special studies, including:

(i) Appraisals;

(ii) Compaction tests;

(iii) Test borings;

(iv) Market analyses;

(v) Construction cost estimates; and

(vi) Environmental or other special engineering studies;

(d) Acquisition of land and improvements;

(e) Site preparation;

(f) Cost of labor and materials for new construction or rehabilitation, ancillary demolition, lot consolidation, and installation of improvements as set forth in approved plans and specifications;

(g) Acquisition of necessary machinery, equipment, and furnishings installed at the project, including household appliances normally supplied to tenants in the rental market;

(h) Initial occupancy expenses of the project including marketing and advertising costs;

(i) Indemnity and surety bonds;

(j) Premiums on hazard and liability insurance;

(k) Relocation expenses;

(l) Closing costs;

(m) Program administrative expenses; and

(n) Other costs and fees acceptable to the Department.

(11) "Development team" means the applicant, the sponsor, the developer or co-developer, the guarantors, and the owner, including general partners or managing members, but not including limited partners and nonmanaging members of the foregoing, and architects, general contractors, management agents, and consultants affiliated with the project and any officer, director, or principal of any of the foregoing.

(12) "Director" means the Director of the Division of Development Finance of the Department.

(13) "Elderly household" means one or more individuals who occupy a residential dwelling unit, at least one of whom is:

(a) 62 years old or older; or

(b) Physically handicapped and would qualify as an elderly person under a federal housing program.

(14) "Equity" means the difference between the total project costs and the aggregate amount of indebtedness of the project, whether secured by the project or otherwise, from all sources including the program, all as determined by the Department.

(15) Family of Limited Income.

(a) "Family of limited income" means a household whose annual income does not exceed the upper income limits established from time to time by the Secretary in accordance with Housing and Community Development Article, § 4-212, Annotated Code of Maryland, and Regulation .11 of this chapter.

(b) "Family of limited income" includes low income elderly households under Housing and Community Development Article, §§ 4-403 and 4-404, Annotated Code of Maryland.

(16) "Family of lower income" means a household whose annual income does not exceed the income limits, established from time to time by the Secretary in accordance with Housing and Community Development Article, § 4-1501(c), Annotated Code of Maryland, and Regulation .11 of this chapter, which shall be less than those established for a family of limited income. Each family of lower income is automatically a family of limited income.

(17) "Fund" means the Rental Housing Programs Fund established under Housing and Community Development Article, § 4-504, Annotated Code of Maryland, which is a nonlapsing special fund consisting of all moneys appropriated or otherwise available and allocated to the programs and other programs of the Department.

(18) Household.

(a) "Household" means an individual or a group of individuals who occupy a dwelling as their permanent residence.

(b) "Household" includes a family as defined in 24 CFR § 5.403, as amended.

(19) "Housing Finance Review Committee (HFRC)" means the Housing Finance Review Committee established under Housing and Community Development Article, § 4-208, Annotated Code of Maryland.

(20) "Income-restricted project" means the acquisition, construction, rehabilitation, or operation of land and improvements that will be rented and occupied entirely by individuals who qualify as families of lower income or families of limited income.

(21) "Internal Revenue Code" means the Internal Revenue Code, Title 26 of the United States Code, as amended.

(22) "Limited equity cooperative housing" means limited equity cooperative housing as defined in §143(K)(9)(C) of the Internal Revenue Code and the regulations adopted under it.

(23) "Loan" means a loan made by the Department from the Fund under the Housing and Community Development Article, Annotated Code of Maryland, and this chapter.

(24) "Loan documents" means those documents required by the Department to evidence or secure the loan or enforce the requirements of the Housing and Community Development Article, Annotated Code of Maryland, or this chapter.

(25) "Local contribution" means a contribution by the political subdivision in which a proposed project is located as provided in Regulation .07 of this chapter.

(26) "Lot consolidation" means acquisition of real property adjacent to and to be included in a project.

(27) Nonprofit Organization.

(a) "Nonprofit organization" means a corporation, foundation, or other legal entity, no part of the net earnings of which inures to the benefit of a private shareholder or individual holding an interest in the entity.

(b) "Nonprofit organization" includes a qualified nonprofit organization as defined in §42(h)(5)(C) of the Internal Revenue Code.

(28) "Nonprofit sponsor" means a sponsor that is a:

(a) Nonprofit organization;

(b) Limited partnership if:

(i) Each general partner is a nonprofit organization or a wholly owned subsidiary of a nonprofit organization;

(ii) The limited partnership is formed to undertake a project that is eligible as a whole, or in part, for a federal program or incentive, including low-income housing tax credits; and

(iii) A nonprofit organization manages the project or will receive the net cash flow or the residual sale proceeds on the sale of the project.

(29) "Office or other commercial space conversion" means the conversion to rental housing of a building that:

(a) Is located in one of the designated neighborhoods established under Housing and Community Development Article, §§ 6-301(b) and 6-305, Annotated Code of Maryland;

(b) Was built more than 30 years before an application is submitted to the Department to finance the conversion;

(c) Consists of at least two floors at or above ground level;

(d) Was last used as office or other commercial space, including any improvements that might otherwise be considered residential rental property but were last used on a transient basis, such as hotels, motels, dormitories, fraternity and sorority houses, rooming houses, hospitals, nursing homes, sanitariums, rest homes, assisted living facilities, and transient trailer parks and courts.

(30) Office and Commercial Space Conversion Project.

(a) "Office and commercial space conversion project" means the acquisition or rehabilitation, or both, of land and improvements for office or other commercial space conversion.

(b) "Office and commercial space conversion project" includes a project that is part of a larger undertaking that may include nonresidential uses.

(31) "Operating assistance loan" means a loan to a sponsor to pay some or all of the operating costs of a completed project, and may include principal and interest payments on a superior mortgage.

(32) "Operating expenses" means the costs incurred by a sponsor necessary to maintain or operate the project, including real estate taxes but excluding reserve for replacement deposits and debt service payments.

(33) "Political subdivision" means a county or municipal corporation of the State.

(34) "Program" or "Programs" means one or more of the following:

(a) The Elderly Rental Housing Program, established under Housing and Community Development Article, Title 4, Subtitle 4, Annotated Code of Maryland;

(b) The Rental Housing Production Program established under Housing and Community Development Article, Title 4, Subtitle 15, Annotated Code of Maryland.

(35) "Program Director" means the Director of Multifamily Housing in the Division of Development Finance of the Department.

(36) Project.

(a) "Project" means the acquisition, construction, rehabilitation, or operation of buildings and improvements.

(b) "Project" includes income-restricted projects and office and commercial space conversion projects.

(37) "Relocation expenses" means compensation given to tenants displaced either temporarily or permanently by the acquisition, demolition, or rehabilitation of existing structures in connection with a project.

(38) Residential Use.

(a) "Residential use" means any use which provides permanent or temporary housing.

(b) "Residential use" includes traditional apartments, single room occupancy housing, shared living unit facilities, congregate housing, group housing, and temporary shelters.

(39) "Residual receipts" means any cash remaining at the end of an annual fiscal period for a project after deducting from gross income all:

(a) Sums due under the loan documents and any liens superior to the lien or other liens approved by the Department;

(b) Operating expenses; and

(c) Amounts distributed to a sponsor as a permitted return on equity.

(40) "Scattered site development" means noncontiguous residential units developed and operated under a common plan of ownership and financing.

(41) "Secretary" means the Secretary of Housing and Community Development.

(42) "Shared living unit facility" means a dwelling which will accommodate two or more households when some or all of the living, dining, kitchen, or sanitary facilities are to be shared by the households.

(43) "Single room occupancy" means a shared living unit facility.

(44) Sponsor.

(a) "Sponsor" means all of the following:

(i) A borrower or obligor on a loan made by the Department to finance a project;

(ii) The person or entity principally responsible for the project and loan application before the loan closing;

(iii) Any person or entity who has an ownership interest in, or identity of interest with, a person or entity under §B(44)(a)(i) or (ii) of this regulation; and

(iv) An applicant that develops a project and qualifies under §B(44)(a)(i), (ii), or (iii) of this regulation.

(b) "Sponsor" includes a nonprofit sponsor.

(45) "State" means the State of Maryland.

(46) "Undertaking" means an entire development, which may be a scattered site development, being acquired, constructed, or rehabilitated by a sponsor and being financed as a single development, of which only a portion is financed by the program.

Notes

Md. Code Regs. 05.05.01.03

Regulations .03 adopted effective March 4, 1991 (18:4 Md. R. 446)
Regulations .03 Rental Multifamily Rental Financing Program adopted effective March 13, 2006 (33:5 Md. R. 518)