Code of Maryland Regulations › Title 14 - INDEPENDENT AGENCIES › Subtitle 29 - MARYLAND HERITAGE AREAS AUTHORITY › Chapter 14.29.04 - Maryland Heritage Areas Loan Program › Section 14.29.04.06 - Loan Terms and Conditions

Current through Register Vol. 51, No. 14, July 12, 2024
A.
				General Requirements. A loan shall, as necessary and required by the Authority,
				include terms and conditions consistent with this section.
(1) Maximum Loan Amount. A loan may be in an
				amount not to exceed an 80 percent loan to value ratio based on the appraised
				value of the property assisted by the loan, or other property offered as
				collateral for the loan, less any preexisting indebtedness secured by a lien on
				the assisted property or the collateral property.
(2) Interest Rate. The rate of interest
				charged by the Authority against the loan:
(a) Shall be, as established from time to
				time by the Authority, consistent with applicable federal regulations governing
				State borrowing; and
(b) May be
				either lower or higher than rates charged for other loans made by the
				Authority.
(3) Insurance.
				The borrower shall cause the property assisted by the loan or securing the loan
				to be insured against loss or damage by fire and other hazards, casualties, and
				contingencies as may be required from time to time by the Authority in amounts
				satisfactory to the Authority, as described in §B of this
				regulation.
(4) Term. The loan
				shall have a term established by the Authority that is based upon the use and
				amount of the loan.
(5) Repayment.
(a) Except as otherwise provided in
				§A(5)(b) of this regulation, a single monthly payment shall be charged,
				which shall be applied first to late charges, then the Authority's enforcement
				and collection expenses, if applicable, then to interest, and then to
				principal, in that order.
(b) At
				the discretion of the Authority, repayments of either principal or interest, or
				of both principal and interest, may be deferred, subject to the following
				additional requirements:
(i) The loan term
				may provide for deferred payments of either principal or interest, or of both
				principal and interest.
(ii) The
				deferred terms shall provide for repayment of deferred amounts at the loan
				maturity date, any earlier date established by the Authority, or upon any sale
				or other transfer of the property securing the loan.
(c) The Authority may charge interest on
				deferred interest payments.
(6) Late Charge. Late charges may be imposed
				by the Authority, as permitted by law.
(7) Security. The loan shall be secured, at
				the discretion of the Authority, by collateral acceptable to the Authority,
				which may include:
(a) Cash escrow;
(b) A letter of credit;
(c) A pledge of depository
				accounts;
(d) A pledge of accounts
				receivable;
(e) An assignment of
				income;
(f) A security interest in
				machinery and equipment;
(g) A
				mortgage or deed of trust on the real property assisted by the loan;
(h) A mortgage or deed of trust on other real
				property satisfactory to the Authority;
(i) Guarantees of repayment from guarantors
				acceptable to the Authority; or
(j)
				Any other form of security or collateral acceptable to the
				Authority.
(8) Plans and
				Specifications. The plans and specifications for a capital project funded by a
				loan shall be subject to prior review and approval by Authority staff and shall
				conform to applicable acquisition, construction, rehabilitation, and
				restoration requirements established or applied by the Authority.
(9) Disbursement. Disbursement of loan funds
				shall be made as the activity progresses based upon requests for disbursement
				submitted by the borrower in a form satisfactory to the Authority.
(10) Modification of Loan. In order to
				facilitate the successful completion or operation of an activity funded by a
				loan, the Authority may modify:
(a) The rate
				of interest on the loan;
(b) The
				time or amount of payment of principal or interest, or both principal and
				interest;
(c) The maturity date of
				the loan; or
(d) Any other term of
				a loan.
(11) Loan Default.
				In the event of default under the loan documents, the Authority may:
(a) Modify the rate of interest;
(b) Modify the time or amount of payment of
				principal, interest, or both principal and interest;
(c) Modify the maturity date of the
				loan;
(d) Modify the loan in any
				other manner that promotes repayment of the loan and achieves the purposes of
				the Loan Program; and
(e) Exercise
				all remedies provided by law and at equity, or available pursuant to the loan
				documents, including acceleration of payment of the entire principal and
				interest due on the loan, foreclosure, receivership, attachment, and
				repossession of property and collateral securing the loan.
(12) If the Authority obtains title to
				property by taking action under §A(ll)(e) of this regulation, the
				Authority shall obtain approval from the Board of Public Works prior to further
				conveyance of title to the property.
(13) Prepayment Penalty. The Authority may
				not charge a prepayment penalty.
(14) Historic Property. If an activity funded
				by a loan will impact property that is listed or eligible for listing on the
				Maryland Register of Historic Properties, the loan agreement shall provide
				that:
(a) The plans and specifications for
				the project must be reviewed and approved by the Trust prior to the borrower
				undertaking any work on the property;
(b) All aspects of the project must conform
				to historic preservation standards established or applied by the Trust,
				including, but not limited to, the Secretary of the Interior's Standards for
				Treatment of Historic Properties;
(c) The borrower must permit staff from the
				Trust to inspect ongoing construction to ensure that the borrower is
				undertaking the project in conformance with the applicable historic
				preservations standards and requirements; and
(d) If required by the Trust, the borrower
				shall:
(i) Convey or cause to be conveyed to
				the Trust for recording in the applicable land records a deed of easement,
				inform, substance, and duration satisfactory to the Director of the Trust, for
				preservation of the historic real property and the improvements and the
				settings thereon affected by the project; or
(ii) Enter into a preservation agreement with
				the Trust, or cause an agreement with the Trust, that obligates preservation
				and maintenance of the historic property affected by the project, inform,
				substance, and duration satisfactory to the
				Director.
(15)
				Other Requirements. The Authority may establish other terms and conditions in
				the loan documents as considered reasonable and necessary by the
				Authority.