Md. Code Regs. 05.03.01.12

Current through Register Vol. 51, No. 26, December 27, 2024

Section 05.03.01.12 - Property Insurance Required

A. Hazard Insurance. The borrower shall maintain fire and extended coverage insurance at the borrower's expense in an amount equal to the lesser of the:

(1) Replacement value of the improvements, as determined by the appraisal required under this chapter; or

(2) Sum of the loan, plus any superior mortgage lien permitted by the Program.

B. Flood Insurance. If the property is located in an area designated by either the Director of the Federal Emergency Management Agency or the Secretary of the Department of Housing and Urban Development as having special flood hazards, and for which flood insurance is available, the eligible residence shall be covered by a flood insurance policy in an amount equal to the lesser of the:

(1) Maximum amount of insurance available; or

(2) Amount of the loan.

C. Terms and Conditions.

(1) An insurance policy shall meet the minimum requirements in §C(2), below, plus any additional requirements which may be set by the Department.

(2) An insurance policy shall:

(a) Be written by a company:

(i) Acceptable to the Department, and

(ii) Which is reputable and financially sound, as determined by the Department;

(b) Be in force upon the closing of the loan;

(c) Contain a standard mortgagee endorsement attached to or printed in the policy naming the Department as mortgagee;

(d) Provide for notification to the Department before termination; and

(e) Contain terms and coverage satisfactory to the Department.

Md. Code Regs. 05.03.01.12

Regulations .12 amended effective September 1, 1974 (1:2 Md. R. 112)
Regulations .12 amended effective July 23, 1975 (2:16 Md. R. 1138)
Regulations .12 under a new chapter, Preferred Interest Rate Loan Program, adopted effective July 22, 1991 (18:14 Md. R. 1609)
Regulation .12 amended effective February 1, 1993 (20:2 Md. R. 110)