Md. Code Regs. 24.05.04.08

Current through Register Vol. 51, No. 24, December 2, 2024

Section 24.05.04.08 - Insurance Premium

A. Payment of Premium. The Authority shall receive from the lender the first year's insurance premium at closing and after that on each anniversary of the closing date in advance. The Authority may also require the lender or the applicant to reimburse the Authority for expenses it incurs in processing and closing the loan, such as credit reports and appraisals.

B. Computation of Premium. Except as provided in §C of this regulation, the insurance premium shall be calculated as the greater of:

(1) 1/2 of 1 percent of the outstanding insured principal balance for a term loan, and 1/2 of 1 percent of the maximum insured amount for a line of credit; or

(2) $500.

C. Determination of Rate. In accordance with the Act, the insurance premium need not be uniform among transactions, and in determining the rate of the insurance premium, the Authority may consider the following factors:

(1) Any other fees charged by the Authority or the lender;

(2) The amount of the loan or the amount of the insurance;

(3) The economic impact caused by the loan; and

(4) Any other factor that the Authority considers relevant.

D. Waiver of Insurance Premiums. The Authority may not charge any premium for insurance if the Authority determines that, at the time of approval of insurance, the facility or business with respect to which insurance is provided is located in a county where the average unemployment rate is at least 1 percent greater than the average unemployment rate for the United States.

E. Standards for Unemployment Rates. Average unemployment rates shall be established by the Department or any other agency or department responsible for establishing the rates. Average unemployment rates for the United States shall be those established by the United States Department of Labor or any other agency or department responsible for establishing the rates.

F. Review of Rates. The Authority shall annually review the rates based on statistics covering the preceding calendar year and shall only consider annual unemployment rates established not more than 12 months before the date of the Authority's review. The imposition or waiver of the insurance premium shall remain in effect as long as the Authority's insurance is in force.

Md. Code Regs. 24.05.04.08