Md. Code Regs. 24.05.07.08

Current through Register Vol. 52, No. 1, January 10, 2025

Section 24.05.07.08 - Guarantied Loan Application and Processing Procedures

A. Loan Application.

(1) Guarantied loan applications shall be made upon standard forms prescribed by the Authority.

(2) Each application shall include the following documentation:

(a) A fully completed and properly executed application, executed by the lender and the applicant;

(b) A copy of a letter evidencing that the applicant has applied for and been denied a loan for the same amount or a lesser amount of money and having similar terms by a financial institution; or

(c) An executed copy of the lender's commitment letter that provides a commitment of financing contingent upon the Authority's approval of a guaranty of the lender's loan.

B. Processing of Application.

(1) After execution of the application, the lender shall submit it to the Authority along with a copy of a commitment letter from the lender to provide financing which, at the minimum, shall state the amount, rate, and terms of the financing.

(2) To make a determination of the eligibility of the applicant and the contract in accordance with Regulations .03B(4) and .04 of this chapter, the Authority's staff shall perform an initial review of each application and may also perform a preliminary audit investigation of the applicant's books and records.

C. Loan Approval. Approval of a loan guaranty shall be evidenced by a signed resolution of the Authority.

D. Loan Documents. The guarantied loan documents may include:

(1) Promissory notes;

(2) Deeds of trust;

(3) Loan and security agreements;

(4) Financing statements;

(5) Personal and corporate guarantee agreements;

(6) A guaranty agreement;

(7) Assignments of contracts and notices of assignment;

(8) Assignment of life insurance; and

(9) Other documents the Authority may require.

E. Fees. As a precondition to the effectiveness of the guaranty, the Authority shall receive in advance a guaranty fee of 1 percent of the outstanding principal amount of the guarantied loan from the lender.

Md. Code Regs. 24.05.07.08

Regulation .08A amended effective August 3, 1992 (19:15 Md. R. 1394)