Md. Code Regs. 05.04.11.14

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

Section 05.04.11.14 - Loan Procedures-Construction or Rehabilitation

A. Construction Period Disbursements. If the loan finances construction or rehabilitation, the Administration shall:

(1) Conduct on-site inspections of the construction;

(2) Make construction loan disbursements on the basis of work-in-place, plus materials acceptably stored on-site, less a retention of up to 10 percent of the construction request; and

(3) Make disbursement for materials acceptably stored off-site, if the materials are:

(a) In a bonded warehouse;

(b) Set aside and labeled with the project's name;

(c) Inspected by the Administration's inspector;

(d) Insured with the Administration as a named insured; and

(e) Documented by evidence of payment for the materials.

B. Cost Certification. For loans financing new construction and substantial rehabilitation under a cost-plus form of construction contract, the Administration shall require the sponsor and contractor to submit, upon completion of the project, a certification of project costs prepared by an independent accountant.

C. Permanent Mortgage Closing. A closing shall be arranged after construction completion and cost certification according to procedures and documentation as may be required by the Administration.

Md. Code Regs. 05.04.11.14

Regulation .14 repealed, effective November 20, 1995 (22:23 Md. R. 1799)