§ 4-1811. Requirements on event of transfer

   (a) Requirement that rental units remain affordable. -- Rental units developed under this subtitle shall remain affordable as workforce housing for a period of at least 25 years.

(b) Requirements on transfer by initial buyer -- In general. -- If an original buyer of a homeownership workforce housing unit developed through the Program transfers title to the unit at any time, the original buyer shall pay to the Department 100% of the combined amount of Program funds and qualifying local government matching funds used to develop the unit.

(c) Requirements on transfer by initial buyer -- Transfers within certain time periods. -- If an original buyer of a homeownership workforce housing unit developed through the Program transfers title to the unit:

   (1) within 5 years of the date of purchase, the original buyer shall pay the lesser of 20% of the net proceeds of transfer to the Department or a 5% annual return on the Program funds provided for the unit;

   (2) during the period that is more than 5 years but less than 15 years from the date of purchase, the original buyer shall pay to the Department the lesser of a percentage of the net proceeds of transfer that begins at 20% and declines by 2% for each subsequent year of ownership or a 5% annual return on the Program funds provided for the unit; and

   (3) during the period that is 15 years or more from the date of purchase, the original buyer is not required to pay any portion of the net proceeds of transfer to the Department.

(d) Distribution of funds paid by initial buyer-transferors. -- The Department shall distribute to the qualifying local government:

   (1) of the funds paid by the original buyer to the Department under subsection (b) of this section, an amount equal to the matching funds provided by the qualifying local government for the homeownership workforce housing unit; and

   (2) of the funds paid by the original buyer to the Department under subsection (c) of this section, a proportionate share based on the amount of matching funds provided by the qualifying local government for the homeownership workforce housing unit.

(e) Use of funds. -- The Department and the qualifying local governments shall use the funds received under this section to develop workforce housing under the Program.

(f) Required disclosures to initial buyers in contract of sale. -- The contract of sale to the original buyer shall disclose all the requirements for repayment to the Department under this section in the event of a transfer of title, including the combined amount of Program funds and qualifying local government matching funds.

(g) Recorded lien. --

   (1) The amounts owed to the Department in the event of a transfer of title of a homeownership workforce housing unit under this section shall be secured by a recorded lien on the homeownership workforce housing unit.

   (2) The lien created under this subsection may be a subordinate lien.

   (3) The Department may charge a fee for servicing a lien created under this subsection.

HISTORY: 2006, ch. 483; 2007, ch. 603.