Beginning July 1, 2023, Shared Appreciation Agreements will be subject to the Maryland Mortgage Lender Law.

The Commissioner of Financial Regulation recently issued interim guidance for lenders seeking to comply with the new law while the Commissioner of Financial Regulation works to issue regulations.

According to the guidance, SAA are mortgage loans and those offering SAAs to Maryland consumers are required to obtain a Maryland Mortgage Lender license unless exempt from licensure under Maryland’s Mortgage Lender Law. While the Commissioner may impose penalties for violations of Maryland law, in recognition of the previous uncertainty surrounding the classification of SAAs, lenders who previously offered SAAs but did not have a license to do so will not face enforcement action from the Commissioner solely for their failure to hold a license, provided the lender:

• Applies for a license by July 1, 2023, and
• Takes no further SAA applications from Maryland consumers until a license is obtained.

You can review the entire interim guidance here.