
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC12808]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                CHAPTER 130--NATIONAL AFFORDABLE HOUSING
 
             SUBCHAPTER II--INVESTMENT IN AFFORDABLE HOUSING
 
                    Part D--Specified Model Programs
 
Sec. 12808. Second mortgage assistance for first-time homebuyers


(a) In general

    The Secretary shall make available a model program under which units 
of general local government provide loans (secured by second mortgages) 
with deferred payment of interest and principal to first-time 
homebuyers.

(b) Homeownership counseling

    The program under this section shall provide for homeownership 
counseling to first-time homebuyers assisted, which shall include--
        (1) counseling before and after purchase of the property;
        (2) assisting first-time homebuyers in identifying the most 
    suitable and affordable properties;
        (3) providing homebuyers with financial management assistance;
        (4) assisting homebuyers in understanding mortgage transactions 
    and home sales contracts; and
        (5) assisting homebuyers with eliminating any credit problems 
    that may prevent the homebuyers from purchasing the property.

(c) Eligibility requirements

    Deferred payment loans secured by second mortgages may be provided 
under the model program under this section if--
        (1) the homebuyer assisted is a first-time homebuyer;
        (2) the property secured by the second mortgage is a single-
    family residence and is the principal residence of the homebuyer; 
    and
        (3) the principal obligation of the deferred payment loan 
    secured by a second mortgage does not exceed 30 percent of the 
    acquisition price of the residence to the homebuyer.

(d) Payment terms

                       (1) Period of deferral

        The payment of any principal and interest on a loan under this 
    section shall be deferred for not less than the 5-year period 
    beginning on the date of the acquisition of the residence by the 
    homebuyer.

                          (2) Interest rate

        The interest rate on the unpaid balance of a loan under this 
    section shall be at least 4 percent.

                        (3) Repayment period

        A deferred payment loan secured by a second mortgage shall be 
    repayable over the 15-year period beginning at the end of the 
    deferral period.

(e) Security

    A deferred payment loan assisted with amount \1\ provided under a 
grant under this section shall be secured by a lien on the property 
involved, which lien shall be subordinate to the first mortgage on the 
property.
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    \1\ So in original. Probably should be ``amounts''.
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(Pub. L. 101-625, title II, Sec. 258, Nov. 28, 1990, 104 Stat. 4123.)
