From the U.S. Code Online via GPO Access
[Laws in effect as of January 6, 1999]
[Document not affected by Public Laws enacted between
January 6, 1999 and October 26, 2000]
TITLE 42--THE PUBLIC HEALTH AND WELFARE
CHAPTER 130--NATIONAL AFFORDABLE HOUSING
SUBCHAPTER II--INVESTMENT IN AFFORDABLE HOUSING
Part D--Specified Model Programs
Sec. 258. Second mortgage assistance for first-time homebuyers
- 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.
- Homeownership counseling
The program under this section shall provide for homeownership counseling to first-time homebuyers assisted, which shall include--
- counseling before and after purchase of the property;
- assisting first-time homebuyers in identifying the most suitable and affordable properties;
- providing homebuyers with financial management assistance;
- assisting homebuyers in understanding mortgage transactions and home sales contracts; and
- assisting homebuyers with eliminating any credit problems that may prevent the homebuyers from purchasing the property.
- Eligibility requirements
Deferred payment loans secured by second mortgages may be provided under the model program under this section if--
- the homebuyer assisted is a first-time homebuyer;
- the property secured by the second mortgage is a single-family residence and is the principal residence of the homebuyer; and
- 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.
- Payment terms
- 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.
- Interest rate
The interest rate on the unpaid balance of a loan under this section shall be at least 4 percent.
- 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.
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.
\1\ So in original. Probably should be "amounts''.
(Pub. L. 101-625, title II, Sec. 258, Nov. 28, 1990, 104 Stat. 4123.)