United States Code

USC most recently checked for updates: Apr 20, 2024

§ 12808.
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

 So in original. Probably should be “amounts”.
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.

(Pub. L. 101–625, title II, § 258, Nov. 28, 1990, 104 Stat. 4123.)
cite as: 42 USC 12808