StacksVerified U.S. regulatory reference

42 U.S.C. § 12808

Verified against govinfo.gov as of June 20, 2026View official text on govinfo.gov ↗
  1. (a)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.
  2. (b)The program under this section shall provide for homeownership counseling to first-time homebuyers assisted, which shall include—
    1. (1)counseling before and after purchase of the property;
    2. (2)assisting first-time homebuyers in identifying the most suitable and affordable properties;
    3. (3)providing homebuyers with financial management assistance;
    4. (4)assisting homebuyers in understanding mortgage transactions and home sales contracts; and
    5. (5)assisting homebuyers with eliminating any credit problems that may prevent the homebuyers from purchasing the property.
  3. (c)Deferred payment loans secured by second mortgages may be provided under the model program under this section if—
    1. (1)the homebuyer assisted is a first-time homebuyer;
    2. (2)the property secured by the second mortgage is a single-family residence and is the principal residence of the homebuyer; and
    3. (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.
  4. (d)
    1. (1)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. (2)The interest rate on the unpaid balance of a loan under this section shall be at least 4 percent.
    3. (3)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.
  5. (e)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.