F. Downpayment Loan Assistance Program
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F. Downpayment Loan Assistance Program
Note
Subpart heading amended by L 2017, c 123, §3.
§201H-161 Downpayment loans.
(a)The corporation may make downpayment loans, either directly or through a nonprofit organization as defined in section 454F-1, to eligible borrowers who qualify for loans under section 201H-162. The downpayment loan to any one borrower shall not exceed fifteen per cent of the purchase price or appraised value of the residential property or $60,000, whichever is less. In no event shall the loan amount and purchase money mortgage amount exceed one hundred per cent of combined loan-to-value. The interest rate on the loans may range from one per cent to eight per cent, depending on the buyer's income.
(b)The repayment of every downpayment loan shall be secured by a duly recorded second mortgage executed by the borrower to the State on the residential property purchased with the downpayment loan.
(c)The principal of the downpayment loan, together with accrued interest, shall be due and payable upon the sale, transfer, or refinancing of the property, or shall be repaid by the borrower in installments as determined by the corporation; provided that the corporation may provide a period in which payments may be waived. The period over which the principal and interest shall be paid need not coincide with the period over which the loan from the mortgage lender for the balance of the purchase price must be repaid. The borrower may repay the whole or any part of the unpaid balance of the downpayment loan, plus accrued interest, at any time without penalty.
(d)The corporation may secure the services of nonprofit organizations, as defined in section 454F-1, to originate the downpayment loans on behalf of the State for an origination fee not in excess of the prevailing loan origination fee amount, as determined by the corporation.
(e)The corporation may secure the services of the mortgage lender who loans to the borrower the balance of the purchase price of the residential property or the services of any other mortgage lender doing business in the State to collect, on behalf of the State, the principal and interest of the downpayment loan and otherwise to service the downpayment loan, for a servicing fee not in excess of the prevailing loan servicing fees.
(f)The corporation shall adopt rules pursuant to chapter 91 to carry out the purposes of this subpart. [L 2006, c 180, pt of §4; am L 2017, c 123, §4]