Sec. 258. SECOND MORTGAGE ASSISTANCE FOR FIRST-TIME HOMEBUYERS
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## SEC. 258 SECOND MORTGAGE ASSISTANCE FOR FIRST-TIME HOMEBUYERS **[**[42 U.S.C. 12808](/us/usc/t42/s12808)**]** ###
(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 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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Sec. 258
SECOND MORTGAGE ASSISTANCE FOR FIRST-TIME HOMEBUYERS
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