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42 U.S.C. ch. 130 (§§ 12701–12841) — Cranston-Gonzalez National Affordable Housing Act (incl. HOME Investment Partnerships Act, §§ 12741–12756)

§12808. Second mortgage assistance for first-time homebuyers

42 U.S.C. ch. 130 (§§ 12701–12841) — Cranston-Gonzalez National Affordable Housing Act (incl. HOME Investment Partnerships Act, §§ 12741–12756) · 2026 edition · updated 2026-07-29 · United States

(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 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.

(Pub. L. 101–625, title II, §258, Nov. 28, 1990, 104 Stat. 4123.)

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▸ Contents — 42 U.S.C. ch. 130 (§§ 12701–12841) — Cranston-Gonzalez National Affordable Housing Act (incl. HOME Investment Partnerships Act, §§ 12741–12756)
42 U.S.C. ch. 130 (§§ 12701–12841) — Cranston-Gonzalez National Affordable Housing Act (incl. HOME Investment Partnerships Act, §§ 12741–12756)
  1. ▸ 42 U.S.C. ch. 130 (§§ 12701–12841) — Cranston-Gonzalez Nationa…
    Overview
    1. §12721. Findings
    2. §12722. Purposes
    3. §12723. Coordinated Federal support for housing strategies
    4. §12724. Authorization of program
    5. §12725. Notice
    6. §12741. Authority
    7. §12742. Eligible uses of investment
    8. §12743. Development of model programs
    9. §12744. Income targeting
    10. §12745. Qualification as affordable housing
    11. §12746. Participation by States and local governments
    12. §12747. Allocation of resources
    13. §12748. HOME Investment Trust Funds
    14. §12749. Repayment of investment
    15. §12750. Matching requirements
    16. §12751. Private-public partnership
    17. §12752. Distribution of assistance
    18. §12753. Program enforcement and penalties for noncompliance
    19. §12754. Limitation on jurisdictions under court order
    20. §12755. Tenant and participant protections
    21. §12756. Monitoring of compliance
    22. §12757. Revitalizing empty structures into desirable environme…
    23. §12771. Set-aside for community housing development organizati…
    24. §12772. Project-specific assistance to community housing devel…
    25. §12773. Housing education and organizational support
    26. §12774. Other requirements
    27. §12781. Authority
    28. §12782. Priorities for capacity development
    29. §12783. Conditions of contracts
    30. §12784. Research in housing affordability
    31. §12785. REACH: asset recycling information dissemination
    32. §12801. General authority
    33. §12802. Rental housing production
    34. §12803. Rental rehabilitation
    35. §12804. Rehabilitation loans
    36. §12805. Sweat equity model program
    37. §12806. Home repair services grants for older and disabled hom…
    38. §12807. Low-income housing conservation and efficiency grant p…
    39. §12808. Second mortgage assistance for first-time homebuyers
    40. §12809. Rehabilitation of State and local government in rem pr…
    41. §12810. Cost-saving building technologies and construction tec…
    42. §12821. Omitted
    43. §12831. Equal opportunity
    44. §12832. Nondiscrimination
    45. §12833. Audits by Comptroller General
    46. §12834. Uniform recordkeeping and reports to Congress
    47. §12835. Citizen participation
    48. §12836. Labor
    49. §12837. Interstate agreements
    50. §12838. Environmental review
    51. §12839. Termination of existing housing programs
    52. §12840. Suspension of requirements for disaster areas
    53. §12841. Nonapplicability of certain requirements for small pro…

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