42 USC § 12808 - Second mortgage assistance for first-time homebuyers

---
identifier: "/us/usc/t42/s12808"
source: "usc"
legal_status: "official_prima_facie"
title: "42 USC § 12808 - Second mortgage assistance for first-time homebuyers"
title_number: 42
title_name: "THE PUBLIC HEALTH AND WELFARE"
section_number: "12808"
section_name: "Second mortgage assistance for first-time homebuyers"
chapter_number: 130
chapter_name: "NATIONAL AFFORDABLE HOUSING"
subchapter_number: "II"
subchapter_name: "INVESTMENT IN AFFORDABLE HOUSING"
part_number: "D"
part_name: "Specified Model Programs"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Pub. L. 101–625, title II, § 258, Nov. 28, 1990, 104 Stat. 4123.)"
---


# § 12808. Second mortgage assistance for first-time homebuyers

**(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.

**1** **Security** [^1]

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.

So in original. Probably should be “amounts”.

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