42 U.S.C. § 12852 : US Code - Section 12852: Assistance for first-time homebuyers

Search 42 U.S.C. § 12852 : US Code - Section 12852: Assistance for first-time homebuyers

(a) In general
The Trust shall provide assistance payments for first-time
homebuyers (including homebuyers buying shares in limited equity
cooperatives) in the following manners:
(1) Interest rate buydowns
Assistance payments so that the rate of interest payable on the
mortgages by the homebuyers does not exceed 6 percent.
(2) Downpayment assistance
Assistance payments to provide amounts for downpayments
(including closing costs and other costs payable at the time of
closing) on mortgages for such homebuyers.
(3) Assistance in connection with mortgage revenue bonds
financing
Interest rate buydowns and downpayment assistance in the manner
provided in subsection (e) of this section.
(4) Second mortgage assistance
Assistance payments to provide loans (secured by second
mortgages) with deferred payment of interest and principal; and
(!1)
(5) Capitalization of revolving loan funds
Grants to public organizations or agencies to establish
revolving loan funds to provide homeownership assistance to
eligible first-time homebuyers consistent with the requirements
of this subchapter. Such grants shall be matched by an equal
amount of local investment in such revolving loan funds. Any
proceeds or repayments from loans made under this paragraph shall
be returned to the revolving loan fund established under this
paragraph to be used for purposes related to this section.
(b) Eligibility requirements
Assistance payments under this subchapter may be made only to
homebuyers and for mortgages meeting the following requirements:
(1) First-time homebuyer
The homebuyer is an individual who -
(A) (and whose spouse) has had no ownership in a principal
residence during the 3-year period ending on the date of
purchase of the property with respect to which assistance
payments are made under this subchapter;
(B) is a displaced homemaker who, except for owning a home
with his or her spouse or residing in a home owned by the
spouse, meets the requirements of subparagraph (A);
(C) is a single parent who, except for owning a home with his
or her spouse or residing in a home owned by the spouse while
married, meets the requirements of subparagraph (A); or
(D) meets the requirements of subparagraph (A), (B), or (C),
except for owning, as a principal residence, a dwelling unit
whose structure is -
(i) not permanently affixed to a permanent foundation in
accordance with local or other applicable regulations; or
(ii) not in compliance with State, local, or model building
codes, or other applicable codes, and cannot be brought into
compliance with such codes for less than the cost of
constructing a permanent structure.
(2) Maximum income of homebuyer
The aggregate annual income of the homebuyer and the members of
the family of the homebuyer residing with the homebuyer, for the
12-month period preceding the date of the application of the
homebuyer for assistance under this subchapter, does not exceed -

(A) 95 percent of the median income for a family of 4 persons
(adjusted by family size) in the applicable metropolitan
statistical area (or such other area that the Board of
Directors determines for areas outside of metropolitan
statistical areas); or
(B) 115 percent of such median income (adjusted by family
size) in the case of an area that is subject to a high cost
area mortgage limit under title II of the National Housing Act
[12 U.S.C. 1707 et seq.].
The Board of Directors shall provide for certification of such
income for purposes of initial eligibility for assistance
payments under this subchapter and shall provide for
recertification of homebuyers (and families of homebuyers) so
assisted not less than every 2 years thereafter.
(3) Certification
The homebuyer (and spouse, where applicable) shall certify that
the homebuyer has made a good faith effort to obtain a market
rate mortgage and has been denied because the annual income of
the homebuyer and the members of the family of the homebuyer
residing with the homebuyer is insufficient.
(4) Principal residence
The property securing the mortgage is a single-family residence
or unit in a cooperative and is the principal residence of the
homebuyer.
(5) Maximum mortgage amount
The principal obligation of the mortgage does not exceed the
principal amount that could be insured with respect to the
property under the National Housing Act [12 U.S.C. 1701 et seq.].
(6) Maximum interest rate
The interest payable on the mortgage is established at a fixed
rate that does not exceed a maximum rate of interest established
by the Trust taking into consideration prevailing interest rates
on similar mortgages.
(7) Responsible mortgagee
The mortgage has been made to, and is held by, a mortgagee that
is federally insured or that is otherwise approved by the Trust
as responsible and able to service the mortgage properly.
(8) Minimum downpayment
For a first-time homebuyer to receive downpayment assistance
under subsection (a)(2) of this section, the homebuyer shall have
paid not less than 1 percent of the cost of acquisition of the
property (excluding any mortgage insurance premium paid at the
time the mortgage is insured), as such cost is estimated by the
Board of Directors.
(c) Terms of assistance
(1) Security
Assistance payments under this subchapter shall be secured by a
lien on the property involved. The lien shall be subordinate to
all mortgages existing on the property on the date on which the
first assistance payment is made.
(2) Repayment upon sale
Assistance payments under this subchapter shall be repayable
from the net proceeds of the sale, without interest, upon the
sale of the property for which the assistance payments are made.
If the sale results in no net proceeds or the net proceeds are
insufficient to repay the amount of the assistance payments in
full, the Board of Directors shall release the lien to the extent
that the debt secured by the lien remains unpaid.
(3) Repayment upon increased income
If the aggregate annual income of the homebuyer (and family of
the homebuyer) assisted under this subchapter exceeds the
applicable maximum income allowable under subsection (b)(2) of
this section for any 2-year period after such assistance is
provided, the Board of Directors may provide for the repayment,
on a monthly basis, of all or a portion of such assistance
payments, based on the amount of assistance provided and the
income of the homebuyer (and family of the homebuyer).
(4) Repayment if property ceases to be principal residence
If the property for which assistance payments are made ceases
to be the principal residence of the first-time homebuyer (or the
family of the homebuyer), the Board of Directors may provide for
the repayment of all or a portion of the assistance payments.
(5) Available assistance
The Trust may make assistance payments under paragraphs (1) and
(2) of subsection (a) of this section with respect to a single
mortgage of an eligible homebuyer.
(d) Allocation formula
Amounts available in any fiscal year for assistance under this
subchapter shall be allocated for homebuyers in each State on the
basis of the need of eligible first-time homebuyers in each State
for such assistance in comparison with the need of eligible first-
time homebuyers for such assistance among all States.
(e) Assistance in connection with housing financed with mortgage
revenue bonds
(1) Authority
The Trust shall provide assistance for first-time homebuyers in
the form of interest rate buydowns and downpayment assistance
under this subsection. Such assistance shall be available only
with respect to mortgages for the purchase of residences (A)
financed with the proceeds of a qualified mortgage bond (as such
term is defined in section 143 of title 26), or (B) for which a
credit is allowable under section 25 of title 26.
(2) Eligibility
To be eligible for assistance under this subsection, homebuyers
and mortgages shall also meet the requirements under subsection
(b) of this section, except that -
(A) the certification under subsection (b)(3) of this section
shall not be required for assistance under this subsection;
(B) the provisions of subsection (b)(2) of this section shall
not apply to assistance under this section; and
(C) the aggregate income of the homebuyer and the members of
the family of the homebuyer residing with the homebuyer, for
the 12-month period preceding the date of the application of
the homebuyer for assistance under this subsection, shall not
exceed 80 percent of the median income for a family of 4
persons (as adjusted for family size) in the applicable
metropolitan statistical area.
(3) Limitation of assistance
Notwithstanding subsection (a) of this section, assistance
payments for first-time homebuyers under this subsection shall be
provided in the following manners:
(A) Interest rate buydowns
Assistance payments to decrease the rate of interest payable
on the mortgages by the homebuyers, in an amount not exceeding -

(i) in the first year of the mortgage, 2.0 percent of the
total principal obligation of the mortgage;
(ii) in the second year of the mortgage, 1.5 percent of the
total principal obligation of the mortgage;
(iii) in the third year of the mortgage, 1.0 percent of the
total principal obligation of the mortgage; and
(iv) in the fourth year of the mortgage, 0.5 percent of the
total principal obligation of the mortgage.
(B) Downpayment assistance
Assistance payments to provide amounts for downpayments on
mortgages by the homebuyers, in an amount not exceeding 2.5
percent of the principal obligation of the mortgage.
(3) (!2) Availability
The Trust may make assistance payments under subparagraphs (A)
and (B) of paragraph (3) with respect to a single mortgage of a
homebuyer.