((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.1