a. The agency is hereby authorized to make loans under the program to qualified purchasers
of dwelling units from nonprofit organizations undertaking eligible projects that
meet the requirements of section 7 of this act. 1
b. Loans made pursuant to this act shall be to low and moderate income purchasers
of dwelling units within the project for which the loan is made, who intend making
such dwelling units their principal place of residence, and who have entered into
agreements with a qualified nonprofit organization to participate to the extent of
their abilities in the actual work of construction or substantial rehabilitation. The terms of any such agreement shall provide that, if the prospective purchaser
fails or refuses to carry out his obligations thereunder, or withdraws from participation
in the project before completion of the project or any portion thereof to which his
obligation extends, the nonprofit organization shall provide for substitution of another
prospective purchaser who shall succeed to all the rights and obligations of the previous
participant subsisting at the time of substitution.
(1) Loans made pursuant to this subsection shall be made only to pre-qualified home
purchasers whose eligibility for such loans under the terms of this act has been determined
by the agency.
(2) A loan made to an eligible purchaser out of funds granted pursuant to this act
shall be secured by a mortgage held by the agency. The mortgage shall be secured by the property purchased by the eligible purchaser
and shall be amortized monthly, with interest not to exceed a rate consistent with
the provisions of subsection d. of section 5 of this act. 2 The loan shall be repayable in full upon sale, lease or other transfer of the property
resulting in that property's ceasing to be the principal residence of that purchaser;
except that such eligible purchaser shall be entitled at any prior time, and without
ceasing to maintain the property as his principal residence, to make repayment in
whole or part. The agency may forebear the payment of interest to the extent it deems prudent and
as may be permitted by the conditions of the bonds in any case in which it finds good
cause and that the exaction of such payment would work an exceptional hardship upon
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