SEC-254 -- REHABILITATION LOANS.


 (a) In General.-The Secretary shall make available a model program to
provide direct loans to finance the rehabilitation of low and moderate
income single family and multifamily residential properties.

 (b) Condition of Loans.-The Secretary shall establish terms and
conditions to ensure that such loans are acceptable risks, taking into
consideration the need for rehabilitation, the security for the loan and
the ability of the borrower to repay the loan. The Secretary may
establish the interest rate for loans under the model program, which
shall include special interest rates for loans to borrowers with incomes
below 80 percent of the area median income.

 (c) Additional Restrictions.-Guidelines for the model program may
require that the property-

 (1) be located in an area that contains a substantial number of
dwellings in need of rehabilitation;

 (2) the property is residential and owner-occupied; and

 (3) the property is in need of rehabilitation or concentrated code
enforcement within a reasonable time, and the rehabilitation of such
property is consistent with a local plan for rehabilitation or code
enforcement.
Additional guidelines for the model program shall generally comport with
the additional protections and restrictions specified under section 312
of the Housing Act of 1964.