(a) Any loan or deferred loan contracted for pursuant to this chapter shall be secured by a second mortgage on the dwelling purchased by the recipient of such loan or deferred loan. If the recipient of such loan or deferred loan assigns, transfers or otherwise conveys his interest in such dwelling or ceases to occupy such dwelling, the unpaid principal balance of said second mortgage, together with interest thereon, shall become due and payable. If the recipient of any loan or deferred loan is unable to repay the loan or deferred loan, the authority or the commissioner, for loans or deferred loans made under this chapter prior to October 1, 1995, and the authority for loans or deferred loans made after October 1, 1995, at his or its discretion, as the case may be, may adjust the interest rate, terms and conditions of the loan or deferred loan to facilitate repayment.

(b) Repayment of any loan or deferred loan provided in accordance with this chapter shall be subject to an interest rate to be determined in accordance with subsection (t) of section 3-20 and such terms and conditions as the commissioner or the authority may establish. The authority, in its discretion, (1) may approve repayment of a loan for a term that is concurrent with the first mortgage or, in the case of a first mortgage that is a graduated payment mortgage, for a term of no more than thirty years or (2) may require the loan be due and payable upon assignment, transfer, sale or other conveyance of the property. Payments by homeowners who have received financial assistance under this chapter prior to October 1, 1995, shall be paid to the State Treasurer and deposited in the General Fund of the state. Payments by homeowners who have received financial assistance under this chapter after October 1, 1995, shall be paid to the authority, deposited in such funds or accounts as the authority may establish from time to time for such purpose and paid by the authority to the State Treasurer and deposited in the General Fund, except that with the approval of the Secretary of the Office of Policy and Management and the State Treasurer payments received by the authority may be used by the authority to make additional loans pursuant to this chapter.

(P.A. 77-612, S. 5; P.A. 83-259, S. 1, 2; P.A. 87-416, S. 9, 24; P.A. 91-346, S. 3, 9; P.A. 92-166, S. 22, 31; P.A. 95-250, S. 30, 42; 95-309, S. 11, 12.)

History: P.A. 83-259 allowed for longer term for second mortgage in the case of graduated payment mortgage loans; P.A. 87-416 provided that the interest rates on loans would be determined in accordance with Sec. 3-20(t); P.A. 91-346 amended Subsec. (b) by deleting provisions re the term of the loan and in lieu thereof gave the commissioner discretion in setting repayment term; P.A. 92-166 made technical change adding provisions re deferred loans, consistent with 1992 public acts; P.A. 95-250 amended Subsecs. (a) and (b) to add provisions re loans made by the authority after October 1, 1995; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section.