Administration Initiatives and Special Programs.

A. The Administration, in its discretion, may set aside Program funds for initiatives and special programs, whereby funds may be made available under special terms set by the Administration. B. The Administration, in its discretion, may operate a program whereby Program loans are collateral for mortgage-backed securities, or other securities, certificates, or agreements, under the terms and conditions which the Administration and the issuer of the securities, or certificates, or other party to the agreements, may require. C. Subordinate Mortgage Loans. (1) The Administration, in its discretion, may operate a program in which a borrower receiving a first mortgage loan through the Program also may receive a second and subordinate mortgage loan through the Program under terms set by the Administration. (2) The purpose of such a program is to provide a governmental benefit to qualifying borrowers by providing additional financing when doing so will enhance the borrowers' opportunities for affordable housing. (3) The borrower may be charged a higher rate of interest on the first mortgage loan than the rate charged on first mortgage loans to borrowers who do not receive the secondary mortgage loan. (4) The Program may make loans that do not bear interest and are forgivable as to principal under terms set by the Administration. D. Settlement Expense Grants. (1) The Administration may make funds available for grants to Program borrowers to assist with settlement expenses upon terms set by the Administration. (2) The loan to the borrower receiving a grant under §D(1) of this regulation may be at a higher interest rate than loans available without the grant. (3) The Administration may require that the borrower execute Administration documentation to receive the grant. (4) The purpose of such a program is to provide a governmental benefit to qualifying borrowers by providing down payment and settlement costs when doing so will enhance the borrowers' opportunities for affordable housing.