---
kind: "section"
citation: "42 U.S.C. § 12804"
title: "42"
title_heading: "The Public Health and Welfare"
number: "12804"
heading: "Rehabilitation loans"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/12804"
units:
  - "Chapter 130 — National Affordable Housing"
  - "Subchapter II — Investment in Affordable Housing"
  - "Part D — Specified Model Programs"
---

# §12804. Rehabilitation loans

- (a) **In general—** The [Secretary](/usc/42/12704.md?p=16) 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](/usc/42/12704.md?p=16) shall establish terms and conditions to ensure that such loans are acceptable risks, taking into consideration the need for rehabilitation, the [security](/usc/42/12704.md?p=12) for the loan and the ability of the borrower to repay the loan. The [Secretary](/usc/42/12704.md?p=16) 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[^1] is residential and [owner](/usc/42/13641.md?p=4)-occupied; and
  - (3) the property[^1] 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 1452b](/usc/42/1452b.md)[^2] of this title.


## Footnotes

[^1]: So in original. The words “the property” probably should not appear.
[^2]: See References in Text note below.

## Source credit

(Pub. L. 101–625, title II, § 254, Nov. 28, 1990, 104 Stat. 4121.)

## Notes

### Editorial Notes

### References in Text

Section 1452b of this title, referred to in subsec. (c), was repealed by Pub. L. 101–625, title II, § 289(b)(1), Nov. 28, 1990, 104 Stat. 4128, which is classified to section 12839(b)(1) of this title.