(1) Except as provided in (2) , a TANF loan shall:

(a) provide for complete amortization at maturity through substantially equal monthly payments of principal and interest;

(b) have a term not to exceed 30 years;

(c) bear interest at the rate of 2% per annum;

(d) be subject to a late charge of 4% of the monthly payment due for each monthly payment that is not made within 15 days of its due date; and

(e) if the loan is from a TANF allocation - home ownership or is a loan for mortgage payment assistance from a TANF allocation - emergency housing assistance, be secured at closing by a lien on the real property for which the loan is made, which lien shall be perfected through the use of a trust indenture subordinate to the first mortgage naming the board as beneficiary.

(2) As an alternative to an amortized loan as provided for in (1) , a loan from a TANF allocation - home ownership or a loan for mortgage payment assistance from a TANF allocation - emergency housing assistance may provide that the principal balance and all accrued interest need not be paid until and upon the death of the applicant, the transfer, sale or cessation of use as the primary residence by the applicant of the real property for which the loan was made, or upon satisfaction of the first mortgage in conjunction with which the loan is made.  Such a loan shall:

(a) bear interest at the rate of 2% per annum; and

(b) be secured at closing by a lien on the real property, perfected through the use of a trust indenture subordinate to the first mortgage naming the board as beneficiary.