(b) Homeownership assistance under this chapter may be provided for any purposes authorized under Section 51402, including, but not limited to, all of the following:

1. (1) An interest rate subsidy to reduce the interest rate.
2. (2) A deferred-payment, low-interest, subordinate mortgage loan, including downpayment assistance, closing cost assistance, or both, to make financing affordable to low- and moderate-income homebuyers.
3. (3) Buying down the cost of mortgage insurance.

(f)

1. (1) The agency may, in its discretion, permit the lien of the downpayment assistance loan to be subordinated to refinancing if it determines that one of the following applies:

   1. (A) The borrower has demonstrated hardship and subordination is required to avoid foreclosure.
   2. (B) The borrower has acquired subordinate financing to build an accessory dwelling on the property.
   3. (C) The borrower has acquired subordinate financing to make the property compliant with the federal Americans with Disabilities Act of 1990 (Public Law 101-336), facilitate rehabilitation needed to allow the owner to age in place, or both.
   4. (D) The new loan meets the agency’s underwriting requirements.
2. (2) The agency may permit subordination on those terms and conditions as it determines are reasonable.
3. (3) The amount of home purchase assistance shall not be due and payable upon the sale of the home if the first mortgage loan is insured by the Federal Housing Administration (FHA) or if the first mortgage loan is, or has been, transferred to the FHA, or if the requirement is otherwise contrary to the regulations of the United States Department of Housing and Urban Development governing FHA insured first mortgage loans.