(a) “Home mortgage” or “mortgage” means an interest-bearing loan made as provided in this part to a mortgagor, whether originated in the manner provided in subdivision (a) or (b) of Section 52020.5, which is evidenced by a promissory note and secured by a mortgage, deed of trust, or other security instrument on a home, and which may, but is not required to be, additionally secured by insurance on the payment of that note, for the purpose of purchasing, constructing, or improving a home which meets either of the following criteria:

1. (1) Is newly constructed or is being rehabilitated and which, in either case, is located within an area or neighborhood in which the City of Gardena is conducting a housing rehabilitation or code enforcement program; a neighborhood preservation area or concentrated rehabilitation area designated pursuant to this division; an area for which federal funds are being made available; a renewal area as defined in Section 33702; or a residential rehabilitation area as defined in Section 37912; provided, however, that a loan may be made for the purchase of a newly constructed home anywhere within the City of Gardena if the purchase is in connection with a program adopted by ordinance of the City of Gardena the purpose of which is to increase the housing supply.
2. (2) Is a home upon which no rehabilitation is being undertaken in connection with any financing pursuant to this part, where the purchaser will not be the first occupant and which is located within the City of Gardena.

(b) “Home mortgage” or “mortgage” includes a loan made as provided in this part to a first-time homebuyer, as defined in Section 52012.5, which provides for the following terms:

1. (1) The purchaser shall make an initial payment of at least 5 percent of the selling price of the property.
2. (2) The balance of the purchase price may be amortized over a period fixed by the City of Gardena not exceeding 50 years, together with interest thereon at the rate as determined by the City of Gardena for amortization purposes.
3. (3) The City of Gardena may, in order to allow the buyer to purchase the home selected without incurring excessive monthly payments, at the time of initial purchase, postpone the commencement of any portion of the payments for not to exceed five years. In accordance with previously established criteria for these determinations, that the buyer’s income can reasonably be expected to increase sufficiently within the five-year period to make the transition to fully amortized principal and interest payments.
4. (4) The total term of the contract of purchase shall not exceed 40 years. The purchaser on any installment date may pay any or all installments still remaining unpaid.
5. (5) In any individual case the City of Gardena may for good cause postpone from time to time as the City of Gardena deems proper, the payment of the whole or any part of any installment of the purchase price or interest thereon.