(a) In addition to any other authority conferred by law, the Housing Finance Authority is authorized and directed to establish by regulation a mortgage subsidy program which meets the criteria of this section.
(b) The subsidy program shall:
(1) Serve buyers seeking a mortgage loan in an amount determined by regulation.
(2) Provide a subsidy for all interest costs exceeding twelve percent.
(3) Include a provision whereby the Authority will take an interest-bearing second mortgage to cover the cost of the subsidy payments, which second mortgage shall be due and payable upon sale of the property or upon discharge of any first mortgage lien.
(4) Provide for repayment of the second mortgage according to a reasonable payment plan, if requested by the mortgagor.
(5) Provide for refinancing of the existing first mortgage loan due the second mortgage loan if interest levels on new mortgages issued pursuant to this chapter drop below twelve percent for thirty days or more and resulting monthly payments would not exceed what the borrower would have paid when the initial loan was negotiated if interest rates had been twelve percent.
(c) The Housing Finance Authority is hereby authorized and directed to maintain a separate and distinct fund consisting of all monies appropriated to it by the Legislature of the Virgin Islands. Sixty days before the end of each fiscal year the Housing Finance Authority shall provide the Legislature with a report of the disbursements from and credits to such fund, audited by a Certified Public Accountant.