(a) In the name of the Government of the United States Virgin Islands, and with the approval of the Governor, the Executive Director of the Virgin Islands Housing Finance Authority shall issue contracts for the purchase and sale of land and dwellings provided under this subchapter or issue deeds of conveyance either in fulfilment of a contract or as a cash sale transaction. Power is hereby delegated to the Executive Director of the Virgin Islands Housing Finance Authority to prescribe the terms and conditions of the contract of sale and purchase and deed of conveyance setting forth all of the conditions and restrictions of the purchase as provided in this subchapter, and unless the purchase price is paid in full, the Executive Director of the Virgin Islands Housing Finance Authority shall obtain from the purchaser a note secured by a first mortgage on the property so conveyed.
(b) No deed shall be delivered unless the applicant has made an initial payment of at least 5 percent of the purchase price in cash or by certified check. The balance shall be payable pursuant to the note signed by the applicant and secured by the mortgage on the property conveyed. Each mortgage shall provide for installment payments together with interest at a rate to be determined by the Executive Director of the Virgin Islands Housing Finance Authority, commensurate with the current per annum interest rates, amortized monthly or quarterly over a period not to exceed 30 years. Each mortgage and deed shall provide that in the event of a default in any material condition there shall be a defeasance of title which shall immediately revert title to the grantor and mortgagee. Prepayment of installments in multiples of $100 may be made at any time without penalty.
(c) Upon delivery of the deed, the applicant shall furnish evidence that he has obtained fire and hurricane insurance covering the premises in amounts deemed adequate by the Executive Director of the Virgin Islands Housing Finance Authority. The policy or policies shall be delivered to the Executive Director of the Virgin Islands Housing Finance Authority.
(d) After acceptance of the deed, the purchaser shall be responsible for the payment of all mortgage installments plus interest, taxes, insurance premiums and all other operational or carrying charges.
(e) The Executive Director of the Virgin Islands Housing Finance Authority in his discretion and solely for reasons of hardship may:
(1) accept less than 5 percent of the purchase price for an initial payment provided a sum equal to at least two years' taxes and insurance premiums figured at current rates is paid in advance and upon delivery of the deed;
(2) declare a moratorium of up to 6 months in the payment of mortgage installments including interest by ruling that defaults in installment payments for less than 6 months shall not be deemed “material”;
(3) upon default and reverting of title to the grantor and mortgagee, refund up to two-thirds of the principal sum paid by the grantee and mortgagor.
(f) An applicant who owns land and is applying only for construction aid shall pay at least 5 percent of the construction cost as estimated by the Executive Director of the Virgin Islands Housing Finance Authority and as provided in subsection (b) hereof. He shall execute a note and mortgage for the balance on forms approved by the Executive Director of the Virgin Islands Housing Finance Authority which shall provide for the payment of monthly or quarterly installments plus interest at the rate of 5 percent per annum. Prepayment without penalty may be made in multiples of $100. He shall provide for the adequate hurricane and fire insurance and deliver the policies to the Executive Director of the Virgin Islands Housing Finance Authority. Thereafter he shall be responsible for all of the charges set forth in subsection (d) hereof.
(g) All forms used herein including contract, deed, note, mortgage and otherwise shall be prepared and supplied by the Executive Director of the Virgin Islands Housing Finance Authority who shall also promulgate rules, subject to revision from time to time, as needed, relating to the contents and form of all instruments or documents used or issued pursuant to this subchapter.