Down payment assistance
Deferred loans (silent seconds)
A deferred loan is often recorded as a second lien on the home, but unlike a payment loan you typically do not make monthly installments. Instead, the balance becomes due when a trigger happens—most commonly sale, refinance, or paying off the first mortgage.
Why programs use this structure
Deferred seconds help buyers preserve monthly cash flow while still bringing funds to the closing table. Many are low- or zero-interest. Because repayment is postponed—not canceled—these are not grants. When you exit the financing or the property, the outstanding balance is usually paid from sale or refinance proceeds, which affects your net equity at that time.
Common terms to compare
- Due-on-sale and due-on-refi — Know exactly which events accelerate repayment.
- Interest and fees — Some deferred loans accrue simple interest even without monthly bills.
- Subordination — If you refinance, the DPA lien may need to resubordinate or be paid off—your lender coordinates this.
Grants vs. deferred loans
Grants (when truly non-repayable under program rules) do not create a lien balance to settle at sale. Deferred loans usually do. The better choice depends on your timeline, how long you plan to stay, and the program's cost of funds—not just the headline assistance amount.
Educational overview only. Deferred loan documents vary widely; read your note, deed of trust, and program rider carefully with your closing team.