Down payment assistance
Forgivable loans
Forgivable DPA loans are often structured as second mortgages where some or all of the balance is erased over time if you meet occupancy and other conditions. If you move, sell, or refinance before the forgiveness period ends, you may owe all or part of the balance.
How forgiveness schedules work
Programs may forgive on a straight timetable (for example a percentage each year) or in one lump sum after a cliff period—five to fifteen years is frequently cited for DPA products, but your program's legal terms control. Until forgiveness is complete, the lien remains important for title and refinance planning.
What can accelerate repayment
- Selling the home or ceasing to use it as a primary residence before the forgiveness period ends
- Refinancing the first mortgage without a program-approved subordination or payoff path
- Title transfers that the program treats as a disqualifying event
Forgivable loan vs. grant
A forgivable loan can behave like a grant if you stay long enough—but it is not guaranteed forgiveness on day one. Compare the forgiveness timeline to how long you realistically plan to own the home, and model an early-move scenario so you are not surprised by a payoff.
Educational overview only. Forgiveness percentages, timelines, and triggers are defined in program agreements—not summaries like this one.