Forgivable vs. Repayable Down Payment Assistance
Assistance can be up to 5% of the price. The real question is whether you pay it back, and when.
5-year forgivable second
30-year repayable second
Best for
Buyers planning to stay at least five years
Buyers who may move or refinance sooner
How it works
A second loan that is forgiven over five years if you stay in the home
A second loan you pay back over 30 years
Cost to you
Nothing to repay if you stay the full term
You repay the full amount over time
Monthly payment
No extra monthly payment on the assistance
Adds a second payment each month
If you sell or refinance early
You may owe back part of it
Balance is paid off at sale or refinance
Watch out for
Leaving before year five
The extra monthly payment squeezing your budget
Our take: Staying put for five years? Forgivable is hard to beat. Not sure where you will be? Repayable keeps your options open at the cost of a second payment.
