The full explanation
Instead of collecting it through monthly payments, the program may defer payments and forgive the debt over time. If you sell the home or pay off your mortgage before the term ends, you may have to repay the money. Each program sets its own rules.
An example
For her down payment, Mónica gets a forgivable second mortgage from her city's program. She makes no monthly payments and, under the program's rules, the debt is forgiven over the years. If she sold the home early, she might have to repay the money.
You will see it in…
- The second mortgage note and security instrument you sign at closing
- The Closing Disclosure, where the program funds appear
- The down payment assistance program rules
