Side-by-side comparison
| Grant | Forgivable loan | Deferred loan | Repayable second | |
|---|---|---|---|---|
| Monthly payment | None | None | None | Yes |
| Repaid when | Usually never | If you sell, refinance, or move out early | When you sell, refinance, or pay off the first mortgage | Monthly over the term |
| Recorded lien | Usually no | Yes | Yes | Yes |
| Best for | Lowest long-term cost | Buyers planning to stay put | Buyers needing larger amounts | Buyers who need help and can afford a payment |
Grants
Grants usually don't need to be repaid. Some are tied to a slightly higher first-mortgage rate, so compare the rate and total cost against a loan without assistance.
Forgivable loans
A forgivable loan is forgiven over a set period — sometimes all at once at the end, sometimes a portion each year — as long as you keep the home as your primary residence. If you sell or refinance early, the remaining balance is typically due.
Deferred-payment loans
These have no monthly payment and are repaid later, usually when you sell, refinance, or pay off your first mortgage. Some programs share in your home's appreciation instead of charging interest. Know the exact repayment terms before you sign.
Repayable second mortgages
Some programs provide a second loan with its own monthly payment. It increases your monthly housing cost, so it's included in your debt-to-income ratio.
How to choose
- Planning to stay 5+ years? Forgivable assistance can work like a grant.
- Might move or refinance soon? Understand what you'd owe on a forgivable or deferred loan.
- Comparing offers? Look at the first-mortgage rate, fees, and assistance terms together.