The details
The repayment structure is the single most important fact to understand about Hometown Heroes. The assistance is up to 5 percent of the first mortgage, with a maximum of $35,000 and a minimum of $10,000, and it is recorded as a second mortgage behind the first mortgage. Because the rate is 0 percent and the loan is non amortizing, the balance does not grow with interest and does not shrink with monthly principal payments during the deferral period. It simply waits, secured against the home, until a repayment trigger occurs.
Florida Housing lists four repayment triggers, and any one of them makes the full balance due: sale of the home, refinance of the first mortgage, transfer of the deed, or the home no longer being the borrower's primary residence. That last trigger catches some borrowers by surprise, because moving out without selling can still make the loan due. The 30 year term is the outer limit of the deferral, not a promise that the loan lasts 30 years in every case. In practice, most borrowers will face repayment much earlier, at the first sale or refinance, so the assistance should be treated as borrowed money with a delayed due date, not as a grant and not as money that fades away over time.
This is also why the word forgivable must never be attached to Hometown Heroes. Some other Florida programs do forgive their second mortgages over time, which makes the contrast confusing, but Florida Housing is explicit that Hometown Heroes is not forgivable. A borrower comparing programs should put them side by side on this point alone: a forgivable program can reduce or erase its balance on schedule, while Hometown Heroes keeps its full balance until a trigger event. Before relying on the program, confirm the current terms on the Florida Housing Hometown Heroes page and ask a participating lender to walk through what repayment would look like on a future sale or refinance.
Related loan programs
Frequently asked questions
Is Hometown Heroes forgivable after a certain number of years?
No. Florida Housing states explicitly that Hometown Heroes assistance is not forgivable. The balance remains due in full on a triggering event.
Does refinancing my first mortgage trigger repayment?
Yes. A refinance is one of the listed repayment triggers, along with sale, transfer of deed, and the home no longer being a primary residence.
Do I make monthly payments on the Hometown Heroes second mortgage?
No monthly payment is required while the loan remains deferred, because it is a 0 percent, non amortizing deferred second mortgage. The full balance is due when a trigger event occurs or at the end of the term.
More answers
- Is there such a thing as a free mortgage?
- Can you get an interest-free mortgage?
- What is a no-closing-cost mortgage?
- What is the difference between lender-paid and borrower-paid compensation?
- What does “lender-backed” mean on a mortgage?
- Mortgage broker or bank: which is better?
- How is DSCR calculated for a mortgage?
- What DSCR ratio do I need to qualify?
More in this series
- First-Time Homebuyers in Florida: Programs, Assistance, and First Steps
- Can down payment assistance programs be stacked in Florida?
- What are the qualifications and income limits for Florida down payment assistance?
- Do I need to be a teacher or nurse to qualify for Hometown Heroes?
- Can I use down payment assistance with an FHA, VA, or USDA loan?
- Can I get down payment assistance with a 580 to 640 credit score?
- What credit score do I need to buy a house in Florida?
- How much down payment assistance can I get in Florida?
- How long does pre-approval take?
- Florida Hometown Heroes Guide
- Florida Assist Guide
- HFA Preferred and Advantage in Florida
- Salute Our Soldiers in Florida