NC Down Payment Assistance: When Do You Repay? (Forgiven Years 11–15)
North Carolina's down payment assistance is forgivable, but on an unusual schedule: nothing forgives for ten years, then it forgives 20% a year through year 15. Here is exactly when you repay and when you do not.
The forgiveness schedule
North Carolina’s structure is distinctive, so it is worth walking through. For the first ten years, the down payment second just sits behind your first mortgage. There is no monthly payment, but nothing is forgiven yet either. Starting in year 11, it begins to forgive: 20% of the original amount each year in years 11, 12, 13, 14, and 15. By the end of year 15, 100% is forgiven and you owe nothing. So the reward is for staying, keep the home 15 years and the assistance costs you nothing.
When you actually repay
You repay the assistance only if you leave early. Sell the home, refinance the first mortgage, or stop using it as your primary residence before year 11, and the full amount is due from your proceeds. Do the same between years 11 and 15, and you repay only the portion that has not yet been forgiven, which shrinks each year. After year 15, there is nothing to repay under any circumstances. Because there is no monthly payment the whole time, it never adds to your housing cost, it is only ever settled at a sale or refinance, if at all.
What it means for your purchase
Two takeaways. First, if you plan to stay in the home long term, treat the assistance as money you will likely never repay, that is the whole design. Second, if you expect to move or refinance within the first several years, plan for the balance to come due at that point from your equity. It is still a zero-payment, no-interest-cost second in the meantime. This declining-forgiveness structure is one of the more generous in the Southeast for a buyer putting down roots. Compare the two amounts on our 3% vs. $15,000 page.
Common questions
Is North Carolina down payment assistance forgivable?
Yes. The NCHFA second has no forgiveness for the first 10 years, then forgives 20% per year in years 11 through 15, fully forgiven at the end of year 15. You repay it only if you sell, refinance, or move out before it fully forgives.
When do you repay NC down payment assistance?
If you sell, refinance, or stop using the home as your primary residence before year 11, you repay the full amount from your proceeds. Between years 11 and 15 you repay only the portion not yet forgiven. After year 15 there is nothing to repay.
Does NC down payment assistance have a monthly payment?
No. The NCHFA second is a 0% deferred lien with no monthly payment the entire time. It is only ever settled at a sale or refinance, and if you keep the home 15 years it is fully forgiven.
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