Texas DPA: Repayable vs. Forgivable Second Lien
Texas down payment assistance comes as a 0% deferred second mortgage in two forms: one repaid when you sell or refinance, one forgiven after three years. Picking the right one comes down to how long you plan to stay.
The core difference
Both options do the same job at closing, they cover your down payment and closing costs with a zero-percent second that has no monthly payment. The difference is what happens later. The repayable version stays on the home until you sell, refinance, or pay off, and then it is due in full from your proceeds. The forgivable version disappears after three years, as long as you still own and occupy the home; sell or refinance inside that window and you repay it. Neither costs you anything month to month.
Repayable vs. forgivable at a glance
| Feature | Repayable (deferred) | 3-Year Forgivable |
|---|---|---|
| Interest | None | None |
| Monthly payment | None | None |
| When it is due | Sale, refinance, or payoff | Forgiven after 36 months |
| If you move in 2 years | Repaid from proceeds | Repaid (before forgiveness) |
| If you stay 5 years | Repaid at eventual sale | Gone — nothing owed |
| Best for | Any timeline; larger amounts | Buyers who plan to stay 3+ years |
TSAHC also offers a true grant (never repaid) as a third option on its programs.
Who picks which
If you plan to stay in the home at least three years, the forgivable second is usually the better deal, keep the house and the assistance simply vanishes. If you might move or refinance sooner, the math is closer, and the repayable option (or a TSAHC grant) can make more sense. There is no penalty either way, just a repayment if a forgivable second is triggered early. Because the amounts run 2% to 5% of the loan, the choice is worth a few minutes to get right, which is exactly what we do before you commit.
Common questions
What is the difference between repayable and forgivable Texas DPA?
Both are 0% deferred second liens with no monthly payment. The repayable version is due in full when you sell, refinance, or pay off the first lien. The 3-year forgivable version is forgiven after 36 months, and repaid only if you sell or refinance sooner. TSAHC also offers a true grant that is never repaid.
Is Texas down payment assistance forgiven?
It can be. Both TDHCA and TSAHC offer a 3-year deferred forgivable second lien that is forgiven after 36 months if you keep the home. They also offer a repayable deferred option, and TSAHC offers a grant that is never repaid.
Which Texas DPA option is better?
If you plan to stay at least three years, the forgivable second usually wins because it disappears. If you might move or refinance sooner, the repayable option or a TSAHC grant can be a better fit. Both add no monthly payment.
Ready to see your options?
Tell us your county, credit range, and price target, and we’ll map your Texas path in a no-pressure 20-minute call. No obligation.