The Quick Read: Sometimes, but only with the right structure. The grant option has nothing to repay and no stay clock, so it fits a buyer who may move again. The forgivable second lien ties forgiveness to on-time payments over 36 or 60 months. The repayable second is a real loan with a balloon in year 10. Every option still requires the home to be your owner-occupied primary residence.
What “Minimum Stay” Actually Means
Three different ideas get blurred under this phrase. Separate them before you compare programs.
| Concept | When it applies | What to ask |
|---|---|---|
| Residency before applying | Before the application | Does the program require time in a state or area? |
| Occupancy after closing | After closing | Must this be my primary residence? For how long? |
| Time to forgiveness | After closing | How many on-time payments until the lien is forgiven? |
On the files the wholesale network handles, the first one rarely comes up. The second is built into every option. The third only applies to the forgivable second.
Here is the plain answer. No option has a “minimum stay” on the assistance itself in the sense of a lock-in on the grant. But “no stay requirement” does not mean “no consequence for leaving.” Those are different things, and most relocating buyers get tripped up on exactly that gap.
How Each Structure Treats Your Time in the Home
Lead with the shape that fits your timeline. Here are the four, side by side. All of them are arranged through wholesale lenders, subject to program guidelines and full underwriting.
| Option | Repayment | If you leave early | Credit floor |
|---|---|---|---|
| Grant (2% or 3.5% of price) | — | Nothing owed | 620 |
| Forgivable second (3.5%) | Forgiven after 36 or 60 on-time payments | Unforgiven balance is at risk | 640 |
| Repayable second (3.5% or 5%) | Monthly payment, balloon in year 10 | Balance due on payoff | 660 |
| Refinance-cost second (1% to 3.5% of balance) | Same as repayable | Same as repayable | 660 |
The grant: nothing to repay
The grant is 2% or 3.5% of the purchase price, released at closing. There is no lien, no payment and no interest. Because nothing is owed, there is no stay period attached to the money. The federal consumer-finance regulator notes that many programs offer assistance usable with an FHA loan, and it points buyers to local housing counselors.
The grant pairs with an FHA first lien. Eligibility is any one of the following: household income at or below 140% of area median income, or a qualifying category. Those categories include first responders, educators, medical workers, civil servants, military personnel, first-time buyers, and buyers in underserved census tracts. An HUD-approved homebuyer education course is required. The grant is not offered in Washington.
For a buyer who expects to move in a few years, this is the cleanest fit. Not free money in the loose sense. Just no repayment obligation attached.
The forgivable second: the clock matters
Leave before the clock runs out and you should expect the remaining balance to matter at sale or payoff. Programs of this kind often handle early exits differently, so confirm the exact terms in the note before you sign.
Picture a buyer taking a job transfer who expects to be in the home about two years. On a 36-payment version, that buyer would be sitting short of forgiveness. On a 60-payment version, further short. That buyer should compare the grant first.
The repayable second: a loan, plainly
The repayable second is 3.5% or 5% of the lesser of price or appraised value. At 5%, it also covers closing costs and prepaid items. It is a real loan. It carries interest, a monthly payment, 30-year amortization and a balloon due in year 10. It has its own disclosure at closing.
Is there a minimum stay? No. But the balance comes due when you sell or refinance, and the payment counts in underwriting. For a short-horizon buyer, the question is not whether you can leave. It is what comes out of your sale proceeds when you do.
Do You Have to Live in the State First?
Not for the options described here. They attach to the first-lien purchase rather than to a prior residency test. Some public programs do add their own rules about where you must buy or how long you must have lived there. Those belong to the public program, not to the wholesale options. If a program you are considering mentions residency, ask whether it means before applying or after closing.
The practical point for movers: first-time buyer status is not required. No option in the network requires it. A repeat buyer relocating from another state is eligible on the same terms, subject to the income test or category on the grant.
The Owner-Occupancy Rule Is the Real Constraint
Every option is for an owner-occupied primary residence. That means no second home, no vacation home and no rental, ever.
This is where relocation gets complicated. The FHA first lien expects you to move in and live there as your principal residence. Commentary on the FHA handbook describes a rule to occupy promptly and intend to stay for a period, and notes that FHA generally allows one principal residence per borrower, with exceptions for circumstances such as a job relocation. The handbook text itself should be confirmed with your lender. Do not rely on a summary of it.
If you buy, move in, then relocate and keep the house as a rental, expect the assistance terms to react. For a second lien, ceasing to occupy as a primary residence is a typical trigger for repayment. HUD allows approved nonprofits and governmental entities to provide secondary financing on FHA loans when it is secured by a second lien, so the lien language matters.
Rental income is a separate financing topic and outside this article. Assistance is for the home you live in.
Which First Lien, and What It Means for a Mover
FHA is the base for most of these files. It requires a 3.5% minimum investment, which is 96.5% first-lien leverage. The upfront mortgage insurance premium can be financed into the loan. Annual mortgage insurance varies by tier. For 2026, one-unit FHA loan limits run from $541,287 to $1,249,125 by county.
USDA is the other common first lien. It also requires the loan to be for your principal residence, and a USDA guaranteed refinance cannot absorb a down payment assistance second, which has to be paid off first. That matters if you plan to refinance after you settle in.
The forgivable and repayable seconds also pair with HUD-184. Be careful here: the Section 184 program guarantees loans but does not itself provide down payment assistance. Any assistance with that loan comes from a separate provider, so its terms are that provider’s terms.
Three Relocation Scenarios
These use percentages and plain words only. They are modeled, not real files.
The job-transfer buyer. Moving for work, plans to stay three to five years. The grant fits if the income test or a category applies. If not, a forgivable second at 36 payments may reach forgiveness by year three. A 60-payment version may not.
The remote worker. Relocating by choice, flexible on timing. Thin savings, credit in the 660 range. The repayable second at 5% covers down payment and closing costs. The trade is a monthly payment and a year-10 balloon. This buyer should plan on staying put or accepting that a sale triggers payoff.
The buyer who may move in two years. The grant is the first thing to test. If it is unavailable, weigh whether any second lien makes sense. A smaller assistance amount with nothing to repay beats a larger one that comes due at an unplanned sale.
What the File Needs
Assistance does not change the basics of a consumer mortgage. A few items matter more for movers:
1. An application and an automated underwriting finding. The second-lien options follow the AUS result, and manual underwriting is allowed on the forgivable second but not on the repayable one.
2. Homebuyer education for the grant. The borrower pays up front and the cost is credited back at closing.
3. Employment and income documents that match the move. A transfer letter or offer, plus current pay records, should line up with where you will live.
4. A clear occupancy plan. Your closing date and move-in date should not leave a gap the lender has to question.
5. Payment treatment. A repayable second’s payment counts in the total. USDA asks lenders to enter a second lien’s payment in its underwriting system, and DPA funds are not treated as your own funds.
Nothing stacks. The assistance cannot be combined with another assistance program, and a mortgage credit certificate is not allowed with the second-lien options.
Common Mistakes
- Assuming “no payment” means “no repayment.” A deferred or forgiven structure still has trigger events.
- Treating the grant and the seconds as the same thing. One is nothing to repay. The others are liens.
- Planning to rent out the home after the move. Assistance is tied to primary residence use.
- Skipping the education course. The grant requires it.
- Waiting to ask about early-exit terms. Ask before closing, in writing.
When Assistance May Not Fit
If you expect to sell within a couple of years and cannot qualify for the grant, a second lien may cost you more than it saves. A plain FHA purchase with your own funds avoids the lien entirely. Compare the whole picture, not just the cash needed at closing.
If your timeline is uncertain, the grant is the shape that leaves the most room. Details change by program, and every file is underwritten individually.
Frequently Asked Questions
Can I sell early without penalty?
With the grant, nothing is owed because nothing was lent. With a forgivable second, an early sale before the 36 or 60 payments are made leaves the lien in play. With the repayable second, the balance is due when you sell or pay off. Read the note before closing.
Do I need to be a first-time buyer if I am moving?
No. Repeat and move-up buyers qualify. First-time status is only one of the grant’s qualifying categories, and the second-lien options do not require it. The USDA program is also not limited to first-time buyers.
Can I keep the house as a rental after I move?
No. The assistance is for an owner-occupied primary residence only. Moving out and renting it is the kind of change that can trigger repayment on a second lien, and it can conflict with the first mortgage’s occupancy rule.
Does assistance from another state transfer with me?
No. Each program has its own rules and its own funding. Assistance cannot be combined with another assistance program either, so you apply fresh for the home you are buying.
Is there an income limit?
Only on the grant, and only if no qualifying category applies: 140% of area median income. The second-lien options carry no income limit beyond USDA’s own on a USDA first lien. Subject to program guidelines and full underwriting.
If you are buying a primary home and want to see whether a down payment assistance option fits your file, Lendmire can help you compare the grant, forgivable and repayable structures alongside an FHA, USDA or HUD-184 first mortgage. Start with Lendmire’s down payment assistance programs page.
Investors who want the broader program framework can review how DSCR loans work.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging government-backed purchase loans and the down payment assistance options that sit on top of them through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. HUD Nonprofit and Governmental Entities
This article is part of Lendmire’s First Time Home Buyer series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Does Down Payment Assistance Have an Income Limit? · Down Payment Assistance vs Gift Funds From Family · 5 Mistakes To Avoid As A First-time Home Buyer
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.