Florida Hometown Heroes: Lien Terms and Repayment Rules

Florida Hometown Heroes is not a forgivable grant; it is recorded as a 0% interest, non-amortizing, deferred second mortgage that must be repaid in full whenever you sell the home, refinance the first mortgage, transfer the title, or cease living in the property as your primary residence. Borrowers often confuse deferral with forgiveness, but Florida Housing Finance Corporation requires full repayment of the principal balance at closing if any of these triggering events occur before the 30-year maturity date.

Understanding how this lien operates is vital when weighing different types of assistance for your purchase.

The legal structure: 0% deferred second mortgage vs. Forgivable (conditions apply) loan

When you use the Florida Hometown Heroes Housing Program, administered by the Florida Housing Finance Corporation, the down payment and closing cost funds arrive as a second lien against your property. Unlike true grants or forgivable community seconds that diminish by a set percentage each year you remain in the home, Hometown Heroes does not forgive any portion of the principal over time. Forgiveness is conditional: The balance is typically forgiven only after you occupy the home as your primary residence for the program's full forgiveness period, and selling, refinancing, or moving out sooner can trigger recapture of part or all of the assistance. Program conditions apply and vary by program.

According to program guidelines published by Florida Housing Finance Corporation as of January 2026, the Hometown Heroes loan carries:

• Interest rate: 0% non-amortizing.
• Monthly payments: None required while you occupy the property.
• Term: 30 years, co-terminus with your first mortgage.
• Repayment trigger: Due in full upon sale, transfer of title, cash-out or rate-and-term refinance, payoff of the first mortgage, or failure to maintain primary residency.

Because it is non-amortizing, your balance remains unchanged.

Repayment triggers and subordination limitations

The lien terms dictate strict compliance with property occupancy and ownership status. Under CFPB mortgage disclosure rules, junior liens must be accounted for in payoff calculations during any future settlement transaction.

Selling the home

When you decide to sell your property in counties like Hillsborough, Duval, or Orange, your closing agent requests an official payoff statement from the servicer of the Florida Housing second lien. The entire original assistance sum is deducted from your gross sales proceeds alongside the first mortgage payoff. If local property values have not grown enough to cover both liens and transaction costs, you must bring funds to the closing table to satisfy the lien.

Refinancing your primary mortgage

A primary limitation of the Hometown Heroes lien is subordination. If market mortgage rates drop and you want to refinance your primary mortgage to secure a lower monthly payment, Florida Housing generally does not subordinate this second lien behind a new conventional or FHA loan. To complete a refinance, you must either pay off the Hometown Heroes second mortgage out of pocket or execute a cash-out refinance with enough equity to absorb both balances.

Rental conversions and occupancy changes

The Hometown Heroes program requires you to occupy the property as your permanent, primary residence. If your career moves you away from Miami-Dade, Palm Beach, or Lee County and you turn the property into an investment rental, the departure constitutes a default on the occupancy covenant. The full deferred balance becomes immediately due and payable upon vacating the home.

Income caps, assistance limits, and county realities

Assistance under Hometown Heroes is calculated as 5% of the total first mortgage loan amount, capped at a maximum dollar figure determined by state legislative appropriations.

Eligibility hinges on strict county-level criteria:

1. Employment: You must be employed full-time (at least 35 hours per week) by a Florida-based employer operating within the state.
2. First-time homebuyer standard: You cannot have held an ownership interest in a primary residence within the previous three years, verified via tax returns.
3. Income limitations: Household earnings cannot surpass county-specific caps established by Florida Housing. You can explore regional differences in our guide to Florida DPA income limits.
4. First mortgage requirement: The second lien must be paired with an approved Florida Housing first mortgage loan product (FHA, VA, USDA, or conventional).

High-cost housing markets across Florida present unique hurdles for buyers using this lien structure. You can evaluate your complete monthly exposure using our closing-cost estimator.

Comparing deferred seconds with wholesale amortizing DPA

Buyers evaluating their financing options often compare state-administered deferred seconds like Hometown Heroes with alternative structures. Down payment assistance offered by a wholesale lender partner, available through Simply Approved Mortgages, functions as a repayable fixed-rate second mortgage (terms, rates and APR vary by lender and program) rather than a deferred balloon lien.

A repayable second mortgage requires an additional monthly payment, which impacts your debt-to-income (DTI) ratio. However, because you make monthly payments toward principal, the balance steadily drops. If you refinance three years later, you owe substantially less than the starting balance. With Hometown Heroes, your deferred balance stays identical to day one. Review how different structures affect borrowing power on our down payment assistance overview.

Expert insight from Simply Approved Mortgages

"We routinely speak with Florida buyers who enter our pipeline believing Hometown Heroes works like an employer grant that quietly disappears after five years of living in the home. It does not. For buyers planning a shorter stay or anticipating an early refinance when market conditions change, an amortizing structure or standard financing can sometimes leave them with far more flexibility at the closing table."

Navigating the closing process and homebuyer education

To secure a Hometown Heroes loan, state regulations require every applicant to complete a homebuyer education course approved by the U.S. Department of Housing and Urban Development (HUD) or an approved housing counseling agency before loan documents are drawn.

Because state funding allocations for Hometown Heroes are finite, pools of money are released in legislative cycles and can deplete rapidly. When state allocations run out, origination pauses until the Florida Legislature approves new budgetary appropriations. Checking program availability and locking your reservation with an approved broker partner is critical before signing an executed real estate contract.

If you are ready to evaluate whether Hometown Heroes or another down payment assistance option aligns with your financial timeline, you can start the process by submitting an inquiry through our secure application portal.

Frequently Asked Questions

Is Florida Hometown Heroes ever forgiven after 5 or 10 years?

No. Florida Hometown Heroes does not offer loan forgiveness under any timeline. As structured by Florida Housing Finance Corporation as of January 2026, the Hometown Heroes assistance is a 0% deferred, non-amortizing second mortgage that retains its full original balance until paid off, refinanced, or transferred.

What happens to the Hometown Heroes lien if I refinance my primary mortgage?

If you refinance your first mortgage, the full original balance of the Hometown Heroes second mortgage becomes immediately due and payable. Florida Housing generally does not subordinate this second lien behind a new refinance loan, meaning your new loan must either provide enough cash out to satisfy the balance or you must pay it off using personal assets.

Do I have to make monthly payments on the Hometown Heroes assistance?

No. You do not make monthly payments on the second mortgage as long as you occupy the home as your permanent primary residence. The Hometown Heroes interest rate is 0%, meaning no interest accrues, and the principal remains deferred until a mandatory repayment trigger occurs.

Can I rent out my home after buying with Hometown Heroes?

No. Renting out your property violates the owner-occupancy covenant of the program. If you convert the home to an investment property or cease using it as your primary residence, the servicer can accelerate the note, causing the entire assistance amount to become due immediately.

What is the maximum assistance amount available under the program?

Under program guidelines from Florida Housing Finance Corporation as of January 2026, eligible Hometown Heroes borrowers can receive up to 5% of their first mortgage loan amount, capped at a maximum of $35,000.

Can I combine Hometown Heroes with other Florida DPA programs?

Generally, no. Florida Housing Finance Corporation does not allow borrowers to stack the Hometown Heroes second mortgage with other Florida Housing second mortgage products, such as the Florida Assist loan. However, buyers can use seller concessions and eligible gift funds alongside Hometown Heroes within standard agency guidelines.

Who qualifies as a first-time homebuyer under Florida Hometown Heroes rules?

A first-time homebuyer is defined as an individual who has not held an ownership interest in their primary residence at any point during the three years preceding the purchase contract, consistent with federal HUD standards. Certain exceptions apply for qualified veterans under the federal HEROES framework.

How do I check if program funds are currently available before applying?

Because Hometown Heroes relies on state budget appropriations that can be exhausted before the end of a fiscal year, availability fluctuates. Working with an authorized mortgage brokerage like Simply Approved Mortgages allows you to verify state pipeline capacity and reserve funding during your initial loan pre-approval.

Related Down Payment Assistance Resources

• down payment assistance calculator
• how down payment assistance works
• how to apply for assistance

Related reading

• Comparing Down Payment Assistance Structures
• Housing Agency Grants Occupancy Requirements Compliance

Sources

• HUD

This government publication is cited for general consumer education and for FHA/agency program background only. The repayable second mortgage available through Simply Approved Mortgages is a wholesale lender's product, brokered by Simply Approved Mortgages — it is not a grant, it is not the brokerage's own program, and it is not governed by HUD, FHA, or state housing finance agency rules; its terms are set by the wholesale lender. Simply Approved Mortgages (NMLS #2620881) is a mortgage broker and is not HUD, FHA, Florida Housing Finance Corporation, CHFA, or the CFPB, and is not affiliated with or endorsed by any government agency.