Two forgiveness clocks, and neither runs automatically
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
Louisiana is the generous one in this corner of the country. The thing to understand is that the two programmes forgive on completely different mechanics.
The two mechanics
| HomeStart Assist & Advantage | HomeStart Plus | |
|---|---|---|
| Shape | Cliff | Burn-down |
| Term | 60 months (5 years) | 120 months (10 years) |
| How it clears | Entire balance at the end | 1/120 each month |
| Interest | Zero | Zero |
| At year 3 | Nothing forgiven yet | About 30% gone |
LHC's wording on Assist and Advantage is identical: "zero interest, forgivable second mortgage; the entire balance will be forgiven at the end of 60 months if the borrower has maintained the required occupancy and no repayment event has occurred."
On Plus: "zero interest and forgiven monthly at 1/120 over 10 years of continued owner occupancy."
Which shape is better for you?
It depends entirely on when you might leave, and the answer flips.
If you are confident you will stay five years, the cliff is better. You clear the entire balance in half the time Plus takes, and you owe nothing from month 61 onward.
If there is real uncertainty, the burn-down is kinder. Leave a cliff programme in month 59 and you repay everything; leave a burn-down in month 59 and roughly half is already gone. On a $55,000 HomeStart Plus second, that difference is substantial.
In practice you rarely get to choose — the programmes serve different borrowers and different parishes. But it is worth knowing which clock you are on before you take the money, because the two behave nothing alike in year four. Which programme applies where.
★ "Conditional" is doing real work in that sentence
Forgiveness is not a countdown that runs on its own. LHC attaches two conditions to it:
- The borrower has maintained the required occupancy — the property must remain your owner-occupied primary residence.
- No repayment event has occurred.
On Plus the occupancy condition is explicit in the forgiveness formula itself: 1/120 a month "of continued owner occupancy." Stop occupying and the monthly credit stops with it.
So the practical rule is the same for all three programmes: this is your home, and it needs to stay your home. Selling, moving out, or converting the property to a rental ends the clock. The occupancy and property rules.
Louisiana against its neighbours
Worth stating plainly, because a buyer comparing states will otherwise assume these programmes are interchangeable. They are not remotely.
| State | Structure | What you repay if you stay |
|---|---|---|
| Louisiana | Zero-interest forgivable second | Nothing, after 5 or 10 years |
| Indiana | Non-forgivable, deferred, no payment | All of it, whenever you sell |
| Alabama | Amortizing second at your first mortgage's rate | All of it, plus interest, monthly for 10 years |
Three neighbouring states, three completely different answers to the same question. Louisiana's is the most generous structure of the three by a wide margin, and that is the honest headline — the programme's complications lie in its eligibility rules rather than in what the money costs.
One thing that is genuinely simple
All three seconds carry zero interest. The balance you take is the balance that sits there, and it does not grow while the clock runs.
That also means that in the worst case — you sell in year two — you repay what you borrowed and nothing more. A forgivable second that failed to be forgiven is still an interest-free loan, which is a considerably better outcome than the equivalent elsewhere. The separate question of recapture tax on Assist.
Frequently asked questions
When is Louisiana down payment assistance forgiven?
HomeStart Assist and HomeStart Advantage forgive the entire balance at the end of 60 months, if the borrower has maintained the required occupancy and no repayment event has occurred. HomeStart Plus is forgiven monthly at 1/120 over 10 years of continued owner occupancy.What happens if I sell before the LHC assistance is forgiven?
On HomeStart Assist and HomeStart Advantage, which forgive the entire balance at 60 months, nothing is forgiven before that point, so the full balance would be repayable. On HomeStart Plus the balance reduces by 1/120 each month, so the amount outstanding depends on how many months of owner occupancy have passed.Does Louisiana down payment assistance charge interest?
No. The second mortgages under HomeStart Assist, HomeStart Advantage and HomeStart Plus all carry zero interest, so the balance does not grow while the forgiveness period runs.Is LHC forgiveness automatic?
No, it is conditional. LHC requires that the borrower has maintained the required occupancy and that no repayment event has occurred. On HomeStart Plus the monthly forgiveness is expressly tied to continued owner occupancy.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal or tax advice. Louisiana Housing Corporation programme terms, income limits and purchase price limits are set by LHC and change; figures here carry the date we verified them against LHC's published documents. LHC assistance is a zero-interest forgivable second mortgage, forgiven only if occupancy and programme requirements are maintained. Federal recapture tax may apply on HomeStart Assist bond loans; consult a tax advisor. Loans are subject to borrower and property qualification.