A forgivable second lien is a second mortgage that funds your down payment and then gets forgiven if you stay in the home through the required occupancy period. For HOME Plus and for Pima Tucson Lighthouse (when a funding round is open), that's five years: Lighthouse assistance becomes a grant after five years in the home, and HOME Plus assistance taken under its forgivable option is forgiven after 60 months. The Arizona Industrial Development Authority describes that option as a deferred soft second with no interest and no payment, and nothing is forgiven before the 60-month mark. HOME Plus also has a non-forgivable option, which is repaid. The Pima Tucson Homebuyer's Solution is built differently: the Housing Innovation Hub describes it as a silent second lien with no monthly payment, and its note, not a forgiveness clock, decides when it is due.

What Is a Forgivable Second Lien? Tucson DPA Explained

Lighthouse availability: Pima Tucson Lighthouse is released in limited funding rounds that close once the money is committed. When we checked the Pima Tucson Housing Innovation Hub in October 2026, it listed the latest round as closed. Lighthouse details in this article describe how the program works when a round is open, and each round's lender guidelines set its eligible loan types. Ask us whether a round is open before you plan around it; the Pima Tucson Homebuyer's Solution and Home Plus Arizona remain available in the meantime.

When people first hear about down payment assistance, a common reaction is: "What's the catch?"

It's a fair question. Help you might never repay sounds too good to be true. So let's talk about how DPA actually works, specifically the forgivable second lien structure used by Tucson-area programs.

What Is a Second Lien?

When you buy a home with a mortgage, the lender has a "lien" on your property. This means they have a legal claim to the home until you pay off the loan.

Your primary mortgage (the loan you make monthly payments on) is the first lien. If you default, this lender gets paid first.

A second lien is an additional loan secured by the same property. In the case of DPA, this second lien is the down payment assistance itself.

So when you use DPA, you actually have two loans:

1. Your primary mortgage (first lien) that you make monthly payments on
2. The DPA (second lien) that sits behind it

What Makes It "Forgivable"?

Here's where it gets good.

A forgivable second lien means the balance can be forgiven, meaning you don't have to pay it back, if you meet certain conditions.

For Tucson DPA programs, the primary condition is this: stay in the home as your primary residence for the required forgiveness period.

Both the Pima Tucson Lighthouse and Home Plus Arizona programs offer forgivable DPA. HOME Plus also has a non-forgivable option that gets repaid, so confirm which version you're using. Here's how the forgivable versions compare:

Program	Forgiveness Period	How It Works
Pima Tucson Lighthouse	5 years in the home	Converts to a grant at the five-year mark
Home Plus Arizona	5 years from the loan date	Forgiven in full on the fifth anniversary; nothing earlier
Pima Tucson Homebuyer's Solution	Set by its note	Silent second, no payments; payoff terms set by its note and confirmed for your option

How Forgiveness Works

Neither of Tucson's two main programs chips away at the balance year by year. Here's how a five-year schedule like HOME Plus plays out:

• Before the fifth anniversary: the full assistance amount stays on the lien
• On the fifth anniversary: the entire balance is forgiven at once

If you stay in the home for the full 5 years, the entire DPA amount is forgiven. You owe nothing.

What Happens If You Sell or Refinance Early?

Life happens. Sometimes you need to sell or refinance before the forgiveness period ends.

If you do, the assistance is generally repaid from the sale or refinance proceeds. With HOME Plus that means the full amount until the fifth anniversary has passed.

Example: You received $15,000 in HOME Plus assistance. Three years in, a job transfer means you have to sell.

• Amount forgiven so far: $0
• Balance due from the sale: $15,000

That balance comes out of your sale proceeds rather than your pocket, as long as the home has held its value. Staying past the fifth anniversary would have erased it entirely.

Is the Second Lien Really "Silent"?

You'll sometimes hear forgivable second liens called "silent seconds." This refers to the fact that:

• No monthly payments required. You only make payments on your first mortgage.
• It sits quietly in the background while you live in the home.

The lien is recorded on your property's title, so it's not invisible. But from a cash flow perspective, it doesn't affect your monthly budget.

Why Do Programs Structure DPA This Way?

Forgivable second liens serve a purpose beyond just helping you buy a home.

Encouraging stability: By requiring you to stay in the home for several years (five, for Lighthouse and Home Plus), programs promote homeowner stability rather than quick flips.

Protecting the investment: DPA programs want to create long-term homeowners, not speculators who take the assistance and immediately cash out.

Keeping funds circulating: If you repay early, those funds can help other buyers. If you stay and build equity, you become a successful homeownership story.

For most buyers, this structure is a non-issue. The majority of first-time buyers stay in their homes at least 5 years anyway.

Common Questions About Forgivable Second Liens

Does the second lien affect my credit? The lien is recorded but typically doesn't show as a traditional debt on your credit report since there are no monthly payments.

What if I refinance my first mortgage? Refinancing typically triggers repayment of the unforgiven balance, just like selling. However, some programs allow subordination (keeping the second lien in place) in certain circumstances. Check with your lender.

What if I need to move for work? You'd repay the unforgiven balance from your sale proceeds. Some programs have hardship provisions, but they're case-by-case.

Can I pay off the second lien early? Usually yes, but there's rarely a reason to. There's no monthly payment on it and it's forgiven over time, so paying it off early mostly drains cash you could keep.

What if my home loses value? If you sell at a loss and can't fully repay the second lien, this becomes more complicated. Most programs have provisions for this scenario, but it's relatively rare in appreciating markets like Tucson.

The Bottom Line

A forgivable second lien is the mechanism that makes DPA possible. You receive assistance at closing, it sits behind your primary mortgage with no payments, and it forgives over time as long as you stay in the home.

If you plan to stay through the forgiveness period, odds are you'll never repay it. If a move might come sooner, ask how much would be due at each stage before you sign.

The "catch"? You have to actually live there. For buyers who are genuinely looking for a place to call home, that's no catch at all.

Ready to Use DPA for Your Tucson Home?

If the forgivable second lien structure makes sense to you, the next step is checking your eligibility.

Take our quick qualifier quiz to see if you qualify for Tucson DPA programs, or call us at (480) 420-4918 to talk through your situation.

Explore all available DPA programs and find the one that works for you.