To ensure long term stability and affordability, the New York City NSP2 Buyers Assistance Program requires the buyer to occupy the home for 15 years, depending on the size of the NSP2 forgivable loan. This time period is the Affordability Period.
The NSP2 forgivable loan will be a lien on your property, in the second position to your primary mortgage loan. It will be secured through a New York City Department of Housing, Preservation and Development (HPD) note, mortgage, and conditional grant agreement.
In some circumstances you will be required to pay back all or a portion of the loan; for example, if you ignore the rental restrictions on multi-unit homes (see: Rental Unit Restrictions)
If you move, sell or refinance before the 15 year Affordability Period has expired, you may be required to pay back all or a portion of the forgivable loan.
When the requirements are met for the Affordability Period, the note expires and there is no longer an HPD lien on your home. That’s why it is called a “soft second” or “forgivable” loan (see Forgivable Loans)
