What happens to your DPA when you sell or refinance? No surprises — here's how it works.

Down payment assistance is one of the best tools available to first-time buyers — but I want you to go into it with clear expectations. That includes understanding what happens down the road if you sell, refinance, or eventually move on. There are no hidden traps here, but there are things worth knowing up front.

If you received a grant

True DPA grants — money that comes with no repayment obligation — are usually gone once you've met the program conditions. If the grant requires you to live in the home for a minimum period and you've done that, the money is simply yours. Nothing to repay at sale or refinance.

If you sell before meeting the minimum occupancy requirement, you may owe back some or all of the grant. Read your grant agreement and know your timeline.

If you received a deferred second loan

A deferred loan comes due when you sell, refinance, or pay off your first mortgage — whichever happens first. The amount owed is typically the original balance (no interest for most programs). This repayment comes out of your sale proceeds or is folded into a refinance.

This isn't a penalty — it's just the loan coming due. You're essentially getting an interest-free loan that you repay later from the equity you've built. The math usually still works strongly in your favor.

If you received a forgivable loan

A forgivable loan reduces — or disappears — over a set period. If you sell before it's fully forgiven, you'll repay the remaining unforgiven balance. If you've lived in the home long enough for the full forgiveness period to pass, there's nothing left to repay.

The recapture tax: what it is and when it applies

Some bond-funded programs — including certain Oregon Bond loans — carry a federal recapture tax provision. This means if you sell the home within a specific window (typically 9 years), make a profit, and your income has increased above certain thresholds, you may owe a small federal tax on the gain. The recapture amount is capped at half the gain from the sale, and in practice very few sellers end up owing it.

Oregon Bond provides a specific recapture tax worksheet to help estimate exposure. I'll make sure you understand this before signing, so there are no surprises if you sell early.

The right question isn't "what if I have to repay it?" — it's "will I be better off having used it?" In almost every case, the answer is yes.

I go through these details with every buyer I work with before we finalize a DPA-assisted loan. You should fully understand every obligation you're taking on — and I make sure you do.