Forgivable PATH seconds give you 3.5% help with no monthly payment on the aid layer and a 3- or 5-year forgiveness clock. Repayable seconds can go up to 5%, require a monthly payment, and run on a 10-year amortizing or 10-year balloon schedule.
Both structures are second liens behind your PATH FHA or USDA first mortgage — the tradeoff is monthly payment vs maximum assistance.
| Feature | 3.5% forgivable | Repayable second |
|---|---|---|
| Assistance amount | 3.5% | 3.5% or 5% |
| Monthly payment on 2nd | None | Principal & interest required |
| Term structure | 3-year or 5-year forgiveness | 10-year amortizing or 10-year balloon |
| Minimum credit | 640 | 660 |
| Best for | Lower payment, plan to stay through forgiveness | Need up to 5% help and can carry a second payment |
The 3.5% forgivable second does not add a principal-and-interest payment. You still pay your PATH FHA or USDA first mortgage, taxes, insurance, and any mortgage insurance as required.
Stay in the home as your primary residence through the full forgiveness term and the assistance balance can be forgiven. Early sale, refinance, or first-mortgage payoff before the term ends makes the remaining unforgiven balance due.
Both repayable options are fixed-rate second mortgages set by Luminate Bank and disclosed at lock. The only difference is how the payment is calculated.
Fully repaid over 10 years with a higher monthly payment and no balloon if you pay on schedule. Strong fit when you want a clean payoff timeline and can handle the payment.
Payments calculated on a longer 20- or 30-year amortization for a lower monthly payment, with the remaining balance due as a balloon at the end of year 10.
Repayable rates are typically slightly higher than the 30-year average fixed rate and are confirmed when Ryan and Steve quote your scenario.
Related Luminate Path guides to help you pick the right second lien.
Program overview — FHA/USDA first plus four second-lien options.
3.5% forgivable vs up to 5% repayable in real dollars.
Why forgivable starts at 640 and repayable at 660.
Forgiveness schedule and early payoff rules.
Full guide — product cards for all six PATH options.
Compare PATH with Chenoa, Hoosier Homes, and more.
PATH FHA first mortgage details and FHA guidelines.
Ryan & Steve will compare monthly payment, cash-to-close, and forgiveness risk against your credit and how long you plan to stay.
Luminate Path programs are subject to borrower qualification, property eligibility, and lender approval. Rates, terms, and program availability may change without notice and are not available in all states. This page is educational — your scenario is underwritten against current guidelines.