Is ‘Hometown Heroes’ Your Kryptonite?
Is “Hometown Heroes” actually kryptonite in disguise — The Part Nobody Tells You…
If you or a loved one is in the market to buy a home in Florida, chances are you’ve heard of the Hometown Heroes program. It gets tossed around a lot — and while it can be a helpful tool for some, there’s a side to it that doesn’t always make its way into the conversation. Before you jump in, here’s what you should know to make a fully informed decision.
Hometown Heroes is a Down Payment Assistance (DPA) program. For those who are employed full time by a Florida based employer in these occupations: Healthcare worker, school staff member, first responder, public safety, court employee, child care worker, active military and veterans employed full-time in Florida. In plain English: it’s a loan. Not a grant, not free money falling from the sky. It’s structured as a second mortgage on your home. It doesn’t gather interest and it’s deferred for 30 years — sounds great, right? But here’s the kicker: you can’t pay it down early in small chunks. When it comes due (when you sell, refinance, or move out), it’s one big lump sum waiting for you to be deducted at closing.
Now, here’s where the rabbit trail gets interesting…
You’ve probably also heard the phrase “date the rate, marry the house.” (Which honestly makes me cringe, but that’s a chat for another day.) The idea is that you can refinance later when rates drop. But if you’ve taken Hometown Heroes, you’ll have to repay that second mortgage first — yes, even if you’re doing a cash-out refi to tap into your equity.
Let’s say your home has built $50,000 in equity, and you took out $35,000 through Hometown Heroes. When you refinance, that $35,000 gets paid off first. Meaning you’re left with $15,000 instead of the full $50,000 you might have been counting on. Surprise!
And what about selling your home?
The days of staying in one house for 15+ years are kind of behind us. Most folks move every 6-8 years — sometimes sooner. Life happens. Maybe a new job, a growing family, or you just find out your neighbor’s a drummer with insomnia. If you need to sell in, say, 2 years and perhaps home values have dropped, you’ll not only deal with a possible market loss but also owe that Hometown Heroes loan at closing. It can stack up fast and become a financial burden when you least expect it.
So, is it all bad?
Not necessarily. For some buyers in very specific situations, it’s a lifeline. But it’s not a one-size-fits-all solution, and it shouldn’t be treated like one. Sadly, some lenders and agents will gloss over the fine print just to close a deal or truly don’t understand all of the potential implications — and that’s not okay.
The takeaway:
If you’re considering using Hometown Heroes, please connect with a local, trusted lender who will lay out all the pros and cons clearly. (If you don’t know one, I know a few good ones who won’t sugarcoat a thing.) At the end of the day, it’s your home, your money, and your future. YOU deserve the FULL picture before making big decisions — not a sales pitch.
Knowledge is power, my friends.
Ask the hard questions. Get the full story.
And make sure your “hero” program isn’t secretly your kryptonite. 🦸♀️