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Deferred Payment Loan

Low cost public loans are offered by certain state governments and many local governments. Deferred payment loans (DPL) are used to pay for home improvement or repairs. A deferred payment loan is a type of reverse mortgage that provides a one-time, lump sum payment that the borrower is not obligated to pay back as long as they remain in the home.

To find a deferred payment loan, you can contact your city or county housing department, state housing agency, community development agency, or office on aging. Eligibility requirements vary, depending on the provider. Deferred payment loans are typically intended more homeowners with low or moderate incomes. Other eligibility requirements often relate to age, disability, location, and the value of the home. Even if you are approved for a deferred payment loan, there may be restrictions on the types of home improvements for which you are permitted to use the loan. Some are limited to major repairs, while others are limited to improvements that will create better accessibility for disabled persons.

Deferred payment loans are desirable due to their low cost. These loans usually do not carry an origination fee or closing costs, and charge little to no interest. Some deferred payment loan programs will not require the borrower to repay the loan if they remain in the home for a certain amount of time.