Forgivable Loan

The Forgivable Loan Program is a five-year forgivable loan, which employees who meet eligibility requirements  can borrow up to $7,500 (with no interest and no monthly payments) for use towards home improvements or to offset closing costs.  

For each year of the five years, one-fifth of the loan ($1,500) will be forgiven until the loan balance is zero at the end of the five-year period, provided that  the employee has maintained the property as his or her primary residence.

Other Important Considerations

• One- or two-unit primary residences must be located within geographical boundaries .

• The forgivable loan can subordinate to a 15- or 30 year fixed rate, rate/term refinance or purchase first mortgage. The Forgivable Loan can also be a third mortgage with an exception granted by the University.

• A borrower must meet minimal credit requirements to qualify for a forgivable loan.  The availability of forgivable loans is subject to annual funding limitations.  The final decision regarding eligibility in the Forgivable Loan Program is at the discretion of Penn Home Ownership Services.

• The forgivable loan has a forgiveness period of five years.  The employee will need to stay in the home as his or her primary residence for a total of five years, at the end of which time the loan will be completely forgiven.  There will be no payments or interest during the five-year forgiveness period, should the home remain as your primary residence.

• The forgivable loan will be a lien against your property and will be recorded with the City of Philadelphia.  After a period of five years, the lien will be removed. 

• A deed restriction will be placed on the property in perpetuity that limits the property use to resident, single-family, owner -occupancy only.  With this restriction, the property cannot be used or converted to use for rentals (Exceptions are made for duplexes or a temporary leave due to University-related sabbatical). The deed restriction stays permanently with the property and will transfer to future owners (e.g. in the event of a sale).