The concept of a forgivable loan appears to be related principally to federal requirements in the HOME program that tie the duration of home affordability to the level of HOME funds invested. At a minimum, the HOME program requires owner-occupied units financed with HOME funding of less than $15,000 to be affordable for five years. Owner-occupied units financed with HOME funds of between $15,000 and $40,000 must remain affordable for at least 10 years, and those with more than $40,000 of HOME funds must be affordable for at least 15 years. (24 CFR 92.294.) Jurisdictions have the option of forgiving a portion of the assistance each year or waiting until the end to forgive it all at once.

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