What is the consequence if a borrower moves out and rents their property before the silent second lien is fully satisfied or forgiven?

The entire balance of the silent second loan often becomes immediately due and payable to the local housing agency.

Qualifying for SHIP assistance establishes a significant secondary debt obligation that runs concurrently with the primary mortgage. If the agreement stipulates that the property must remain the owner's primary residence for a specific duration—often until the lien is forgiven or satisfied—violating this covenant triggers severe repercussions. Should the owner vacate the home and begin renting it out before the terms are met, the contract typically mandates acceleration of the debt. Consequently, the outstanding, deferred principal balance of the entire silent second loan can become immediately due in a lump sum payment demanded by the administering local housing agency.