Down payment and mortgage programs

With the Indiana housing market facing historically high house prices and continued high demand despite the COVID-19 pandemic, first-time home buyers may not know how to afford a new home.

These programs are designed to make home buying more affordable by providing down payment assistance or a tax credit to eligible buyers.

Indianapolis Housing Agency

Unlike most down payment assistance programs for first-time or low-income homebuyers, the Hoosier Homes program allows applicants who earn a combined $ 114,240 or less per year to qualify.

The Hoosier Homes initiative will provide up to 6% down payment assistance on Marion County homes with purchase prices of up to $ 450,000.

“It’s one more tool in the community’s tool belt” to encourage home ownership, said Christopher Walsh, deputy executive director of the Indianapolis Housing Authority. “The Indianapolis Housing Authority does not want to see itself as strictly providing government assistance to very low income people exclusively for rental purposes. We want to think about how we can serve the community more broadly, and home ownership. ownership is a big part of that. “

Through this program, homebuyers can receive 3% to 5% assistance on the down payment or closing costs. You may also receive an additional 1% aid if you are a Kindergarten to Grade 12 teacher, first responder, in the U.S. military, or a veteran, or if you live in Marion County and earn less than $ 40. $ 800 per year.

The assistance comes in the form of a second, three-year, interest-free reclaimable lien on the loan.

“Some people just can’t afford, especially in today’s market, the huge boom in home prices,” said Jed Guenther, senior vice president of Bayview Loans, a lender participating in the program. He added that the program helps cover some of the most important costs of home ownership: the down payment and closing costs.

Other eligibility conditions:

  • Must have a minimum FICO credit score of 620 and a debt to income ratio of up to 50%
  • Must occupy the unit as a primary residence within 60 days of closure
  • Must purchase one of the following types of homes: single family, townhouse, condominium or duplex
  • Must be a new purchase (no refinancing)
  • Home can be in Marion County or Fort Wayne

Find out if you are eligible and begin the application process at the Housing Resource Hub, a non-profit partner of the Indianapolis Housing Authority.

First Place Federal Housing Authority Program

Looking to buy your first home? Through the First Place program, homebuyers who meet certain eligibility requirements can receive down payment assistance of up to 6% of the purchase price or appraised value of the home, depending on the amount. lower.

Homebuyers will not have to make monthly mortgage payments or interest on this assistance.

As long as homebuyers do not sell or refinance the home within nine years of the closing date, the full amount of down payment assistance will be forfeited.

Otherwise, if they sell the house within nine years, make a profit on the sale of the house, and if the household income for the year is more than the adjusted qualifying income for the year for a family of that size, they will have to repay the original loan amount or half of the gain on the sale of the house, whichever is less.

Main eligibility conditions:

  • Must be a first-time buyer unless you are purchasing a home in a designated target area, a list of counties including Shelby County, or a qualified census tract in certain counties
  • Must have a minimum FICO credit score of 640 with a debt-to-income ratio below 45% or a minimum score of 680 with a debt-to-income ratio above 45% but below 50%
  • Obey the income limits, available on the Indiana Housing Authority website. They vary by county. In Marion County, you cannot earn more than $ 81,600 if you have a household of one to two people, unless you live in a designated census tract, in which case you can earn up to 97,920 $ for a household of one to two people. The income limit for three-person households is $ 93,840. If you live in a designated census tract, it is $ 114,240.
  • The house must be your primary residence

Program of the Federal Housing Authority at the following house

Even if you are not a first-time home buyer, you can get help with the down payment on your new home through the Next Home program. This 30-year, fixed-rate program will help homebuyers put down a down payment on a single-family home. Homebuyers can receive assistance of up to 3.5% of the purchase price or the appraised value of the home, whichever is less.

It can be used in conjunction with the Mortgage Certificate of Credit, which is described below.

Main eligibility conditions

  • Obey the income limits, available at the Indiana Housing Authority. The income limits and credit score requirements are the same as for the First Place program.
  • The house must be your primary residence

Mortgage loan certificate

First-time buyers and individuals purchasing single-family homes in the state of Indiana can claim a federal income tax credit that helps the borrower reduce the amount they owe in taxes federal income. If you are not a first-time home buyer, you may still qualify if you are a veteran or purchasing a home in a designated target area.

Homebuyers can apply for the mortgage credit certificate through a participating lender when they apply for a loan. The mortgage credit certificate can only be used by individuals who do not already have a mortgage on the home in question.

The tax credit can be used in conjunction with the Next Home program.

Main eligibility conditions:

Contact IndyStar reporter Ko Lyn Cheang at [email protected] or 317-903-7071. Follow her on Twitter: @kolyn_cheang.

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About Matthew R. Dailey

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