Last Updated on August 23, 2023 by Hannah Stevens
Mortgage Assistance for Homebuyers in Indiana
The Indiana Housing & Community Development Authority created the Indiana Home Solution (IHS) Program to make it more affordable for people to finance a home. This program provides financial assistance for first-time homebuyers looking to purchase a home. However, they need help financially to pay the upfront costs, including the down payment and closing costs.
Eligible applicants may receive down payment assistance up to 6% of the purchase price, but not more than the appraised value, under the IHS program. These funds are for the down payment, closing expenses, and prepaids. This comes as a zero-interest loan with a 15 year affordability period. And with proration beginning in year 11 at 20%. Each year thereafter, an additional 20% is added to the loan until it is forgiven in year 15.
The IHS program is only for first-time homebuyers (except if they are buying in a targeted county/area), who have a fixed-rate FHA loan with a 30-year term. The applicants also need at least a credit score of 660. Additionally, there is a $100 reservation fee, and income and acquisition limits apply.
The Homeownership Opportunity Network (HON) created the First Time Homebuyer Program with the intention to increase homeownership opportunities for people in Gary. These people are those who can’t easily afford the initial costs of buying a home.
Eligible applicants can get down payment assistance up to 10% of the purchase price, or $10,000 (whichever is lower), if they are buying a house in a Target Area*. The amount of down payment assistance depends on the income of the applicant and the area median household income (AMI):
- 80-70% AMI: up to $4,000 in assistance
- 69-60% AMI: up to $5,000 in assistance
- 59-50% AMI: up to $6,000 in assistance
This program is only for first-time homebuyers who have never owned a home within the last three years, and who are purchasing a home located in a Target Area. All applicants must also complete the City of Gary Homeownership Opportunities Network Homebuyer Education Workshop, and any counseling sessions. Furthermore, completion certificates from other HUD-certified and approved agencies are accepted, provided they are valid within 12 months of the submission of an application.
- 1-person household: $40,800
- 2-person household: $46,600
- 3-person household: $52,450
- 4-person household: $58,250
- 5-person household: $62,950
- 6-person household: $67,600
The HUD funded Housing Choice Voucher (HCV) offers assistance for low-income families. This program pays participating property owners to cover the difference between rent and tenant payments. The HVC Homeownership Programs assists eligible families interested in homeownership use their allocated funds to purchase a home rather than renting.
The family needs to be a current HCV participant with the Indianapolis Housing Agency to qualify for the assistance. Moreover, they must be first-time homeowners, and have a minimum income of $15,000. These requirements guarantee that all participants have enough funds to cover homeownership costs not covered by the subsidy. They must also be “Full-time employed” for at least one year to qualify. However, welfare assistance can be used only for the elderly or disabled families.
HUD requires a minimum down payment of 3% of purchase price, and this must be paid with at least 1% from the family’s personal funds. The IHA also requires applicants to have a minimum of $3,000 in savings. All participants in the Family Self Sufficiency Program (FSS) are eligible for priority for participation in the Homeownership Program if their escrow balance meets or exceeds this minimum savings requirement.
In addition, any family that receives assistance must complete the First Time Buyers counseling sessions. They must also comply with the mortgage terms. Any changes, including sale or refinancing of the home, change income and household number, or changes in family’s ability to maintain the home must be reported to IHA.
Properties purchased using the HCV Homeownership Program need to be either a single-family residence or a single unit in a cooperative or condominium. It must also be either under construction or existing. Furthermore, an HCV Program inspector and an independent inspector appointed by the family must inspect the home. It must meet the General Home Inspection (GHI) criteria, and meet all Point of Sale (POS) inspections.
The HOPE of Evansville’s homebuyer assistance program matches down payment assistance for qualified borrowers who purchase a house within Evansville. This program helps prospective applicants find a way to afford their first home.
The applicant needs to qualify for and get a sustainable mortgage from a lender they choose. However, they must choose the one with no extra fees, high and/or variable interest rates, balloon payments, or irrelevant fees. Monthly payments, such as principal, interest, taxes, homeowner’s insurance, and private mortgage insurance, cannot be over 30% of their monthly gross income. Applicants will also need to provide proof of homeowner’s insurance listing the City of Evansville Department of Metropolitan Development (DMD) as a second mortgage holder before closing. Furthermore, the amount of the DPA is dependent on the applicant’s needs.
The minimum contribution toward their home purchase required for applicants is at least $1,000. The HOPE program matches this amount as needed up to a maximum of $10,000. Then, the minimum down payment assistance offered is $1,000. The applicants’ and HOPE funds may be used to pay down payment and/or closing costs. However, they may not be sufficient to cover total purchase costs. Applicants also cannot receive cash back at closing.
City of Gary Indiana First Time Home Buyer Down Payment Assistance
This program is offered by the Homeownership Opportunity Network. It assists borrowers with HOME program funds in the form of forgivable loans for principal reduction, downpayment, and closing costs when buying a home.
First Time Homebuyer Program makes use of HOME funds to provide assistance funds in the form forgivable loans to eligible applicants. You can also use the money to reduce your principal, pay down, or for closing costs. This will then help you offset some of your expenses. However, the amount of assistance each borrower gets is determined by their income. It can then be used to reduce principal, down payment, or closing costs. The assistance is given on a first-come basis and only once.
To be eligible for the First Time Homebuyer Program all applicants must meet certain criteria. However, all applicants must be first-time homebuyers, meaning they must not have owned a home for the past 3 years. Also, their household income must meet the program’s requirements (shown below). Additionally, all borrowers must complete the City of Gary HON homebuyer education workshop and a counseling session. Other HUD-approved agencies certificates may also be accepted.
To receive maximum down payment assistance, property must be of new construction if it is located within the designated Empowerment Zones or Target Areas.
- Empowerment Zone and Target Areas: Brunswick, Central/Midtown, Emerson, Horace Mann, Pulaski, Small Farms, and Tolleston.
- Target Areas for the Gary, Indiana Area: Midtown, Horace Mann/Downtown West, Aetna, and University Park (IUN/IVY Tech).
- 1 person household: $35,250
- 2 person household: $40,250
- 3 person household: $45,300
- 4 person household: $50,300
- 5 person household: $54,350
- 6 person household: $58,350
This programme is similar to the down payment First-Time Homebuyer Assistance Programs in Illinois.
Indiana Home Solution Program
In an effort to make home financing more affordable, the Indiana Housing & Community Development Authority created NextHome. This program provides financial assistance to qualified applicants who want to purchase a home, but cannot afford the down payment or closing costs. Then, these costs can quickly add up and people might find themselves stuck in a renter’s trap if they are unable to pay them.
The Next Home program provides down payment assistance for FHA mortgage borrowers from participating lenders. Conventional loans borrowers receive only 3 percent. But, this assistance is in the form of a deferred loan. It can then be forgiven completely after two years, and it comes with zero percent interest. Additionally, there are no monthly payments.
Next Home isn’t just for first-time homebuyers. There is no maximum purchase price, so it is open to all. To be eligible, applicants must also meet certain requirements. However, borrowers must have a minimum credit score of 660 and a mortgage from an IHCDA Participating lender. Framework is an online course that teaches homebuyer education. The Agency’s Single Family buying programs require that all homebuyers complete the Framework course in order to satisfy the Homebuyer Education requirement. Next Home participants receive $75 reimbursement for the course cost at closing. The income requirements of applicants are dependent on the type of mortgage, their county of residence, and the country in which they live.
Lake County Homebuyers Assistance Program
The Homebuyer Assistance Program aims to help households overcome this obstacle by providing assistance with closing costs, down payment, and fees. For closing costs, down payment and fees, the program provides assistance up to $5,000 for qualified households.
The Lake County Community Economic Development Department recognized that while many people can afford monthly mortgage payments they do not have the money to cover the upfront costs of buying a house. This program is the Homebuyer Assistance Program and it helps households to overcome this obstacle by covering closing costs, down payments, and fees.
Lake County Community Economic Development Department’s Homebuyer Assistance program provides assistance up to $5,000 for income-eligible applicants within the Entitlement Area. You can also use these funds to cover some or all upfront costs and significantly reduce the out-of-pocket expense.
Homebuyer Assistance Program is available for applicants whose annual household income falls below 80 percent of the area median, adjusted for family size, established by HUD.
- 1 person household: $36,350
- 2 person household: $41,500
- 3 person household: $46,750
- 4 person household: $51,900
- 5 person household: $56,100
- 6 person household: $60,250
- 7 person household: $64,400
- 8+ person household: $68,500
Are you interested in the First-Time Homebuyer Assistance Programs in Iowa?