The state of Indiana and community leadership in the many townships, and cities throughout the state understand the importance of home ownership in the building of more stable communities. For the first time home buyer Indiana has a lot to offer by way of incentives, programs, and grants to help you get the home of your dreams – or at least a home that may someday become the home of your dreams. This overview includes a few statewide programs followed by two city specific first time home buyer programs.
What Is The Homeownership Opportunities Program (HOP)?
HOP is available through the Federal Home Loan Bank of Indianapolis (FHLBI). There are strict eligibility requirements for homebuyers to receive up to $10,000 worth of assistance that is available through the HOP program, including the following:
- Program is only available for first time home buyers.
- Buyer’s income must be at or below 80 percent of the area median income.
- Total house debt may not account for more than 35 percent of buyer’s gross income.
- Buyers must be able to contribute a minimum of $1,000 of personal funds toward the purchase of their home.
- Program participants must retain ownership of their home for at least five years.
- HOP participants must complete state HUD approved counseling prior to the home purchase.
In addition to the HOP program available, FHLBI offers homeowner rehabilitation program (NIP) to help rehabilitate existing homes and accessibility modifications program (AMP) to modify owner-occupied homes to accommodate the disabled or the elderly.
What Is The Affordable Home Program?
The Affordable Home program allows first time Indiana homebuyers to obtain Federal Housing Administration (FHA) loans at interest rates that are lower than the average market value. Buyers must meet certain income qualifications in order to qualify for these lower interest rates and they must either provide their own down payments or receive down payment assistance from FHA approved sources.
In order to qualify, homebuyers must either be purchasing their first homes or purchasing homes in specifically targeted communities, have a minimum credit score of 660, and cannot be combined with the Mortgage Credit Certificate.
What Is The Mortgage Credit Certificate (MCC) Program?
The MCC program gives qualifying Indiana homebuyers the opportunity to receive tax credits for amounts between 20 and 35 percent of the interest they pay on their mortgages each year. The numbers vary according to the loan amount. The tax credit can be claimed for as long as the home remains the buyer’s primary residence. The maximum yearly tax credit is $2,000. Over the course of a 30-year loan the tax credit can be substantial.
The City of South Bend
South Bend, Indiana’s Community Homebuyers Corporation (CHC) offers assistance to first time homebuyers. The program identifies a few potential exceptions to the first time rule, however, to include homebuyers who meet the following conditions:
- Have previously owned a mobile home.
- Have been displaced from their homes due to a legal situation such as divorce.
- Have relocated to South Bend and never owned a home in the area.
- Have no owned a home within the past three years.
- Have a past foreclosure due to extenuating circumstances.
In order to qualify for the CHC program, prospective home buyers must have a household income that doesn’t 80 percent of median (once adjusted for household size). You must also complete credit counseling services, in person, through a HUD-approved counseling agency. Then you must show cash reserves of at least $2,000 and purchase a home within South Bend city limits.
The purpose of this program is to boost home ownership within South Bend by assisting lower income families in their efforts to achieve the dream of home ownerships. The belief is that the community will be strengthened by bringing more home owners into the community. The more people living in the homes they own, the stronger the community will become. The ultimate goal is to reduce crime and increase the value of properties throughout South Bend with programs like this.
The City of Bloomington
Bloomington, Indiana offers a similar program, the Housing and Neighborhood Development (HAND) Department’s Home Buyers Club. The club meets on two consecutive Saturdays offering a specific course of educational topics designed to assist first time home buyers. Those who graduate the program may qualify for up to $5,000 to assist them with their down payment and closing costs.
Some of the topics offered during the Home Buyers Club meetings include:
- Developing a Savings Plan
- Credit Issues
- Working with Realtors
- The Importance of Home Inspections
- Finding the Right Mortgage
- Maintaining Your Home to Protect Your Investment
There are even topics to address whether home ownership is the right choice for you now and helping you create a household budget to accommodate your efforts to purchase a home.
Home Buyers Club assistance is only available to first time homebuyers who meet special income and other requirements. Class sizes are also limited. The earlier you register the better.
Being a first time home buyer certainly has its advantages. These incentives, tax credits, and grants are only available for that first purchase so choose wisely. Consider your home an investment and invest in neighborhoods that are poised for growth and/or renewal.
Conduct thorough inspections of the home and enter into the purchase knowing the risks and repairs that need to be made or adjust your bid on the home to accommodate these repairs.
Finally, make sure the neighborhood where you’re buying your home meets your needs now. Families with young children will want neighborhoods where children can play safely, for instance. Seniors purchasing a first home may be more interested in community centers, community gardens, and easy access to health care providers.
Above all, make sure the home you have is one that meets your current needs and offers opportunities for growth and development over the years. After all, a home is a 30-year investment for most people. You’ll want to take steps now to make sure your home investment is one that is well worth your while.
2 Point Highlight
For the first time home buyer Indiana has a lot to offer by way of incentives, programs, and grants to help you get the home of your dreams – or at least a home that may someday become the home of your dreams.
These incentives, tax credits, and grants are only available for that first purchase so choose wisely.
