Indiana Next Home Program

The Indiana Next Home Program, offered by the Indiana Housing and Community Development Authority (IHCDA), is designed to help eligible homebuyers purchase a home by providing down payment assistance and affordable mortgage options. This program makes it easier for both first-time and repeat homebuyers to achieve their dream of homeownership.

Benefits

Provides down payment assistance of up to 3.5% of the home’s purchase price, reducing upfront costs for buyers.
Works with 30-year fixed-rate mortgages, offering predictable and stable monthly payments.
Supports first-time homebuyers and eligible repeat buyers who meet program requirements.
Allows buyers to pair the assistance with other IHCDA programs for additional financial support.

Eligibility Requirements

Applicants must meet income limits, which vary based on household size and the location of the property.
The property must be located in Indiana and used as the buyer’s primary residence.
A minimum credit score of 640 is required, with lender-specific underwriting standards also applying.
Debt-to-income ratios must align with program guidelines to ensure affordability and financial readiness.
Participants must complete a homebuyer education course to prepare for the responsibilities of homeownership.

Additional Information

The Indiana Next Home Program is a valuable resource for homebuyers looking to reduce the financial barriers to owning a home. By offering down payment assistance and affordable mortgage options, this program helps individuals and families achieve stability through homeownership while supporting the growth and development of communities across Indiana. Administered by the Indiana Housing and Community Development Authority, the Next Home Program promotes sustainable and accessible housing opportunities statewide.

Frequently Asked Questions About Our Program

What is the Indiana Next Home Program?

The Indiana Next Home Program, offered by the Indiana Housing and Community Development Authority (IHCDA), provides down payment assistance (DPA) to eligible homebuyers. This assistance aims to make homeownership more accessible by reducing the upfront costs associated with purchasing a home.

Who is eligible for the Next Home Program?

The program is available to both first-time and repeat homebuyers purchasing a primary residence in Indiana. Applicants must meet specific income limits, which vary by county and household size, and must have a minimum credit score of 640. Additionally, debt-to-income ratio requirements apply, with a maximum of 45% for credit scores between 640 and 679, and up to 50% for credit scores of 680 or higher.

How much down payment assistance is provided?

The Next Home Program offers down payment assistance of up to 3.5% of the purchase price for FHA loans. This assistance is provided as a second mortgage with zero interest and no monthly payments, and it is fully forgiven after three years, provided the homeowner does not sell or refinance the property during that period.

Are there purchase price limits for homes under the Next Home Program?

No, the Next Home Program does not impose purchase price limits, allowing buyers greater flexibility in choosing a home that meets their needs and financial situation.

Is homebuyer education required for the Next Home Program?

Yes, all borrowers are required to complete a homeownership counseling course to ensure they are well-prepared for the responsibilities of homeownership.

Can the Next Home assistance be used with different types of mortgage loans?

Yes, the program can be paired with various mortgage loan types, including FHA, VA, USDA, and conventional loans, offering flexibility to suit different borrower needs.

What happens if I sell or refinance my home before the three-year forgiveness period ends?

If the property is sold or refinanced before the three-year period concludes, the remaining unforgiven portion of the down payment assistance must be repaid at that time.

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Are there specific property types eligible under the Next Home Program?

Eligible properties include single-family homes, townhouses, condominiums, and certain manufactured homes, provided they will serve as the borrower's primary residence.

Is there a first-time homebuyer requirement for the Next Home Program?

No, the program is available to both first-time and repeat homebuyers, provided they meet the eligibility criteria.

Are there income limits for the Next Home Program?

Yes, income limits apply and vary by county and household size. These limits are designed to assist low- to moderate-income families in achieving homeownership.

Is mortgage insurance required when using the Next Home Program?

Mortgage insurance requirements depend on the type of first mortgage loan selected. For instance, conventional loans with less than a 20% down payment typically require private mortgage insurance (PMI).

How do I apply for the Next Home Program?

To apply, you need to work with a participating lender who will guide you through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.

Are there occupancy requirements for the Next Home Program?

Yes, the property purchased must be occupied as the borrower's primary residence throughout the three-year forgiveness period.

Can the Next Home assistance be used for new construction homes?

Yes, the assistance can be applied to both newly constructed and existing homes, provided all other program criteria are met.

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Is there a prepayment penalty for the Next Home loan?

No, there is no prepayment penalty. However, if you sell or refinance the home before the three-year forgiveness period ends, the remaining unforgiven portion of the down payment assistance must be repaid.

What documentation is required to apply for the Next Home Program?

Applicants will need to provide proof of income, employment, credit history, and completion of the required homeownership counseling course, among other standard loan application documents.

Can the Next Home assistance be combined with other down payment assistance programs?

Combining the Next Home assistance with other programs may be possible, subject to specific program guidelines and approval. It's advisable to consult with your lender to explore available options.

Is the Next Home Program available statewide?

Yes, the program is available throughout Indiana, but income limits vary by location.

What is the interest rate on the Next Home down payment assistance loan?

The down payment assistance is provided as a zero-interest loan with no monthly payments, and it is fully forgiven after three years, provided program requirements are met.

Are there specific debt-to-income (DTI) ratio requirements for the Next Home Program?

Yes, DTI ratio requirements are established to ensure borrowers can comfortably manage their mortgage payments. These ratios may vary based on individual circumstances and should be discussed with your lender.