There’s a new Indiana housing program in the works, and I hope it’s available soon!
Called Next Home, this program is slated to be for first-time homebuyers AND previous homebuyers. Further, the income ceiling is higher, so more folks should be able to qualify.
· Down payment assistance to non first time home buyers
· DPA is 4%
· FHA loans
· Higher income limits than that of First Home/Plus
· Can be used with MCC but then all MCC requirements come into play, first time buyer etc.
· DPA is fully forgiven after 2 years (!!!!!!!)
· DPA is zero interest no monthly payments
· Min credit score 650
· No purchase price limits
· Must be originated through a participating lender
If you qualify for the Mortgage Credit Certificate as well, you can do both programs. That’s like stacking coupons! The MCC is a program that gives you 20% of your mortgage interest paid each year. You get it back as a tax credit. Better than a tax deduction.
If you’re buying a house in Indiana in the near future, do check out these programs on the Indiana housing web site. Note that there are small fees involved for getting either program. A few hundred bucks or less.
And if you live in another state, by all means seek out the same types of programs for your area.
I do think we qualify for both programs, and if so, that would make our effective interest rate less than what we could get if we got a conventional 15-year loan.
I’m going to keep my eye out for when this program comes about. I hope it happens before we find a house, because that’s a lot of money on the table.
EDITED TO ADD:
I spoke with a lender who has more familiarity with the program, and she said this will have a much higher interest rate. She said she expected it to be 5.25%. Yuck! She also said you’d have to pay PMI for 5 years. That would basically negate any benefit for me since we should be able to get a conventional loan at a much lower rate and we probably won’t have to pay PMI. But it’s good to know our options, anyway!