MI Homes
Raymond Realty Group
Voice: 219-405-7269
"Ray Knows Homes"
$15,000 for Foreclosed Homes
The Indiana Housing and Community Development Authority (IHCDA)announced that Hoosiers may be eligible for up to $25,000 inzero-interest, non-amortizing loans for Hoosiers to purchase foreclosedhomes.
Hoosiers who buy foreclosed homes to use as theirprimary residence can qualify for a $15,000 loan from IHCDA’s MarketStabilization Fund. The Federal Home Loan Bank of Indianapolis hascommitted to supply matching grants of up to $10,000.
“WhenHoosiers open the door to their new home, they open several windows ofopportunity,” Lt. Governor Skillman said. “This is a unique use offederal dollars that will encourage homeownership while revitalizingcommunities.”
The money comes from HUD’s NeighborhoodStabilization Program (NSP), which allocated $84 million to IHCDA. Thestate will use $33 million of that allocation for the MarketStabilization Fund. Assistance from this fund will be made available toincome-qualified individuals and families who choose to purchaseforeclosed homes in areas of the state in greatest need of assistance.
Areasof greatest need are identified, with the assistance of the IndianaUniversity Center for Urban Policy and the Environment, using acombination of HUD-provided data and proprietary data. Indiana is theonly state using NSP money in a statewide program to help people buyforeclosed homes.
How the Market Stabilization Program (MSP) Works:
- IHCDA will offer up to $15,000 (not to exceed 20% of purchaseprice) to assist home buyers with the acquisition and/or rehabilitationof a foreclosed residential property located within an area of greatestneed.
- These funds may be used in conjunction with the IHCDA First Homeproduct, FHA, VA, USDA, or prime fixed rate product. No adjustable rateor subprime mortgage products will be allowed for the purchase of thesehomes.
- Home buyers may use these funds for closing costs and down paymentassistance related to the purchase of a foreclosed home or residentialproperty that will be used as the primary residence.
- To be eligible for rehab funds a residential structure must notmeet local building code and therefore is unable to be purchased in itspresent condition.
- Buyers may use both acquisition and rehabilitation assistance inthe purchase of a home, but the combined assistance may not exceed$15,000.
- These funds will be in the form of a zero-interest, non-amortizing,second mortgage loan. These funds do not have to be repaid as long ashome buyers use the home as a principal residence for at least tenyears. If the home buyer sells the home within the first five years, the subsidy is repayable to IHCDA on a shared net proceeds basis. If the home buyer refinanceswithin the first five years, the entire subsidy is repayable to IHCDA.After year 5 and through year 10, the home buyer will retain 20% inequity of the award amount per year.
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This funding will be available to home buyers that are at or below120% of area median income and who intend to occupy the homethemselves. To determine income qualification, compare household incomeand family size to the income guidelines listed below.
- To use the current income limits for MSP as a second mortgage only: MSP Stand-Alone Limits .
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To use the current income limits for MSP in conjunction with aMunicipal Revenue Bond (MRB) or Mortgage Credit Certificate (MCC):
MSP Income Limits with Bond or MCC
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- Home buyers will be required to participate in 8 hours of pre-purchase education provided by an IHCDA certified counselor.
- IHCDA will be coordinating with lenders/servicers, Fannie Mae,Freddie Mac and HUD to list foreclosed properties on a centralized Website. Visit www.indianahousingnow.org and click on the Market Stabilization Programlink to determine if a foreclosed property is in an eligibleneighborhood. Lenders will be required to sell the properties listed onthe site at a discount that meets or exceeds NSP guidelines.
MSP Brochure and Detailed Information:
- The following link is a consumer friendly brochure on the MSP program: Consumer Brochure .
- To view a PowerPoint with detailed MSP information click here: NSP PowerPoint .
If you would like more information on all of IHCDA’s programs, please visit their Web site at www.in.gov/ihcda .
Federal Home Loan Bank of Indianapolis's Program:
- The Federal Home Loan Bank of Indianapolis’s (FHLBI) NeighborhoodStabilization Assistance (NSA) program is offering matching grants ofup to $10,000. The main qualification for the NSA program is that thehome buyer must have already secured IHCDA funds. Once IHCDA funding issecured, proceed by contacting an FHLBI member financial institution.Find a list of member institutions, program guidelines and otherinformation by clicking here .
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