South Bend Home Loan

Monday, June 22, 2015

More Home Buyers Now Qualify For Indiana Down Payment Assistance

Great news!  Indiana Housing and Community Development Authority (IHCDA) announced an increase in the income cap for home buyers wanting to participate in the mortgage credit certificate program, the My Home reduced down payment program and the Next Home down payment assistance program.

What this means is that more Indiana home buyers can now take advantage of these programs.  Let me take a minute to summarize what these programs offer:

Mortgage Credit Certificate (MCC)

The MCC is a federal income tax credit that is available for first time buyers.  The eligible buyer who enrolls in the MCC program will receive an income tax credit when filing their tax returns that is equal to a percentage of the interest paid on their mortgage that year.  Annual credits given range between 20-35% of the interest paid and they are ongoing for as long as the buyer lives in the home, pays income taxes and pays mortgage interest.  Amounts received vary based on loan size but typically run between $800-$1,000 in year one, declining slowly thereafter.

My Home 

My Home is a conventional loan product for first time buyers that offers a 3% down payment, a competitive interest rate and a lower cost for private mortgage insurance (PMI).  The interest rate is not driven by the credit score which is different than the norm for conventional mortgages, so a person qualifying with a 680 credit score will get the same attractive interest rate as the person qualifying with a 780 score.  That and the lower PMI cost are what make this loan option appealing to certain buyers.

Next Home

Next Home is the most well known IHCDA product because it addresses the down payment need of many buyers.  Next Home has both a FHA and conventional option and, in both cases, the entire down payment is covered by IHCDA.  This program is NOT for first time buyers only.  As long as the buyer sells their existing home before closing on the new home, they could qualify.

The interest rate and fees are higher for this program.  Seller concessions are typically used to cover the higher fees but conventional loans are limited to a 3% cap from the seller so the conventional buyer typically needs to invest some money themselves (the FHA buyer typically does not).  It is still less than with a typical loan product, though, and the conventional loan gets that same reduced PMI as the My Home product, so it can help many buyers get into a home sooner with little to nothing out of pocket and a comfortable payment.

Higher Income Limit Amounts

With today's announcement, IHCDA is allowing more buyers to now qualify for these programs by raising the maximum household income limits.  In St. Joseph County, Indiana, a buyer using the MCC program or the Next Home FHA program can now qualify with an income of up to $61,700 for a 1-2 person household.  For a 3+ person household, the income limit is increased to $70,955.

For conventional loans not used jointly with the MCC, the limits are now even higher.  Next Home Conventional and My Home are allowing household income limits up to $86,380.

Share the Word

Many home buyers in Indiana are not aware of these programs and they should be.  Not all buyers will choose to participate because of the higher interest rate and higher fees, but all buyers should be aware of the option so that they can compare the costs/benefits and decide for themselves.

At a minimum, all first time buyers should consider the MCC. The $500 enrollment fee is regained in under a year typically which makes it a great option for the buyer who has the upfront money available.

But, again, many home buyers have never even heard that these programs are out there.  Please - help them learn by sharing this post.  They'll thank you for it.  :)

To learn more about the IHCDA products covered here or any other aspects of home financing, contact Lori Hiscock at  

Lori Hiscock is a Sr. Loan Officer at Ruoff Home Mortgage‘s South Bend office.  One of Michiana’s top mortgage loan officers, Lori started her lending career in 1995 after obtaining her bachelor’s degree in Finance from Western Michigan University.  You can connect with Lori Hiscock or apply online here. NMLS#404320.
Ruoff Mortgage Company, Inc. is an Indiana corporation licensed by the Indiana Department of Financial Institutions (DFI) and operates with the following licenses:

Indiana-DFI First Lien Mortgage Lending License #10994;
IL Residential Mortgage Licensee #MB.6760734;
Michigan 1st Mortgage Broker/Lender License #FL0017496.
Ohio Mortgage Broker Act License #MBMB.850220.000

The Florida Office of Financial Regulation License #MLD1182