Grants and Loans for Home Ownership

Listed below are various grants, loans and or forgivable loan programs that are available to low income households in Indiana that can be used for the purchase of a home. 

The funds from the programs listed below complement the Rural Development - USDA housing program and can be used together by potential homeowners to achieve 100% financing for the purchase of a home.

A three person household with an annual income of $20,820 could potentially qualify for any or all of the following three programs. Working with local businesses and/or the lenders in the community, an applicant that has the commitment can easily obtain as much as $10,900 plus in forgivable loan funds for the purchase of a home.  The remaining purchase price of the home can be 100% financed in a joint partnership between a conventional lender and Rural Development.  The monthly payments on the Rural Development - USDA loan can be subsidized.  

Indiana Housing Finance Authority

With the First Home/PLUS Program, down payment assistance for the purchase of a home is available from the Indiana Housing Finance Authority. Depending upon the household income, and the purchase price of the home there may be $2,500 to $5,000 in down payment assistance available to a new homeowner. In 2000, IHFA has been able to fund all requests that have been made.

The Individual Development Account is designed to assist individuals in their personal finance skills and to assist them in accumulating savings. The Indiana Department of Commerce will match the household's savings (3:1) up to a total of $900 per year. These funds may be used to purchase a home, to further their education, or to start a business. Approx. 70% of the participants use their funds to purchase a home.

This program is available to households with an income at or less then 150% of the federal income poverty level. In several areas of Indiana there are local non-profit organizations that will do the training and administer the program. Training is also available from the Consumer and Family Science Agents & Specialists through the Cooperative Extensive Service. The CES has designed an excellent program for assisting individuals in fulfilling the requirements of this program.

Federal Home Loan Bank of Indianapolis

The Homeownership Opportunities Program (HOP) provides funding to potential homeowners for down payment and closing cost assistance. HOP funds will match dollars provided by the household (including gift and grant money). HOP is one of the programs offered by the Federal Home Loan Bank of Indianapolis (FHLBI) through its member banks. Application for these grant funds needs to be made through your local bank which needs to be a member of the FHLBI.  HOP is open to households with an annual income of 80 percent or less of their area’s median income.

HOP dollars may match the funds of the applicant 3 to 1, up to a maximum of $5,000. For example, a home purchaser saves $1,500 and the member contributes HOP funds of $4,500 for a total of $6,000 to cover the downpayment and closing cost expenses. Homebuyers must have $500 in their own funds and participate in housing counseling Funds are disbursed on a first come first serve basis.

In addition to HOP, the FHLBI has the Neighborhood Impact Program (NIP) that provides funds of up to $10,000 with a 4:1 match for owner occupied rehabilitation and the Affordable Housing Program (AHP) for acquisition, rehabilitation or new construction of larger rental or homeownership projects.

These links take you to pages on the FHLBI web site for additional information:

Homeownership Opportunities Program (HOP)

Neighborhood Impact Program (NIP)

Affordable Housing Program (AHP)