Next Home Down Payment Assistance

What is Next Home?

Next Home is a down payment assistance program offered by Indiana Housing & Community Development Authority (link to their site found here –IHCDA Home Buyer Programs). It provides a home buyer with up to 3.5% of the price of the home in down payment assistance, essentially covering the entire required down payment for the eligible Indiana home buyer.

What are the requirements to qualify for Next Home Down Payment Assistance?

This mortgage program is available to both first time and non-first time home buyers who are buying a primary residence in Indiana. To qualify for the down payment assistance, the home buyer’s credit score must be at least 660 and the household income can’t be above the maximum allowed for the household size and county. To see the current income limits per Indiana county, click here. Other restrictions may also apply.

Pros

  • 3.5% down payment help for FHA loans and 3% for conventional loans covers entire down payment.
  • Seller can cover closing costs and prepaid items up to 6% of the price for FHA (3% for conventional).This lets the FHA buyer often get into the home with no out of pocket cost other than the IHCDA enrollment fee and the earnest money. The conventional buyer typically needs some money invested (<$2,000 normally).
  • The mortgage program is not limited to first time home buyers.
  • No additional inspections are required beyond inspections required by the county.
  • Closing is not delayed (typically close in 30 days).

Cons

  • Down payment must be repaid if the property is sold or refinanced in the first 2 years after home purchase.
  • Mortgage interest rate may be higher than with other mortgage options.
  • The program can only be used with 30 year fixed rate FHA or Conventional mortgages.
  • First time home buyers will need to complete an online home buyer education course provided by IHCDA.
  • IHCDA charges a non-refundable one time enrollment fee of $100 to participants in the mortgage program.
  • Closing costs are higher so higher seller concessions may be needed as may some personal investment from the home buyer (more often needed with conventional financing).
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What Is The Home Buying Process?