The Indiana Homeowner Assistance Fund Program
Please note that all information contained below is subject to change and provided only as guidance for interested homeowners. The information below is not the IHCDA HAF policy nor should it be interpreted as an official statement of policy on behalf of IHCDA. Anything related to HAF remains subject to change and may be modified based on U.S. Treasury guidance or IHCDA policy prerogatives.
Can I apply?
The IHAF program is closed. Applications are no longer being accepted.
For information about payoff and forgiveness of IHAF loans and lien releases, please contact IHAF@ihcda.in.gov.
Will homeowners need to pay the money back?
No, all assistance is structured as a forgivable loan if the homeowner stays in the home for five (5) years (20% of the loan will be forgiven every 12 months). However, if the borrower sells the property before the five (5) years, then all net sale proceeds, up to the full outstanding principal balance at the time of the sale, will be due and payable to IHCDA.
| Term (in years from closing date) | Amount Due Back to IHCDA |
|---|---|
| Year 1 | 100% |
| Year 2 | 80% |
| Year 3 | 60% |
| Year 4 | 40% |
| Year 5 | 20% |
| Completion of year 5 | 0% |
Is the loan forgivable by reason of death of the homeowner?
No, the IHAF loan is not forgivable by reason of death by the borrower. However, because it is a non-recourse loan, the borrower’s estate has no personal liability for the debt, and IHCDA is limited to collecting from the available proceeds after the sale of the property.
Will the benefits a homeowner receives through IHAF be considered taxable income by the IRS?
No, any assistance received through the IHAF program for assistance with eligible home-related expenses is not considered taxable income for federal tax purposes. Eligible applicants will not be required to pay taxes on qualified assistance received through IHAF.
Can I refinance my home after receiving IHAF assistance?
Yes. IHAF does not prevent you from refinancing your home. However, you should be aware of the following IHAF policy:
“NO CASH OUT” REFINANCE: If you refinance your home ONLY to get better loan terms than your current mortgage offers (such as a lower interest rate or payment), then IHCDA will sign an agreement with your lender to have the IHAF loan put back into second place behind your refinanced loan (this is called a Subordination Agreement).
“CASH OUT” or “LINE OF CREDIT” REFINANCE: If you refinance your home in order to receive money (“cash out” some or all of the value of your home), then you must pay back the amount of IHAF assistance that you received; OR, if you do not wish to pay back IHAF, then IHCDA will not sign a Subordination Agreement and the IHAF loan will be placed ahead of the refinanced loan (most lenders will not agree to refinance your loan without a Subordination Agreement).
PLEASE PROVIDE THIS INFORMATION TO YOUR POTENTIAL REFINANCE LENDER BEFORE YOU SIGN ANY NEW LOAN DOCUMENTS. The new lender should understand what this policy means and what effect it would have on their refinance loan. If you have additional questions, please contact the agency that assisted in getting you the IHAF assistance.