State Agency Announces New Lower Interest Rate for Homeownership Program

The Indiana Housing and Community Development Authority (IHCDA) today announced a new, lower interest rate for its First Home program to benefit first-time homebuyers in Indiana. The lowered rate puts the program at about a full point below the market rate (currently around 6.25 percent) for a fixed rate mortgage loan. The new rate is 5.25 percent for loans offered through IHCDA for first-time homebuyers. The reservation fee for Mortgage Credit Certificates (MCC) was also lowered to half a percent, down from one percent.

“Helping all Hoosiers secure safe and affordable housing is at the heart of our agency’s mission,” said Sherry Seiwert, Executive Director of IHCDA. “We are committed to helping families accumulate assets and climb the economic ladder. We understand that affordable home ownership can transform communities and change lives. As families become more financially stable, they put down roots in neighborhoods, spend their money locally, and contribute to the local tax base.”

IHCDA’s Mortgage Credit Certificate Program offers first-time homebuying Hoosiers a Federal tax credit. The tax credit amount ranges between 20 percent and 35 percent of the interest paid on a mortgage each year, depending on the mortgage loan amount. The maximum credit per year is $2,000.

The state’s First Home Program allows first-time homebuyers or buyers purchasing a home in certain rural communities and inner-city neighborhoods to purchase at an interest rate below the market rate. Qualified Hoosiers may contact a participating lender to qualify for the program. A listing of participating lenders is available on IHCDA’s Web site at www.ihcda.in.gov.

In 2007, IHCDA’s First Home Program provided more than 1,930 single-family loans for first-time homebuyers. These loans totaled more than $193 million. The First Home program has helped more than 9,500 Hoosiers become homeowners since 2000. Last year, IHCDA also expanded the current First Home Program to allow veterans to take advantage of first-time homebuyer below-market interest rates, while waiving the first-time homebuyer requirement.