Innovative loan supported by the City of Indianapolis helps homebuyers with low incomes increase their purchasing power
INDIANAPOLIS (Aug. 6, 2020) – The Indianapolis Neighborhood Housing Partnership® (INHP) continues to provide innovative home mortgage financing for families with low and moderate incomes with the launch of its newest loan program, the Market Expander. The program, designed to increase purchasing power, offers buyers with low and moderate incomes the ability to responsibly expand their price point when shopping for a home while avoiding taking excessive risk or becoming housing cost burdened.
The loan program considers current Indianapolis housing market prices and the ability of people with low and moderate incomes to buy a home in more areas where they choose. As of June 2020, the median sales price for a home in Marion County was $185,000. A family of four earning 60% of the area median income (AMI) would spend more than 30% of their gross monthly income on a traditional 30-year mortgage payment at that price point, creating a housing cost-burden situation for the buyer.
Using the Market Expander, buyers may be able to compete within current market factors without becoming housing cost-burdened. It is comprised of two mortgages:
• A 20-year, significantly below-market fixed rate first mortgage
• A second, no-interest mortgage with deferred payments until years 21-30
The first mortgage covers the amount of the purchase price that creates an affordable monthly mortgage payment for the buyer. The second mortgage covers the remainder of the purchase price at no interest, does not require payments for 20 years, and begins when the first mortgage terms end.
This program will be available to Marion County residents earning up to 80% of AMI, as defined by the U.S. Department of Housing and Urban Development, and who qualify through INHP.
“INHP’s consistent focus is on preparing people to successfully purchase a home within their financial means. The Market Expander is a loan program designed to help more people with low and moderate incomes increase their chances of finding a home that meets their needs,” said Rob Evans, INHP’s executive vice president of homeownership initiatives. “The mortgage program is just one of the many ways INHP is addressing the shortage of affordable housing in Indianapolis, and now is the perfect time to begin offering this unique solution to homebuyers.”
The Market Expander is being supported by a $500,000 Community Development Block Grant from the City of Indianapolis Department of Metropolitan Development.
“The City of Indianapolis is proud to support this program and INHP’s efforts to provide innovative housing solutions for families with low and moderate incomes in Indianapolis,” said Emily Mack, director of the Indianapolis Department of Metropolitan Development. “The Market Expander program will even the playing field for these families, giving them the opportunity to purchase homes they can sustain over the long term that they might not have been able to afford otherwise.”
The Market Expander joins several unique INHP mortgage programs for buyers with low and moderate incomes. They include the Revive Indy loan for fixer-uppers; Home Value Guaranty, which addresses the risk of home value appreciation; and Mortgage Accelerator, which promotes wealth accumulation with a below market 20-year fixed rate first mortgage.