Hoosier Homes Guide
Can I Refinance the First Mortgage Later Without Paying Back the Second Loan?
Refinancing the first mortgage during the 7-year forgiveness period triggers repayment of the remaining unforgiven second loan balance.
Refinancing the first mortgage during the 7-year forgiveness period triggers repayment of the remaining unforgiven second loan balance.
The Hoosier Homes second loan is forgiven monthly over 7 years — but only if you keep the original first mortgage in place. If you refinance:
The remaining unforgiven principal balance becomes due. For example, if you refinance after 3 years, roughly 4/7ths of the original assistance amount would need to be repaid.
After the full 7-year forgiveness period, the second lien is gone and you're free to refinance without any repayment obligation. We walk through refinance scenarios with every Hoosier Homes borrower before closing.