If you sell or refinance before the 7-year forgiveness period ends, the remaining unforgiven balance on your Hoosier Homes second loan must be repaid — here is why that matters before you close.
Hoosier Homes forgives 1/84th of the assistance principal each month you remain in the home as your primary residence. That forgiveness stops — and any unforgiven balance becomes due — when you sell, refinance, or otherwise exit the program terms within the 7-year window.
This is not a penalty. It is how the program recovers assistance when a buyer does not complete the full forgiveness term. The payoff comes from your sale proceeds or is rolled into a refinance transaction.
Ryan and Steve walk through this scenario before you close on your purchase — so you know what a move or refinance could cost at year 2, year 4, or any point inside the window.
Approximate unforgiven balance if you exit at various points (assuming primary-residence occupancy throughout).
| Original assistance | Months in home | Est. remaining balance |
|---|---|---|
| $12,000 | 12 months | $10,286 |
| $12,000 | 36 months | $6,857 |
| $12,000 | 60 months | $3,429 |
| $15,000 | 24 months | $10,714 |
| $15,000 | 48 months | $6,429 |
Three questions Ryan and Steve ask every Hoosier Homes buyer.
If your job, family, or lifestyle suggests a move within 5 years, we model the payoff at your expected exit year — not just year 7.
Rate drops are tempting, but refinancing inside 7 years typically requires paying off the remaining Hoosier Homes balance. We compare refi savings vs. payoff cost.
Even with a potential early-exit payoff, Hoosier Homes often still saves thousands at closing. The math depends on your assistance amount and timeline.
Related guides on forgiveness structure and program basics.
Program overview — Indiana DPA for primary-residence buyers.
Second-lien structure and monthly forgiveness rules.
4% vs 5% examples by first mortgage amount.
DASH reservations and lender origination.
Full guide — eligibility, counties, and cash rules.
Compare Hoosier Homes with other Indiana DPA.
FHA refinance options and DPA considerations.
Ryan & Steve will estimate your Hoosier Homes payoff at any exit year — so you know the real cost of a move or refinance.
Program guidelines, income limits, and Targeted Area maps change. This page is educational — final eligibility is confirmed when your file is underwritten against current Hoosier Homes rules. This website is not directly affiliated with or endorsed by any government agency.