Hoosier Homes is structured as a second loan — not a grant. It carries 0% interest, no monthly payments, and monthly forgiveness over 7 years if you remain in the home as your primary residence.
Marketing often calls down payment assistance a "grant," but Hoosier Homes is documented as a subordinate second mortgage behind your FHA, VA, USDA, or HFA conventional first loan. That legal structure sets clear rules for forgiveness, occupancy, sale, and refinance.
The second lien carries 0% interest and requires no monthly payment on the assistance layer. Each month you remain in the home as your primary residence, 1/84th of the principal is forgiven.
Stay all 7 years (84 months) as primary resident and the second lien can be fully forgiven — meaning you owe nothing on the assistance. Exit early and the remaining unforgiven balance comes due.
Calling Hoosier Homes a grant vs. a loan changes how you plan exits and long-term occupancy.
4% or 5% assistance reduces what you bring to closing — but terms still apply: occupancy, forgiveness timeline, and possible payoff on sale or refinance.
No payment is due on the Hoosier Homes second lien. Your monthly housing cost is your first mortgage, taxes, insurance, and HOA — not a separate DPA payment.
A remaining second-lien balance is due if you exit within 7 years. Ryan and Steve model this payoff before you close so there are no surprises.
If you expect to stay 7+ years, the forgivable structure can mean you never repay the assistance. Shorter timelines require planning for the unforgiven balance.
How principal forgiveness accumulates month by month.
| Time in home | Forgiven (approx.) | Remaining balance (approx.) |
|---|---|---|
| Year 1 (12 months) | ~14.3% | ~85.7% |
| Year 3 (36 months) | ~42.9% | ~57.1% |
| Year 5 (60 months) | ~71.4% | ~28.6% |
| Year 7 (84 months) | 100% | $0 — fully forgiven |
Example on $12,000 assistance: after 3 years, roughly $5,140 could remain unforgiven if you sell or refinance at that point.
Related guides on repayment timing, structure, and early exit.
Program overview — Indiana DPA for primary-residence buyers.
4% vs 5% examples by first mortgage amount.
Payoff rules when you exit early.
DASH reservations and lender origination.
Full guide — eligibility, counties, and cash rules.
Compare Hoosier Homes with other Indiana DPA.
FHA 30-year fixed pairing with Hoosier Homes.
Ryan & Steve will show you exactly how the Hoosier Homes second lien appears on your Loan Estimate and what forgiveness means for your timeline.
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.