Indiana's Hardest Hit Fund

Indiana's Hardest Hit Fund programs can help struggling homeowners avoid foreclosure or get relocation assistance.

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In 2010, the U.S. Department of the Treasury created the Hardest Hit Fund to provide targeted aid to homeowners in those states most affected by the housing market crash. As part of this program, Indiana received over $221 million to provide assistance to homeowners who are at risk of defaulting on their mortgage payments or who face foreclosure. Read on to learn about the different programs available through Indiana’s Hardest Hit Fund and find out if you may be eligible for assistance.

(To learn more about the Hardest Hit Fund and the various state programs funded by it, visit our Hardest Hit Fund topic page.)

Indiana’s Hardest Hit Fund Programs

There are three programs within Indiana’s Hardest Hit Fund:

  • the Unemployment Bridge Program
  • the Recast/Modification Program, and
  • the Transition Assistance Program.

Under these programs, eligible homeowners may receive assistance up to:

  • $30,000 for the Unemployment Bridge Program and Recast/Modification Program, and
  • $7,500 for the Transition Assistance Program.

How Assistance Is Structured Under the Program

In the Unemployment Bridge Program and Recast/Modification Program, homeowners get a loan that is forgiven over a certain period of years. Specifically, homeowners get a forgivable, non-recourse, non-amortizing loan. The loan is secured by a junior lien on the property. The loan term is ten years and is forgiven at a rate of 20% per year in years six through ten.

In the Transition Assistance Program, homeowners get a grant that does not have to be repaid.

Program Details: The Unemployment Bridge Program

The Unemployment Bridge Program provides mortgage payment assistance for currently unemployed or recently unemployed homeowners. There are three sub-programs within this program:

  • Reinstatement with Monthly Assistance for Unemployed Borrowers
  • Reinstatement-Only Assistance for Unemployed Borrowers, and
  • Reinstatement-Only Assistance for Re-employed Borrowers.

Reinstatement With Monthly Assistance for Unemployed Borrowers

This program brings the loan current for unemployed borrowers, as well as covers monthly payments for up to 24 months.

Eligibility. To qualify for this program, you must meet all of the below criteria.

  • You are currently unemployed from a job loss that occurred on or after January 1, 2009.
  • Your monthly first mortgage PITI (principal, interest, taxes, and insurance) payment is greater than 25% of your gross monthly household income (excluding unemployment insurance benefits).
  • After your loan is reinstated, there will be sufficient funds remaining under the program to make six monthly mortgage payments to the servicer before reaching the maximum limit ($30,000).
  • Your current household income is below 140% of AMI (area median income), adjusted for borrower household size.
  • If approved, you will attend approved job training or education classes or participate in structured volunteer work.
  • You have completed a financial literacy educational course provided by the Indiana Housing and Community Development Authority upon approval.

Reinstatement-Only Assistance for Unemployed Borrowers

This program brings the loan current for unemployed borrowers.

Eligibility. To qualify for this program, you meet all of the below criteria.

  • You are currently unemployed from a job loss that occurred on or after January 1, 2009.
  • You do not qualify for monthly assistance, but qualify for assistance in all other respects.
  • Your household income (excluding unemployment insurance benefits) results in a maximum housing debt-to-income ratio of 31%.
  • You have an annual gross household income equal to or less than $150,000.
  • You do not have the means to reinstate the loan or otherwise qualify for another program providing mortgage reinstatement.

Reinstatement-Only Assistance for Re-Employed Borrowers

This program brings the loan current for borrowers who were unemployed and fell behind in payments, but have since found new employment.

Eligibility. To qualify for this program, you meet all of the below criteria.

  • You are re-employed following unemployment that occurred on or after January 1, 2009.
  • You qualify in all other respects for assistance.
  • You have a post-unemployment household income that results in a maximum housing debt-to-income ratio of 31%.
  • Your annual gross household income is equal to or less than $150,000.
  • You do not have the means to reinstate the loan or otherwise qualify for another program providing mortgage reinstatement.

Program Details: The Recast/Modification Program

The Recast/Modification Program reduces the homeowner’s monthly first mortgage payment to an affordable level. There are two sub-programs under this program:

  • Principal Reduction with Loan Recast (re-amortization) Assistance for Borrowers with Under-Employment, Death, Medical, or Military Hardships, and
  • Loan Modification Assistance for Borrowers with Hardships Due to Involuntary Loss or Reduction in Income, Significant Medical Expenses, Military Service, or Death of a Household Member.

Principal Reduction with Loan Recast (Re-Amortization) Assistance

This program lowers the borrower’s monthly first mortgage payment by reducing the principal and re-amortizing the loan.

Eligibility. To qualify for this program, you meet the below criteria.

  • Your qualifying hardship occurred on or after January 1, 2009.
  • To qualify with an under-employment hardship or death hardship, you experienced a minimum involuntary reduction in household income of 15%. (If self-employed, you experienced a minimum 20% involuntary reduction in gross receipts.)
  • To qualify with a medical hardship, your expenses are related to non-elective medical procedures or emergencies, and are greater than or equal to 15% of your household income (20% of gross receipts if self-employed).
  • To qualify for military hardship, you served on active duty and were released due to a service-connected illness or injury or were in the National Guard or Reserves and were called to active duty during a war or in a campaign or expedition for which a campaign badge is authorized.
  • Your current household income is at or below 140% of AMI, adjusted for borrower household size.
  • The maximum housing debt-to-income ratio allowed post-recast is 31%.

Loan Modification Assistance for Borrowers with Hardships

This program lowers the monthly first mortgage payment by modifying the loan.

Eligibility. To qualify for this program, you meet all of the below following.

  • Your hardship, which occurred on or after January 1, 2009, was due to involuntary loss or reduction in income, significant medical expenses, military service, or death of a household member.
  • Your current household income is at or below 140% of AMI, adjusted for borrower household size.
  • The mortgage servicer will determine final eligibility for loan modification.

Learn more about loan modifications in our Alternatives to Foreclosure area.

Program Details: The Transition Assistance Program

The Transition Assistance Program provides financial assistance to homeowners who are completing a short sale or deed in lieu of foreclosure. The following assistance is available:

  • $2,500 to assist with moving and relocation expenses, and
  • up to $5,000 to lenders/servicers to extinguish and release subordinate liens as part of a short sale or deed in lieu of foreclosure agreement.

See our Short Sales and Deeds in Lieu of Foreclosure area for more information on these topics.

Eligibility. To qualify for this program, you meet the below criteria.

  • Your qualifying hardship occurred on or after January 1, 2009.
  • For the under-employment hardship or death hardship, you experienced a minimum involuntary reduction in household income of 15%. If self-employed, you experienced a minimum 20% involuntary reduction in gross receipts.
  • for the medical hardship, your expenses are related to non-elective medical procedures or emergencies, and are greater than or equal to 15% of your household income (20% of gross receipts if self-employed).
  • For the military hardship: (1) you served on active duty and were released due to a service-connected illness or injury; or (2) you were in the National Guard or Reserves and were called to active duty during a war or in a campaign or expedition for which a campaign badge is authorized; or (3) you received a permanent change in station order that necessitated a short sale or a deed in lieu of foreclosure.
  • You applied for assistance funds before the short sale or deed in lieu transaction is completed.

Additional Criteria for Indiana's Hardest Hit Fund Programs

You must also meet all of the below criteria to qualify for assistance under Indiana's Hardest Hit Fund.

  • You own only one mortgaged home.
  • You submit an affidavit documenting a hardship that occurred on or after January 1, 2009.
  • There is a correlation between the hardship and the difficulty in making mortgage payments.
  • The property is not vacant, abandoned, or condemned.
  • The property is a one-to-four-unit, owner-occupied primary residence or condominium (attached or detached) located in Indiana.
  • The unpaid principal balance of your first-lien mortgage does not exceed the conforming loan limit established by the Federal Housing Finance Agency, as modified from time to time.

Exclusions From the Program

Borrowers who have liquid assets sufficient to make six monthly PITI payments (excluding retirement accounts) are excluded from the programs. Home equity line of credit loans and land contracts are also ineligible.

Homeowners may receive more than one type of assistance under the Unemployment Bridge and Recast/Modification programs, however the total amount of assistance cannot exceed $30,000.

Homeowners who have received other types of Hardest Hit Fund assistance are not eligible for the Transition Assistance Program.

How to Apply

To apply for relief under Indiana’s Hardest Hit Fund, go to www.877GetHope.org, click on “Apply Now” and fill out the online form. You can also call the Indiana Foreclosure Prevention Network toll-free hotline 877-GET-HOPE (877-438-4673).

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