Bloomington Down Payment & Closing Cost Assistance Program

What is Bloomington Down Payment & Closing Cost Assistance Program?

Bloomington Down Payment & Closing Cost Assistance Program is a forgivable loan for homebuyers in Bloomington, Indiana, administered by City of Bloomington Housing and Neighborhood Development (HAND).

• HAND's Down Payment and Closing Cost Assistance program provides up to $10,000 to eligible first-time homebuyers in the City of Bloomington as a forgivable second mortgage. The lien forgives at 20% per year and is fully forgiven after 5 years of owner-occupancy. Applicants must complete the HAND Homebuyers Club class and be at or below 80% AMI.
• Up to $10,000 toward down payment and closing costs.
• Forgivable 0% second mortgage.
• Forgives 20% per year over 5 years.
• No prepayment penalty.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from HUD HOME / CDBG (federal entitlement funds).

How much assistance does it provide?

Bloomington Down Payment & Closing Cost Assistance Program offers up to $10,000 in assistance.

• Buyer contribution: Not published.
• Amounts are the program's published maximums, not an offer — City of Bloomington Housing and Neighborhood Development (HAND) determines any individual award.

Do you have to pay it back?

Bloomington Down Payment & Closing Cost Assistance Program is forgiven after 5 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Sale or loss of owner-occupancy before 5 years; forgives 20% per year.
• The assistance is recorded in Second (subordinate) mortgage position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Bloomington Down Payment & Closing Cost Assistance Program is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

Bloomington Down Payment & Closing Cost Assistance Program limits household income to 80% of the area median income, which varies by county and household size.

• Household at or below 80% AMI; 4-person limit $86,700 (1-person $60,700 up to 8-person $114,450). Income guidelines subject to change.
• The limit applies to total household income, not only the borrower’s.
• The program lists a maximum household size of 8.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Bloomington Down Payment & Closing Cost Assistance Program caps the purchase price as follows: Not published in program page.

• Eligible property types include single-family.

Where does it apply?

Bloomington Down Payment & Closing Cost Assistance Program is a federal program, so it is not limited to Indiana.

How do you apply?

Applications for Bloomington Down Payment & Closing Cost Assistance Program go through City of Bloomington Housing and Neighborhood Development (HAND), which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through City of Bloomington HAND Homebuyers Club class.

2. 2

   Contact City of Bloomington Housing and Neighborhood Development (HAND) to reserve funds

   Funds are reserved through Application via Neighborly Software portal, and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.