SmartBuy is unique from other IHDA Mortgage programs in that it uses a promissory note and deed restriction:

• The promissory note is the student loan assistance that is forgiven each month you live in your home 1/36th of the assistance amount is forgiven. After 3 years (the 36 months) the full amount will be forgiven.

• Here is how you can estimate how much of the student loan assistance has been forgiven after closing:

  • EDU Assistance amount - ((EDU Assistance Amount ÷ 36) x number of months since closing) = Balance Remaining

• The deed restriction requires that if you choose to refinance or sell your home within the first 3 years, a portion of funds will be due, and you will be required to sell it to someone who qualifies under IHDA’s income and purchase price limits, but this does not mean the buyer of your home is required to use an IHDA Mortgage program.

After you occupied the home as your primary residence for three years, the promissory note is fully forgiven and the deed restriction will be released.

Remember, the deed restriction and promissory note are separate from the $5,000 down payment assistance 2nd mortgage, which requires repayment whenever the following occurs:

1. Sale of the home

2. Refinance of the home

3. 30 years have elapsed since closing

Yes, in combination with student loan debt relief, SmartBuy also provides Down Payment Assistance (DPA) in the form of a deferred $5,000 2nd mortgage. This is a 0% interest 2nd mortgage with no monthly payment.

The original principal balance ($5,000) must be paid back if/when any of the following occurs:

1. Refinance of the home

2. Sale of the home

3. 30 years have elapsed since closing

No, borrowers are not required to utilize the down payment assistance and can opt-out. Please note that while the down payment assistance does require repayment when you sell or refinance the home, it has no monthly payment, bears no interest, and can be prepaid at any time without penalty.

You should carefully consider your budget as the down payment assistance will lessen the amount you need to bring to closing and allow you to hold on to your own funds that can be used in an emergency or home repair.