High demand forces homeownership program to turn away applicants
INDIANAPOLIS (MIRROR INDY) — Trina Spencer is certain she doesn’t have a high enough credit score or income to qualify for a home loan.
The northwest Indianapolis resident pulls in $1,200 each month in disability and filed for bankruptcy about five years ago.
But there’s another reason Spencer, 55, said she hasn’t tried to get approved for a home loan.
“I just didn’t want to get turned down,” she said.
Spencer finds herself in a relatable situation for many Indianapolis residents. Homeownership is out of reach, too far away to get to without some help.
Most lenders want borrowers to have a credit score of at least 620 for a conventional loan. Plus, a down payment and closing costs would mean kicking in thousands of dollars up front before mortgage payments come due.
The result: Programs that help people buy a home are in high demand.
So high, in fact, that a small pilot program offering up to $100,000 toward buying a home has been forced to start turning away applicants.
In just six weeks, more than 350 people started the application process. They’re vying for four spots in the program, to be determined by a lottery.
Interest in the Homebuyer Choice Program pilot — launched by Kheprw Institute and Homes for All Indy — underscores the need for affordable housing in Indianapolis, where the median sales price for a home is nearly $235,000, according to the real estate website Zillow.
At the same time, data from Apartments.com shows the average rent for an apartment with at least one bedroom is more than $1,000.
[Indy Documenters covered the most recent Homes for All meeting. Read the notes.]
Fortunately for Spencer, her rent isn’t that high. She leases a basement for $600 a month.
And if Spencer can someday become a homeowner, she’d love to find a place around her current New Augusta neighborhood — somewhere for her and her two dogs to call home.
That’s why Spencer and so many others were interested in applying for the homebuyer program.
‘Everything is just going up’
Joshua Caldwell, who like Spencer is interested in the pilot program, knows what he wants homeownership to look like.
He drives a semitruck and spends a lot of time on the road. Home should be an escape, somewhere he can disconnect from the busy world and keep to himself.
“I want a house on the countryside,” he said, “where I come home and relax.”
But Caldwell, 34, hasn’t tried getting approved for a home loan. He’s pretty sure his credit score isn’t good enough.
Besides, he said, it’s not like homes are the only things getting more expensive.
Inflation hit a 40-year high two years ago, and the price of goods and services are only now starting to level off.
“Everything is just going up,” Caldwell said.
For now, then, he’ll have to keep waiting for that countryside refuge.
Mirror Indy reporter Tyler Fenwick covers economics. Contact him at 317-766-1406 or tyler.fenwick@mirrorindy.org. Follow him on X @ty_fenwick.