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HB 1664

Due-on-sale clauses.

2025 Regular Session Introduced by Cherrish Pryor

HB 1664 modifies Indiana's due-on-sale clause enforcement in residential mortgages, potentially expanding loan assumption options or restricting lender acceleration rights in property transfers.

Authored by Representative Pryor
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Bill Summary · HB 1664

Legislative bill overview

HB 1664 addresses due-on-sale clauses in Indiana, which are contractual provisions allowing lenders to demand full loan repayment when a property is sold. The bill modifies how these clauses operate or are enforced in residential real estate transactions. Specific language would need to be reviewed to determine whether it restricts lender rights, provides borrower protections, or clarifies enforcement procedures.

Why is this important

Due-on-sale clauses significantly affect property transactions and borrowing costs. Changes to these clauses can impact whether homeowners can transfer assumable loans to buyers (potentially reducing financing costs), or conversely, whether lenders maintain control over loan repayment terms. This directly affects home affordability, seller negotiating power, and lending market dynamics in Indiana.

Potential points of contention

  • Lender protections vs. borrower flexibility: Restrictions on due-on-sale enforcement could reduce lender security but increase assumption opportunities; lenders may argue this increases their risk or reduces loan values
  • Market impact on loan pricing: Changes could affect mortgage rates or availability if lenders adjust risk premiums, particularly for first-time homebuyers or less-creditworthy borrowers
  • Scope and definitions: Unclear whether protections apply to all residential mortgages, specific loan types, or particular circumstances; overly broad language could create unintended consequences

Compiled from official sources — confirm details with the bill’s official record.

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