If you’re a first-time home buyer in Indiana, the state’s housing authority wants to help with what’s likely going to be the biggest purchase you’ve ever made.
The Indiana Housing and Community Development Authority, or IHCDA, offers mortgage programs for qualified first-time home buyers. You’re considered a first-time buyer if you have not owned your primary residence in the last three years.
The requirement to be a first-time home buyer is waived for military veterans and for people who buy in economically disadvantaged “target areas.” Some of the programs are open to repeat buyers who meet income guidelines.
IHCDA highlights and eligibility requirements
- Some programs offer down payment assistance
- Loans can be used to buy single-family houses, two- to four-unit dwellings, town houses and condominiums
- All qualified loans are 30-year fixed-rate mortgages
- Income limits vary by county and depend on family size
- Manufactured homes are not eligible
- Borrower pays a $100 “reservation fee”
Indiana first-time home buyer loan programs
Affordable Home provides below-market interest rates on FHA loans for low- to moderate-income home buyers who have enough money for their down payment and closing costs. FHA loans are mortgages insured by the Federal Housing Administration. Maximum home prices vary by county. The minimum credit score is 660.
The borrower must be a first-time home buyer, and this program can’t be combined with any other IHCDA program. Borrowers may receive down payment assistance from an entity other than IHCDA.
My Home is for low- to moderate-income home buyers who provide funds for down payment and closing costs. Borrowers get conventional 30-year fixed-rate mortgages with a minimum down payment of 3%. (Condo loans have a minimum down payment of 5%.)
Borrowers pay discounted premiums for mortgage insurance, which is required for mortgages with down payments of less than 20%.
My Home is available for first-time home buyers and repeat buyers. The minimum credit score is 640. When combined with a mortgage credit certificate, it is available only to first-time buyers.
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Indiana down payment assistance programs
HELPING TO OWN (H2O)
The Helping To Own program offers down payment assistance for low- to moderate-income first-time home buyers who get FHA loans. The assistance is a grant of up to 3.5% that does not have to be repaid.
The minimum credit score is 660. H2O cannot be combined with any other IHCDA program.
Next Home provides down payment assistance in the form of a second mortgage to low- to moderate-income borrowers who get FHA or conventional mortgages.
The maximum down payment assistance for FHA loans is 3.5%, and for conventional loans, 3%. The assistance must be repaid if the buyer refinances or sells the home, or goes into foreclosure, within two years of getting the loan.
The minimum credit score for an FHA loan is 660. The minimum score for a conventional loan is 640. It can be combined with a mortgage credit certificate.
Mortgage Credit Certificates
Under the Next Home and My Home programs, low- to moderate-income first-time home buyers can obtain mortgage credit certificates from IHCDA. Borrowers can receive a credit to offset their federal income taxes, up to $2,000 for each year they own the home.
Your next step
Visit the IHCDA’s homeownership programs page for brief summaries of each loan program and related links to dig deeper. Some loan programs have income limits, home price limits or both; links to those can be found on the IHCDA’s income and acquisition limits page. IHCDA maintains a chart that lays out basic features and requirements of each loan program.
National first-time home buyer programs to consider
If you don’t qualify for IHCDA home buyer assistance programs or want to explore all of your options, there are first-time home buyer programs available nationwide worth considering:
Conventional loans are regular mortgages that aren’t insured by a government agency. Some of these loan programs allow down payments as little as 3%. They require mortgage insurance for down payments less than 20%.
FHA-insured loans allow down payments as low as 3.5% and are available for borrowers with low credit scores. Borrowers have to pay monthly mortgage insurance for the life of the loan.
VA loans are available to qualified active-duty service members, military veterans and certain spouses. The main attraction is that they don’t require a down payment.
USDA loans, guaranteed by the Department of Agriculture, are used to buy homes in rural areas. A down payment is not required.
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