2024 FHA Loan Limits in Indiana

FHA loans are insured by the Federal Housing Administration (FHA), which allows them to offer consumers competitive mortgage rates and lower credit score requirements, making them easier to qualify for. However, there are limits to how much you can borrow with an FHA loan.

The FHA loan limit for single-family homes in all Indiana counties is $498,257 for 2024. Find out how these limits are determined, how you can qualify and which FHA-approved lenders to consider in the guide below.

Indiana FHA loan limits by county

How are FHA loan limits determined?

The National Housing Act (NHA) requires FHA loan limits to be established based on the median home prices in each county. FHA loan amounts are capped at 115% of the median home price for the county, as estimated each calendar year by the U.S. Department of Housing and Urban Development (HUD).

The FHA also sets floor and ceiling limits for loans, which are based on the national conforming loan limit for conventional mortgages determined by the FHFA. In 2024, the conforming loan limit for a single-family property is $766,550. The FHA sets the floor limit at 65% of that amount, or $498,257, and the ceiling at 150% of that conforming limit, or $1,149,825, with the exception of a few states with high construction costs.

For example, HUD estimates that homes in Decatur County have a median sale price of $195,000. 115% of the median sale price in Decatur would be $224,250. Since that’s less than the floor limit of $498,257, the FHA loan limit for Decatur County is $498,257. The FHA loan limit for one-unit homes in all other counties in Indiana is also equal to the floor limit, but the FHA sets higher limits for multifamily properties according to fixed multiples of the single-family limits.

How to qualify for an FHA loan in Indiana

When applying for an FHA loan in Indiana, you’ll need to meet certain credit standards and other requirements established by the FHA. You may also need to meet additional requirements set by the private lender that issues the loan. At a minimum, you should:

→ Have a Social Security number. To qualify for an FHA loan, you’ll need to be a U.S. citizen or lawful permanent resident alien with a valid SSN.

→ Have at least a 500 credit score. You can qualify for an FHA loan with a credit score of 500 if you make at least a 10% down payment. If you’re putting less down, you’ll need a credit score of at least 580.

→ Have a 43% debt-to-income ratio or less. In most cases, you won’t be eligible if your monthly minimum debt payments exceed 43% of your gross income, but some lenders may make an exception if you have enough cash reserves.

→ Apply for a mortgage loan up to $498,257. You can’t borrow more than $498,257 with an Indiana FHA loan, whether you live in Marion County, Allen County or somewhere else in the state. You can use an FHA loan to purchase a more expensive home, but you’ll need to cover the difference with a larger down payment.

→ Put at least 3.5% down plus closing costs. Your down payment needs to be at least 3.5% of the appraised value or sale price of the home, whichever is less, and you’ll need to cover the closing costs associated with the sale (closing costs in Indiana average 0.9% of the sale price, which is relatively low). You’re allowed to use gift money and funds from down payment assistance programs, in addition to funds stashed in your checking, savings and investment accounts.

→ Pay mortgage insurance premiums. With FHA loans, borrowers are required to pay FHA mortgage insurance premiums to protect the lender in case of default. FHA loans require an upfront mortgage insurance payment equal to 1.75% of the loan amount, which may be financed into your loan, in addition to annual mortgage insurance premiums ranging from 0.15% to 0.75% of the loan amount, depending on your down payment and mortgage term. If you put at least 10% down, you can stop paying the premiums after 11 years.

→ Show proof of income and employment. The FHA doesn’t set minimum income requirements for borrowers, but your lender might. In any case, you’ll need to document your income and employment history for the past two years when applying.

→ Intend to live in the home. Only owner-occupied properties qualify for FHA loans, so you can’t use an FHA loan for an investment property unless you plan to live in one of the units. At least one borrower needs to occupy the home secured by your FHA mortgage as their principal residence for a minimum of one year.

Buying a multifamily property with an FHA loan

While FHA loans are only available for owner-occupied properties, you’re allowed to finance a two- to four-unit multifamily home with an FHA mortgage as long as one of the units is your primary residence. The other units can be rental properties, and you can use the projected rental income to help you qualify for the larger FHA loan. This strategy, known as house hacking, can help you offset your own housing costs.

To buy a multifamily property with an FHA loan, you’ll need to meet all the qualification requirements in the section above and have sufficient cash reserves to cover at least one mortgage payment after the sale is complete. Your mortgage must also fall within the FHA loan limits below.

FHA lenders in Indiana

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

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