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Indiana First-Time Homebuyer Programs of 2019

Taking the path to homeownership for the first time can be an overwhelming experience. There is a lot to do and learn, and figuring out how to manage the costs involved can be stressful. Thankfully, help is available for first-time homebuyers in the Hoosier State.

Indiana offers an array of programs that can provide affordable mortgages, tax credits and assistance with down payment and other purchasing costs.

Indiana first-time homebuyer programs

The Indiana Housing & Community Development Authority (IHCDA) is a state agency dedicated to creating affordable housing opportunities for Indiana residents.

In January 2019, we researched current information on first-time homebuyer programs in Indiana, which included reviewing the IHCDA guidelines. Here’s what first-time homebuyers in Indiana need to know.

Eligibility for Indiana assistance

To qualify for one of Indiana’s first-time homebuyer programs, your income must fall within the limits set for that program. You must also pay a loan reservation fee, which is $100 for most programs. Individual programs have their own eligibility requirements that are listed below.

You can check current mortgage rates for your area here.

Helping to Own (H2O)

Features

  • A down payment assistance grant, which may also be used for closing and prepaid costs, of 3.5% of the purchase price
  • An FHA, fixed-rate mortgage with a 30-year term

Eligibility

  • Must be a first-time homebuyer, meaning you haven’t owned a home in the past three years, unless you are an eligible veteran or are purchasing in a targeted area
  • Have a credit score of 660 or higher
  • Fall within program income limits, which vary by county and family size
  • The cost of the home must fall within program limits, which vary by county
  • The property must be a condo, townhouse or a planned unit development, or a home with no more than four units
  • The home must be your primary residence

How it works

To apply for the Helping to Own program, you must contact an IHCDA participating lender. Visit the participating lenders page to find a lender in your area. The lender will guide you through the process.

Affordable Home (AH)

Features

  • A 30-year mortgage funded by FHA funds with a fixed rate set by the IHCDA

Eligibility

  • Must be a first-time homebuyer, meaning you have not owned a home in the past three years, unless you are purchasing in a targeted area
  • Have a credit score of at least 660
  • Fall within income limits that vary by county and family size
  • May not obtain down payment assistance through the IHCDA for the purchase
  • The property must be either: a condo, a townhome, a planned unit development or a home with between one and four units
  • Must be your primary residence
  • Cost of the home must not exceed the limits set for the program

How it works

Check the IHCDA participating lenders page to find a lender. The lender will collect your financial information, determine whether you qualify for the Affordable Home program and help you through the process.

Mortgage credit certificate (MCC)

Features

  • A federal tax credit of 20% to 35%, depending on your mortgage amount, to offset the cost of your mortgage
  • Compatibility with conventional, FHA, VA or USDA Rural Housing mortgage loans

Eligibility

  • Must be a first-time homebuyer, meaning you haven’t owned a home for the past three years, or be purchasing in a targeted area
  • Must fall within program income limits, which vary by county and family size
  • The cost of the property must fall within limits for the program
  • Reservation fee of $500
  • The property must be on only one parcel and must have between one and four units
  • You must live in the home as your main residence

How it works

Get started by contacting a lender that participates in the MCC program. To find one, check the IHCDA participating lenders page and browse by area and program. The lender will check to see if you qualify for MCC and, if you do, will walk you through the next steps.

Next Home (NH)

Features

The Next Home program offers:

  • Cash down payment assistance as a percentage of the purchase price or appraised value, whichever is lower; 3.5% for FHA loans and 3% for conventional loans; funds also can be used for closing and prepaid costs
  • A 30-year mortgage with a fixed rate set by the IHCDA
  • Compatibility with FHA or conventional financing

Eligibility

Eligibility requirements for the Next Home program include:

  • A credit score of at least 660 for an FHA loan or 640 for a conventional loan
  • Must fall within program income limits, which vary by county and family size
  • The home must have between one and four units
  • You must live in the home as your main residence

How it works

Contact a participating lender to find out whether you qualify for the Next Home program and to get started with the loan process. Find a lender on this IHCDA participating lenders list.

Next Home with mortgage credit certificate (NH/MCC)

Features

  • Down payment assistance as a percentage of the purchase price or appraised value, whichever is lower; 3.5% for FHA loans and 3% for conventional loans; the funds also may be used for closing and prepaid costs
  • A 30-year mortgage with a fixed interest rate set by the IHCDA
  • A federal tax credit that varies based on mortgage amount
  • Compatibility with either FHA or conventional financing

Eligibility

  • Must be a first-time homebuyer or a repeat buyer purchasing in a targeted area
  • Have a credit score of at least 660 for an FHA mortgage loan or 640 for a conventional loan
  • Must fall within income requirements for the program
  • The home price must fall within acquisition cost limits set by the program
  • The home must be your primary residence

How it works

Contact a participating lender to apply, find out if you quality and get started with the loan process. Check the IHCDA participating lender page to find a lender.

My Home (MH)

Features

  • A 30-year, conventional mortgage with a fixed rate set by the IHCDA

Eligibility

  • Must have a credit score of at least 640 if loan-to-value ratio (LTV) is 95% or less; otherwise, credit score requirement varies
  • Must fall within the income limits of the program
  • Conventional financing only
  • All loans with LTVs over 95% must be underwritten by master servicer
  • The home must be your primary residence

How it works

To apply for the My Home program and get started, contact a participating lender. You can find a lender in your area by checking the IHCDA participating lenders page.

My Home with mortgage credit certificate (MH/MCC)

Features

  • A 30-year mortgage with a fixed rate set by the IHCDA
  • Federal tax credit that varies based on mortgage amount to offset mortgage cost

Eligibility

  • Must be a first-time homebuyer or a repeat buyer purchasing in a targeted area
  • Must have a credit score of 640 or higher for loans with LTVs of 95% or lower; otherwise, credit score requirements vary
  • Must meet income requirements set by the program, which vary by county and depend on family size
  • The home cost must fall within program limits
  • The home must be your primary residence
  • All loans with LTVs greater than 95% must be underwritten by master servicer

How it works

To apply and find out if you qualify for the My Home with mortgage credit certificate program, contact a participating lender. You can locate a lender by checking the IHCDA participating lenders page.

Honor Our Vets (HOV)

Features

  • $5,000 in incentives that can be used for moving expenses, down payment and/or closing or prepaid costs
  • A 30-year mortgage loan using Veterans Administration financing
  • May finance 100% of the home purchase cost
  • Can be combined with the mortgage credit certificate only if the applicant is a first-time homebuyer

Eligibility

  • Must be a service member, veteran or eligible surviving spouse
  • Must fall within program income limits, which vary by county
  • The property must be a condo (for loans with LTVs equal to or less than 95%), a townhome, a planned unit development or a home with between one and four units
  • The cost of the property must fall within acquisition limits only if you’re combining HOV with the MCC program
  • The home must serve as your main residence

How it works

To apply for the HOV program, contact a participating lender by checking the IHCDA participating lenders page.

National first-time homebuyer programs

Even though you plan to buy a home in Indiana, you may need to venture outside of Hoosier state lines to find the first-time homebuyer program that’s right for you. In addition to state programs, there are several national first-time homebuyer programs available. If you’re interested in learning more, our guide to first-time homebuyer programs is a good place to start.

 

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