Buying a house in Indiana can be cheaper than in most States for its lower median price than the national average. Besides, as a first time home buyer in Indiana, you will be put in a room with exciting loan options and down payment assistance. Once you are eligible, they become your powerful benefits that lessen the burden of purchasing a new home. If you are looking for first-time homebuyer programs, consider the options Hanfincal has listed in this post.
1. 6 First Time Home Buyer Programs Indiana
1.1. 1st-Time Homebuyer Programs
If you are confused about which programs for first-time homebuyer programs to leverage, you will find 1st-Time Homebuyer Programs helpful. Its goal is to help you discover YOUR program, which is tailored specifically to your area and financial capability.
In other words, wherever you live in the United States, it is a housing consultant you will want to work with. Especially, as its name suggests, first-time home buyers are the people it aims to assist. If you are one of them and ready to achieve a new home in Indiana, take your time to find the best financing assistance programs with 1st-Time Homebuyer Programs.
Get a new home in Indiana is very easy with a free consultant here!
1.2. IHCDA First Place program
The IHCDA First Place Program can wipe off obstacles in the early home buying stages for Indiana first-time homebuyers. This program provides a second mortgage of up to 6.0% as down payment assistance (DPA). However, this percentage depends on the purchase price and cannot go over the appraised value.
In addition, this second mortgage does not require interest charges or monthly payments. It’s also given after five years you have lived in the house and not refinanced, sold, or transferred the home to another owner. You can benefit from the program with a 30-year fixed FHA loan.
To qualify, you must meet these criteria:
- You are a first-time home buyer who has not owned a home for the past three years, has been a veteran, or is buying a home in a targeted area.
- You have a minimum credit score of 640 with a debt-to-income (DTI) ratio below 45%.
- With a credit score of 680 or higher, your DTI ratio must range from 45% to 50%.
- Your income must fall within the IHCDA income limits, ranging from $73,300 to $119,560 (this is based on the location of your new home and the number of people living in it).
- Your new property is a single-family dwelling, townhome, condominium, planned unit development, or manufactured home.
- Your newly bought home serves as your primary residence in Indiana.
- You must meet IHCDA home purchase price limits.
1.3. IHCDA Next Home Program
The IHCDA’s Next Home Program has a lower DPA percentage (3.50%) than the First Place Program (6.0%). Nevertheless, how this figure performs is also based on the home purchase price, and it never exceeds the appraised value.
On the IHCDA’s official website, it says that first-time home buyers can pair the Next Home Program with the Mortgage Credit Certificate (MCC) — we will discuss this in the next section. Also, this program works for an FHA fixed loan.
The eligibility requirements are the same as the IHCDA’s First Place program. Typically, these two programs are under IHCDA, so they should have the same criteria for home buyers to qualify.
1.4. Mortgage Credit Certificate
The Mortgage Credit Certificate is another plan offered by IHCDA to reduce the federal income tax liability of first-time homebuyers in Indiana. With that, it helps to boost your income for eligibility simultaneously.
It provides 25% of the mortgage as a direct federal tax credit. Based on how much you borrowed, you can earn up to $2,000 per year within the life of your 30-year mortgage.
This plan aims to support first-time buyers, but qualified veterans and targeted areas can be the exception. You can avail of Mortgage Credit Certificate in accordance with the Next Home Program.
1.5. HAND Down Payment and Closing Cost Assistance
The HAND Down Payment and Closing Cost Assistance is specifically designed for first-time buyers in the city of Bloomington, where Indiana University is located. It provides a second mortgage of up to $10,000 to those whose incomes do not exceed 80% of the city’s median income. This mortgage is forgiven after five years of your homeownership.
You may qualify if:
- You are a first-time home buyer who is buying a new home within the city limits of Bloomington.
- The property you plan to buy at or under $243,000.00 as its appraised value.
- The lender that gives you the first mortgage must allow a second mortgage from HAND.
- Your household income does not exceed 80% of the city’s median income.
To know more about this program, you can find detailed information or honest advice from housing experts at 1st-Time Homebuyer Programs. Based on your needs and situations, it will guide you through the whole process of discovering the best mortgage options and DPA.
2. Local First-time Home Buyers
2.1. Indianapolis First Time Home Buyer Programs
In June 2022, the median list price in Indianapolis ($240,000) saw a 15.4% increase from the same last-year period. As a result, your down payment options must fall between $7,200 (for 3% down payment) and $48,000 (for 20% down payment).
If you’re looking for an amount somewhere in that range, we recommend taking a look at the Indianapolis Neighborhood Housing Partnership. With this program, Indianapolis first-time home buyers can borrow up to $14,999 in DPA.
2.2. Evansville First-time Home Buyers
According to Realtor.com, the median list price in Evansville indicated a 6.6% increase from June 2021 to the same period of this year. With that median price, your down payments might fall between $5,100 (for 3% down payment) and $33,980 (for 20% down payment).
If you’re looking for a DPA program for Evansville first-time home buyers, we recommend the City of Evansville Homebuyer Program. It is formed as a $40,000 loan that can be forgiven after either 5, 10, or 15 years. The life of such a loan depends on the amounts you borrow.
2.3. Fort Wayne Downpayment Assistance Program
According to Realtor.com, the median list price in Fort Wayne showed a 16.6% leap from June 2021 to the same period of this year. With that median price, your down payments might fall between $6,270 (for 3% down payment) and $41,800 (for 20% down payment).
As far as we have researched, technically, there are no DPA options for first-time home buyers in this area. However, if you want to call this place home soon, you can reach out to Community Connections (run by Pathfinder Services) for housing support.
If you are puzzled by a bunch of available programs or simply don’t know what’s exactly on the table for you, contact the 1st-Time Homebuyer Program for help. Its team of experts has a rich database of loan options and DPA programs to provide. Moreover, it analyzes your financial situation as a first time home buyer in Indiana to bring you the best housing advice. From all of that, it can pinpoint precisely what assistance programs you should go for. Hanfincal hopes this article has been helpful!