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Mortgages in Indiana
Through working with a participating mortgage lender, the IHCDA will loan you money to help with your down payment and closing costs.
The home you’re buying will have to serve as your primary residence. Your income and the home’s purchase price must also fall within certain regional limits.
More: Use these savings accounts to build up your down payment.
If you’re ready to get going, the IHCDA recommends you have your lender complete a pre-qualification. The lender will review your credit, debt and income situation to determine which mortgage suits you best.
When you apply for your loan, your lender can help you apply for these down payment assistance programs as well.
The First Place down payment assistance program offers borrowers 6% of their overall purchase price on a 30-year fixed-interest-rate FHA loan.
This program is reserved for first-time homebuyers unless the property is located in one of Indiana’s target areas or the buyer is a veteran.
If your debt-to-income ratio is under 45%, you’ll need a minimum credit score of 640. If your ratio is in the 45% to 50% range, you’ll need a credit score of at least 680.
More: Get a free credit score and credit monitoring from Credit Sesame.
With Next Home, you can get down payment assistance of 3.5% on an FHA 30-year fixed-rate loan. You don’t need to be a first-time buyer to qualify.
The credit score requirements are the same as with the First Place program: If your debt-to-income ratio is under 45%, you’ll need a minimum credit score of 640. And if your ratio is in the 45% to 50% range, you’ll need a credit score of at least 680.
Unlike First Place, this program can be used in conjunction with the Mortgage Credit Certificate (MCC).
Mortgage Credit Certificate
An MCC can help you reduce the amount you owe in federal income tax each year — and in doing so can increase your qualifying income.
This program is reserved for first-time homebuyers, with the exception of veterans and individuals buying property in targeted areas.
The MCC can be used with the Next Home program and with government-backed loans (Ginnie, Fannie or Freddie).
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