Best First Time Home Buyer Programs in Indiana

Buying your first home can be intimidating, right? Not to worry — there are programs out there that can help you get through the process. Benzinga has put together this guide to help you find the right options for you as a first-time home buyer in Indiana. 

Best First Time Home Buyer Programs in Indiana

• Indiana Home Solution (IHS)
• Helping to Own (H2O)
• Mortgage Credit Certificate (MCC)

Best National First Time Home Buyer Programs

• Best National FHA Lender: CrossCountry Mortgage
• Best National VA Lender: Veterans United
• Best National USDA Lender: Caliber Home Loans

Best Indiana First Time Home Buyer Programs

First time home buyer programs are designed to make your purchase a little easier on your wallet and your well-being. Take a look at the following programs to help you move forward in the first time mortgage process.

1. Indiana Home Solution (IHS)

The Indiana Home Solution program is available to first time home buyers or buyers who are purchasing in a targeted area. It offers a 30-year fixed FHA mortgage loan. You can find more information about FHA loans under the national programs featured in this article. 

This program also offers down payment assistance (DPA) of 6%. The purchase price of your home can’t be higher than the appraised value of your home if you wish to use this assistance. If you decide to get down payment assistance, you can use it for your down payment as well as your closing costs. 

To enroll in this program, you’ll have to get your mortgage loan through a participating lender. Be aware that participating lenders can charge a 1% origination fee and up to $1,000 in lender customary fees.

Eligibility Requirements: 

• You must be a first time home buyer or a buyer purchasing in a targeted area.
• You must have a minimum credit score of 660.
• Your income cannot exceed the program’s income limits. The income limits vary, depending on which county you are planning to purchase your home in.

2. Helping to Own (H2O)

The Helping to Own program is available to first time home buyers or those who are purchasing a home in a targeted area. It offers 30-year fixed-rate FHA loans. What really sets this program apart is that it offers 100% financing — you don't need to make a down payment on your new home. However, if you do decide that you want to make a down payment, you may be able to get a down payment assistance grant of 3.5%. You won’t need to pay back the money received from the down payment assistance grant. 

Eligibility Requirements: 

• You must be a first time home buyer or a buyer purchasing a home in a targeted area.
• You must have a minimum credit score of 660.
• Your income cannot exceed the program’s income limits. The income limits vary depending on the number of people who will live in your home and the county your new home is in.

3. Mortgage Credit Certificate (MCC)

Indiana’s Mortgage Credit Certificate program is designed to help you save money throughout the lifetime of your mortgage loan. You can use a mortgage credit certificate with your 30-year fixed-rate mortgage loan. The fixed rate you pay will be set by your mortgage lender. You will also be able to combine this program with the national first time home buyer programs discussed in this article. 

If you use this program, you’ll receive a federal tax credit on your mortgage’s interest tax. This will reduce the amount of federal income taxes you’ll need to pay each year. Using this program could also allow you to save thousands over the lifetime of your mortgage loan.

Eligibility Requirements: 

• You must be a first time home buyer, a veteran or a buyer purchasing a home in a targeted area.
• You must own and occupy your home for as long as you are using the Mortgage Credit Certificate.
• Your income cannot exceed the program’s income limits. The income limits vary depending on which county you are planning to purchase your home in.

Best National First Time Home Buyer Programs

In addition to the first time home buyer programs in Indiana, there are national first time home buyer programs. Take a look to see if you might qualify, and take a look at Benzinga’s suggested lender for each program.

FHA Loans

FHA loans are mortgages issued by lenders approved by the Federal Housing Administration (FHA). The program is designed to help low- and moderate-income borrowers achieve homeownership. It does this by accepting lower credit scores and minimum down payments.

To qualify for an FHA loan, you must:

• Be able to provide proof of employment and a steady income.
• Have a FICO credit score of at least 580 and be able to make a down payment of 3.5% of your home’s purchase price.
• Alternatively, if you have a FICO credit score between 500 and 579, you can qualify if you’re able to make a down payment of 10% of your home’s purchase price.
• The home you’re purchasing must be intended to be used as your primary residence. This means it cannot be purchased as a second home or investment property.
• You must move into your new home within 60 days of closing.
• Your debt-to-income ratio must be less than 43%. This ratio is the amount of debt you have compared to your total income.
• You’ll be required to pay a mortgage insurance premium (MIP). 
• The home you’re purchasing has to meet the minimum property standards. An approved home inspector will perform an inspection of your home to ensure that it meets these standards.

If you need help making the minimum down payment, you may be able to receive a grant to help with this cost. The Federal Housing Administration insures FHA loans. If you default on the loan, it pays a claim to your mortgage lender. This is why you are required to pay the mortgage insurance premium to the Federal Housing Administration.

Best National FHA Lender: CrossCountry Mortgage

CrossCountry Mortgage makes it easy for all types of home buyers to get approved for a mortgage. Their flexible requirements can help you get financing, with no employment or income verification and no minimum DTI. CrossCountry Mortgage offers traditional loan terms, as well as more flexible mortgage payment plans with their 40-year loan program.

It’s also easier to get approved if you’re self-employed. Tax returns are not required and you’ll only need 1 year of self-employment income history and a minimum credit score of 580. CrossCountry Mortgage can also help you get approved on assets alone, like your bank statements, stocks and bonds, or retirement accounts. 

CrossCountry Mortgage is licensed to lend in California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington.

VA Loans

VA loans are a type of mortgage loan guaranteed by the U.S. Department of Veterans Affairs (VA). It’s available to veterans, service members and some military spouses as long as you meet the service requirements set by the VA. VA loans are a great option if you qualify because no down payment or private mortgage insurance is required. VA loans also offer additional benefits to qualified borrowers, including assistance if you fall on hard times to help you avoid defaulting on your mortgage loan.

Sounds good, right? You must meet one of these requirements to qualify for a VA loan. You must have:

• Served 90 consecutive days of active duty during wartime.
• Served 181 days of active duty during peacetime.
• Served in the National Guard or Reserves for at least 6 years.
• Been the spouse of a military member who passed away either in the line of duty or from a service-related disability.

Best National VA Lender: Veterans United

If you qualify for a VA loan, you’ll want to find a lender who understands everything that you’ve been through. Veterans United makes an active effort to employ those who have served in all branches of the armed forces themselves.

So if you call this lender with a question or in need of advice, you very well could find yourself talking to a fellow service member. The customer service team is available 24/7, and you can apply online for preapproval.

USDA Loans

Are you interested in buying a home in a rural area? You might want to look into a USDA loan. These mortgage loans are available if you’re buying a home in an area that has been designated by the U.S. Department of Agriculture (USDA). It’s designed to encourage and incentivize homeownership in these areas. Most of the areas are rural, but you may be able to find a designated suburban area as well. 

These mortgage loans typically come with low down payments, lower credit score requirements and competitive interest rates. The USDA also guarantees USDA loans, so if you default on the loan, it will pay your lender a certain amount of your mortgage to help cover the loss.

USDA loans only have a few requirements:

• You must be purchasing a home in a qualifying area.
• The home you are purchasing must be intended to be used as your primary residence.
• You must make less than the maximum income limits. These limits vary from county to county. 

Best National USDA Lender: Caliber Home Loans

Caliber Home Loans offers USDA mortgage loans with competitive interest rates and $0 down payments. It also ensures that all of the closing costs for your home are paid by the seller of your home. One of the major benefits of Caliber Home Loans is that it offers several physical locations throughout Indiana.

This is great if you prefer to work with a loan officer in person. You can also contact customer service with any questions by sending a secure message online or through its dedicated customer service telephone line.

When you start any mortgage process, it’s important to consider your finances. Your lender will want to see proof of your steady employment and income. This means that even if you’re self-employed, you should be prepared to show income statements, tax returns or other financial documents.

Then you’ll want to reach out to lenders or financial advisors to see if there are any first time home buyer programs you qualify for. Once you’ve found the right program, all you need to do is work with your lender to ensure you apply in compliance with the requirements.

Buying your first home can seem overwhelming, but with a combination of first time home buyer programs, you can find the support to make it happen.

Frequently Asked Questions