Indiana Home Buying Programs Offered by the Indiana Housing and Community Development Authority (IHCDA)

Buying a home can be a daunting task, especially for Indiana first-time homebuyers who may not have enough funds for a down payment or closing costs. That’s where the Indiana Housing and Community Development Authority (IHCDA) comes in. The IHCDA is a state agency that offers a variety of homebuyer programs to help Hoosiers achieve their dream of homeownership.

In this article, we’ll take a closer look at the home buying programs offered by the Indiana Housing and Community Development Authority (IHCDA), including eligibility requirements, benefits, and how to apply.

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What is the Indiana Housing and Community Development Authority (IHCDA)?

The Indiana Housing and Community Development Authority (IHCDA) is a government agency in the state of Indiana. It was established in 1978 to help provide affordable housing. Moreover, the main responsibility is to administer programs that increase access to affordable housing, including rental, mortgage, and down payment assistance. Overall, IHCDA’s goal is to create sustainable and vibrant communities in Indiana by expanding affordable housing options and supporting community development efforts.

First Time Home Buyer Indiana Programs Offered by the Indiana Housing and Community Development Authority (IHCDA)

Indiana First Place FHA Program (FP FHA)

Indiana First Time Home Buyer Eligibility Requirements:

• The Down Payment Assistance (DPA) program offers 6% of the purchase price of a home if it does not exceed the appraised value.
• Must be a first-time homebuyer unless the home is in a qualified census tract or targeted area.
• The DPA will be used with either an FHA or a Conventional 30-year fixed-rate loan.
• Minimum FICO credit score of 640 with a DTI of less than 45.00%
• Minimum FICO credit score of 680 with DTI greater than 45.00%, but less than 50.00%

Benefits For Indiana First Time Home Buyers:

• The program provides down payment assistance up to 6% of the purchase price, which can make homeownership more affordable.
• DPA is offered as a forgivable second mortgage, which means there are no monthly payments or interest associated with it. After the first nine years of owning the home, the second mortgage is forgiven.
• Provides homebuyers with the flexibility to choose between FHA and Conventional 30-year fixed-rate loans depending on their individual needs and financial situation; This means that borrowers have a choice of financing options and can select the loan that best fits their preferences and circumstances.
• Offers low credit score and debt-to-income ratio requirements can help ensure that borrowers are financially prepared for homeownership.

Indiana Next Home Program

Eligibility Requirements:

• The Down Payment Assistance (DPA) of 2.5% or 3.5% is based on the purchase price of a home if it does not exceed the appraised value.
• The DPA will be used with an FHA or Conventional 30-year fixed-rate loan.
• Minimum FICO credit score of 640 with a debt-to-income ratio of less than 45%
• Minimum FICO credit score of 680 with debt-to-income ratio greater than 45%, but less than 50%

Benefits:

• The program offers down payment assistance (DPA) of either 2.50% or 3.50%, based on the purchase price of the home, which can make homeownership more affordable and accessible.
• The DPA can be combined with the Mortgage Credit Certificate (MCC) program which provides eligible homebuyers with a tax credit based on the interest paid on their mortgage loan. This can help to further reduce the overall cost of homeownership.
• The program offers both FHA and Conventional 30-year fixed-rate loans providing borrowers with flexibility in their financing options. This allows homebuyers to choose the loan that best fits their individual needs and financial situation.
• It has minimum credit score requirements which ensures that borrowers are financially prepared for homeownership.

Other Indiana First Time Home Buyer Options

FHA 100% DPA

Direct Mortgage Loans offers FHA 100% Financing to eligible homebuyers in Indiana. This program enables homebuyers to obtain 100% financing without having to make a down payment. This is achieved by combining a 1st and 2nd mortgage and is compatible with FHA loans. The 2nd mortgage can be up to 3.5%, based on the lesser of the sales price or appraised value, and has a 10-year term

FHA 100% Financing Requirements

To participate in the program, you need to meet certain requirements, including a minimum FICO credit score of 620. Apart from this, you must also complete a Homebuyer Education course, which aims to educate you about the home buying process. The types of properties that qualify for financing include single-family homes, duplexes, manufactured homes, PUDs, townhouses, and condos.

VA Loans

VA financing loan option for eligible service members, veterans, and surviving spouses. These loans are partially backed by the Department of Veterans Affairs and offer flexible terms tailored to veterans’ needs, including zero down payments.

USDA Loans

USDA loans are a government-backed mortgage option for homebuyers looking to purchase in a designated rural area. These loans, guaranteed by the U.S. Department of Agriculture, eliminate the need for a down payment and private mortgage insurance (PMI).

FHA Loans

FHA loans are a government-backed program to make homeownership more accessible through more lenient lending requirements. With an FHA loan, a borrower could put down as little as 3.5% if their credit score is at least 580, or 10% if their credit score is at least 500. Nevertheless, there is a trade-off; regardless of the amount you put down, there is a requirement to pay for mortgage insurance.

Connect With A Loan Officer To Learn More 

How can I apply for Indiana first time home buyer programs offered through IHCDA?

Here are the steps to apply for a program offered through the Indiana housing and community development:

1. Visit the IHCDA website and review the program guidelines and eligibility requirements.
2. Determine which program is right for you and ensure that you meet the eligibility criteria.
3. Contact Direct Mortgage Loans, a participating lender of this program.
4. Your Direct Mortgage Loans lender will guide you through the application process and help you gather the necessary documentation to apply for the program.
5. Carefully review the guidelines for the program you are applying for, as each program may have different application requirements.
6. Work closely with your loan officer throughout the application process to ensure that your application is completed accurately and efficiently.
7. Once your application is complete and approved, close on your new home and begin enjoying the benefits of the program you have selected.

FAQ’s About Indiana First Time Home Buyer IHCDA Programs 

Can I use the IHCDA’s homebuyer programs to buy any type of home?

Typically, the homebuyer programs offered by IHCDA are intended for the purchase of single-family homes, townhomes, and condominiums. However, some programs may have certain limitations or requirements pertaining to the location or age of the property. To ensure that you are eligible for a specific program and to determine which types of properties are eligible, it’s important to review the program guidelines and eligibility criteria carefully.

Can I use Indiana home buying programs with other types of mortgage loans?

Generally, Indiana Home Buying Programs can be used in conjunction with both FHA and conventional mortgage loans. Nevertheless, it’s important to review the specific guidelines of each program to determine what types of mortgage loans are allowed. Some programs may have specific requirements or restrictions on the types of loans that can be used.

How much down payment assistance can I receive through IHCDA?

The amount of down payment assistance you can receive through IHCDA depends on the specific program you are eligible for. The First Place program offers up to 6% of the purchase price, while the Next Home program offers either 2.50% or 3.50% of the purchase price. Carefully review the program guidelines and eligibility requirements to determine how much down payment assistance you may be eligible for.

Eligibility and approval is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral and underwriting requirements. Direct Mortgage Loans, LLC NMLS ID# is 832799 (www.nmlsconsumeraccess.org). Direct Mortgage Loans, LLC office is located at 11011 McCormick Rd Suite 400 Hunt Valley, MD 21031. Equal housing lender. Down payment funds subject to program availability.