Buying a home is an exciting but daunting experience. If you're looking to purchase a home in the state of Indiana, first-time home buyer grants can offer financial assistance and support along the way.
To help make it possible for first-time buyers to get a property, a few eligibility criteria need to be satisfied before applying for first-time home buyer grants. Generally, this includes income thresholds and house costs within established parameters, as well as first-time buyers being able to demonstrate a commitment to homeownership.
Applying for first-time home buyer grants Indiana is relatively straightforward, with clear guidelines about how and where applications can be made and what documents will be required. It's worth researching which grants and schemes in Indiana are applicable so that you can use those resources available for first-time buyers and take your first steps onto the property ladder.
Indiana Home Buyer Overview
According to the Indiana Association of Realtors, Indiana's median home sale price in May 2022 was $245,000. This is higher by 14.8% compared to the past year but still below the U.S. median home price of $428,000.
The price hike makes it difficult for home buyers in Indiana to afford their dream homes. Fortunately, the state has several down payment assistance programs to help first-time home buyers.
To be considered a first-time buyer, you must not have had any previous home ownership.
First-time Home Buyer Grants (Indiana)
Here are the different first-time home buyer grants Indiana designed to help you afford your first home:
First Place Program
The first place program is a down payment assistance (DPA) program for first-time home buyers with an FHA loan from the IHCDA program. The assistance is a second mortgage that becomes a forgivable loan for up to 6% of the property purchase price.
- Must take out a 30-year FHA loan
- First-time home buyer who has had no home ownership in the past three years
- Minimum credit score of 640
- Meet IHCDA income limits
- Property must be within Indiana
How To Apply
To start the application, look for a qualified lender and apply through them. They will perform the pre-qualification and review your eligibility.
Next Home Program
This down payment assistance program is open to anyone, not just first-time homebuyers. The assistance provided is up to 3.5% of the purchase price.
- Minimum FICO credit score of 640
- Get an FHA 30-year fixed plan
- Satisfy IHCDA's income and purchase price limits
How To Apply
To participate in the program, complete the questionnaire on the IHCDA's website. This will help you determine the amount of assistance you can get. Then, get in touch with mortgage lenders and compare mortgage rates and options.
Mortgage Credit Certificate
Indiana lets you reduce your tax bill through the Mortgage Credit Certificate program. You can get up to a $2,000 tax credit per year, which is equivalent to as much as 25% of the borrowed amount. This credit is useful in reducing your taxes throughout your 30-year mortgage.
You can use it alongside the Next Home Program. However, take note that it charges an $800 program fee.
- Meet IHCDA's income and purchase price limits
- Considered a first-time home buyer that hasn't purchased a property in the past 3 years
- Purchasing a property within Indiana's boundaries
How To Apply
To apply to the program, you must take out a mortgage loan from a qualified lender approved by the Housing Finance Authority.
Frequently Asked Questions
Do you still have questions about first-time home buyer grants Indiana? Then check out these FAQs.
To qualify for any assistance programs, you must have a minimum FICO credit score of 640 and a debt-to-income ratio of less than 45%. If your debt-to-income ratio is greater than 45% but less than 50%, then the minimum FICO credit score increases to 680.
To qualify for a mortgage in Indiana, you must meet the income and purchasing limits set by the Indiana Housing & Community Development Authority (IHCDA). A participating mortgage lender will evaluate your eligibility criteria and let you know which assistance programs you can participate in.
As of 2021, the average age of first-time homebuyers in Indiana was 33. These people haven't purchased any property in the past three years.
Owning your dream home is not difficult in Indiana. If you lack the resources for a down payment, check out the programs mentioned above and see which ones you qualify for. Take advantage of these programs to afford your first home.
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