Indiana First Time Home Buyer Programs of 2023

We get a lot of questions about buyer assistance programs. Yes, there are first time home buyer programs Indiana. We have answers to help the Indiana first time home buyer make the best decisions and when using available programs.

This article will inform you what buying assistance programs are available on a national level, and we will discuss Indiana home buying programs including first time home buyer programs in Northwest Indiana.

National Home Buying Programs

1. Veteran’s Affairs (VA) Loans

The Department of Veteran’s Affairs offers qualifying veterans a special loan with a 0% down payment. An Indiana first time home buyer can use this program.

Pros

The qualifying veteran buyer puts 0% down on the home purchase, and there is no private mortgage insurance. Not having private mortgage insurance greatly reduces the buyer’s monthly payment.

Cons

The veteran must still pay the closing costs. However, the VA loan program allows a seller to offer the buyer a credit of up to 4% of the purchase price to cover closing costs. Here at Quadwalls.com our Quadwalls Connected Agents have had tremendous success in getting sellers to pay some or even all of our buyer’s closing costs.

Also, not just any home will work. The home the buyer wants to purchase must meet the minimum property requirements. Some sellers refuse to accept VA loans due to this. What are minimum property conditions? That is an article for another day. Don’t worry though, your Quadwalls Connected Agent understands this and will help you once you get started.

Lastly, the VA funding fee is 2.3% of the borrowed amount, which is a bit high. However, this fee can be rolled into the loan.

Eligibility

The buyer must be a qualifying veteran. Essentially, the buyer served enough time in the military and did not get a dishonorable discharge. The buyer’s lender will review the buyer’s DD-214 papers to qualify the buyer. Also, a surviving spouse of a qualifying veteran can also use the benefit.

Best Candidate For The Program

Any qualifying veteran. Veterans you gave your time in service to our country. Please, take advantage of the benefits you have earned.

2. USDA Loans

Did you know the United States Department of Agriculture offers mortgages? No, you do not need to be a farmer, and no, you do not need to be buying a farm! Best of all, these mortgages are 0% down! This program is designed to prop up and maintain the many rural areas of America. An Indiana first time home buyer should look at this program. Many areas of Indiana are included in this program.

Pros

The buyer can buy a home with a 0% down payment.

Cons

From a user point of view there really are not any. However, home selection can be a little tougher. First, the home must be in a qualifying area. You will read more about this in the eligibility section. But, the property must also meet minimum property standards.

Minimum property standards may sound scary, but it really isn’t. For now, all you need to know is not every seller in a USDA eligible area will be willing to accept USDA financing. Our Quadwalls Connected Agents can set you up with a home search which only targets homes that are both in a qualifying area and where the seller is willing to accept USDA financing.

Eligibility

First, the home must be in a designated USDA area. USDA eligible areas are away from large and medium sized cities. Most USDA areas are about 15 miles from any city of over 20,000 people. Massive amounts of America and plenty of areas in Indiana are in USDA eligible areas. Click here to view a map of USDA eligible areas.

Also, the buyer must meet the income requirements which are based on household income and size. The program is designed to help lower income families. Though the USDA provides a calculator for this, it can be difficult to use. We encourage our readers to contact us. We can point you to a lender we have used frequently to qualify buyers for the USDA program.

Best Candidate For The Program

Lower income families who want to own a home in a rural area. It really is a great program.

3. A Federal Housing Administration (FHA) Loan

This is the big pumba of housing assistance. FHA loans are remarkably common. And no, the ‘F’ does not stand for “first.”

Pros

There are three major benefits of FHA loans. First, the buyer only needs to make a 3.5% down payment. Second, the buyer can have a credit score as low as 580. Third, a buyer can receive a seller concession of up to 6% of the home purchase price. This helps reduce closing costs.

Cons

Your home loan will require you to have private mortgage insurance, and the rate can be a little high compared to conventional loans. Also, the property you buy must meet minimum property requirements.

Eligibility

Anyone with a 580 credit score or higher, though some specific lenders who offer FHA loans may require a higher score or other compensating factors. If your FICO score is over 620, most lenders will write the loan without compensating factors. And no, you do not need to be a first time home buyer to get an FHA loan.

Best Candidate For The Program

Anyone wanting to purchase a home who can meet the credit score requirements but needs help with the down payment.

Indiana Home Buying Programs

The Federal Housing Administration (commonly referred to as FHA) has given its blessing to these programs offered by several state and municipal agencies to help Indiana first time home buyers. Each of these home buying programs in Indiana can be paired with your FHA loan to lower your out of pocket expenses.

1. First Time Home Buyer Down Payment Assistance

This program is supported by the Homeownership Opportunity Network. The purpose of the program is to provide assistance by way of a forgivable loan with having enough cash to close on the mortgage or to lower the initial first mortgage borrowed amount. The latter reason is to help buyers qualify for the loan by lowering their debt-to-income ratio.

Pros

The assistance is in the form of a forgivable loan. The program offers up to $10,000 in assistance.

Cons

Forgivable loans are still a debt. Also, the program is only set up for properties located in Gary, Indiana, so the geographic reach of the program is quite limited.

Eligibility

First, the person must be a first time home buyer, or has not owned a home within the last three years. Secondly, the person must meet the income requirements. Third, the property must be located in one of the named areas of Gary, Indiana.

Best Candidate For The Program

This program is best for someone wanting to own a home in Gary, Indiana who meets the income requirements.

2. Homebuyers Assistance Program

This is another of the first time home buyer programs in Northwest Indiana designed to assist people wanting to purchase a home in Lake County, Indiana who are in need of help with the down payment, closing costs, and other fees the buyer will be charged at closing. The program awards $5,000 to qualifying applicants. This money is meant to be used towards upfront costs such as closing costs & fees and your down payment.

Pros

This is cash made available to the qualifying buyer. The funds do not need paid back.

Cons

The program is only applicable to certain cities and towns in Lake County, Indiana. This limits where the buyer can purchase a home, which may not work for some buyers.

Eligibility

The home you are buying must be in one of the Lake County Community Economic Development Department’s Entitlement Area which include: Cedar Lake, Dyer, Crown Point, Griffith, Highland, Hobart, Lake Station, Lowell, Merrillville, Munster, New Chicago, Schneider, Schererville, St. John, Whiting, Winfield, and all unincorporated areas in Lake County.

Also, the buyer’s annual income must be under 80% of area median income as outlined by HUD. This is based on the size of the buyer’s household.

Best Candidate For The Program

The best candidate for the Homebuyers Assistance Program would be someone whose income is below the 80% of the HUD median household income level and wants to purchase a home in Lake County, Indiana.

3. Next Home

Next Home the most commonly used of the first time home buyer programs in Indiana. Unlike some of the other state sponsored Indiana home buying programs, Next Home can be used anywhere in Indiana.

Indiana Housing & Community Development Authority (IHCDA) where buyers can receive assistance for closing costs and their down payment. The total amount a buyer can receive is based on the buyer’s loan type. Buyers using an FHA loan can get up to 4% of the purchase price of the home. For buyers using a conventional loan the assistance amount is capped at 3% of the home’s purchase price.

Pros

The assistance is in the form of a 0% interest loan with no monthly payments. Once the buyer has stayed in the home for two years this loan is forgiven.

Cons

Honestly, there are not any. And here at Quadwalls.com we have helped many borrowers utilize this program.

Eligibility

The home can be anywhere in Indiana. The buyer must have a credit score of 660 ro more, use a lender participating with this program, and the buyer must complete an online homeowner and financial planning course. The buyer must also pay a $75 fee for the course, but the buyer will get this back at closing.

Best Candidate For The Program

Anyone wanting to buy a home in Indiana who needs assistance covering the down payment or closing costs.

Conclusion

Quadwalls.com and its team of Quadwalls Connected Agents have both the knowledge and experience to help home buyers use these programs and purchase a home. We love our Indiana first time home buyers! We help people at all different income and purchasing levels. And we’d like to help you, too.

Start searching for homes on Quadwalls.com. Contact us and we will be ready to show you any home you’d like to see. Also, feel free to complete any of the contact forms if you have more questions about receiving assistance with buying your home.