Indiana Home Loan Programs for Veterans

The State of Indiana has veteran-friendly home loan programs that include down payment assistance and even a relocation allowance for qualifying applicants. These programs are administered through the Indiana Housing and Community Development Authority (IHCDA) in partnerships with a network of participating lenders and local agencies.

The Honor Our Vets Program

Honor Our Vets was created under Indiana’s Next Level Veterans initiative. This program helps both qualifying applicants and Indiana employers–Honor Our Vets helps Indiana businesses recruit veterans for Indiana jobs with a relocation allowance incentive of $5,000 per household (in FY 2020—the amount is subject to change depending on demand and other variables).

Who Qualifies

To qualify for relocation assistance, veterans must create a profile on the INVets official site and be open to accepting a job in Indiana from another state. To qualify for the relocation funds, the following must occur:

• The veterans must accept a job with an Honor Our Vets Participating Employer.
• The veteran must confirm relocation expenses with the employer.
• The Honor Our Vets Participating Employer “will reimburse the veteran for relocation expenses that are eligible” up to $5,000. It may take time to process the payment, don’t expect these funds immediately.

Indiana Housing and Community Development Authority (IHCDA) First Place

This Indiana veteran-friendly First Place loan features down payment assistance of six percent based on the purchase price of the home (but may not exceed the appraised value) for first-time home buyers OR qualifying veterans.

This program features a 30-year fixed rate FHA mortgage and there are minimum FICO score requirements. Purchase price caps, income eligibility, and other variables may apply.

At the time of this writing, conventional loans are not supported by IHCDA programs.

IHCDA Helping To Own (H2O)

Helping To Own is a program offering Down Payment Assistance of 3.5% (based on purchase price and must not exceed the appraised value) for first-time home buyers or qualifying veterans. This assistance may be considered a grant as long as program guidelines are met.

This program features a 30-year fixed rate mortgage. Minimum FICO scores apply, income caps and purchase price limits may also be applicable. Purchases in targeted areas may be subject to additional consideration.

Household size for this program is determined” by the number of Mortgagor(s), along with dependents listed on the Uniform Residential Loan Application” plus those expected to live in the home after closing day. Special income guidelines apply, but income limits vary by county and are dependent on family size.

At the time of this writing, conventional loans are not supported by IHCDA programs.

Mortgage Credit Certificate (MCC)

This federal income tax credit is offered to help qualifying borrowers reduce their tax debt associated with owning a home but it can also be used to help a borrower get closer to the qualifying income limits for certain programs like those mentioned above.

To qualify for MCC the applicant must be a first-time homebuyer or a qualifying veteran.

Considerations To Remember

• Some programs may have restrictions on the number of living units the home secured with the appropriate loan can have. The programs seen on this page are for primary residences only.
• In cases where a borrower is using one of the above programs in conjunction with the purchase of a home they are renting or have rented previously, “the Participating Lender must supply a current lease agreement, purchase agreement, appraisal and a thirty-six (36) month chain of title with the IHCDA Affidavit.”
• Tax documents will be required as a condition of approval “unless the subject property is located in a qualified census tract or the borrower is a qualified veteran.”
• Co-signers of the Mortgagor are allowed as long as GSE guidelines are met. Non-occupying Co-Mortgagors are allowed. Where income caps apply, “IHCDA does not include Co-signer and Non-occupying Co-Mortgagor income” in the total household income. However, all occupying borrower income will be considered.
• Your participating lender must advise you “of the importance of obtaining an independent home inspection” for any purchase.
• The definition of “first time home buyer” includes those who have not have had an ownership interest in his or her principal residence within the past three years but don’t forget that veteran status for the above programs usually results in no requirement for being a first-time buyer.
• Any borrower who meets the definition of a first-time homebuyer may be required to complete a homeownership training program. This may even apply to qualifying veterans depending on circumstances.

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Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News

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