Indiana FHA Loan Requirements 2026
This guide to Indiana FHA loan requirements covers loan limits for every Indiana county, credit score and down payment requirements, MIP costs, and how FHA financing pairs with IHCDA’s First Step and Next Home assistance programs.
FHA Loan Limits by Indiana County (2026)
FHA loan limits are set by HUD and updated annually based on local median home prices. Unlike many other states, all 92 of Indiana’s counties — including the Indianapolis, Fort Wayne, Evansville, South Bend, and Chicago-metro-adjacent counties — sit at the national floor for 2026.
| County | 1-Unit | 2-Unit | 3-Unit | 4-Unit |
|---|---|---|---|---|
| All 92 Indiana counties (national floor) | $541,287 | $693,050 | $837,700 | $1,041,125 |
Every Indiana county is at the national FHA floor. Even the Indianapolis-Carmel-Greenwood metro — among Indiana’s most expensive markets, with a HUD median sale price of $455,000 — does not clear the roughly $470,700 median needed for an elevated limit. Limits are set per-county by HUD and updated annually; always confirm your exact county limit using HUD’s official FHA Mortgage Limits lookup tool before making an offer.
Indiana FHA Loan Requirements Overview
| Requirement | Standard FHA | Notes |
|---|---|---|
| Credit score | 580 (3.5% down); 500–579 (10% down) | Most Indiana lenders require 620+; IHCDA programs set their own minimums |
| Down payment | 3.5% | Can combine with IHCDA First Step or Next Home assistance |
| DTI ratio | Up to 57% with strong factors | 43% preferred |
| Primary residence | Required | Owner-occupied only |
| Property condition | Must meet FHA Minimum Property Standards | Older Indiana housing stock: check roof, heating system, foundation |
FHA Mortgage Insurance Premiums (MIP)
| MIP Type | Rate | On a $400,000 Loan |
|---|---|---|
| Upfront MIP (UFMIP) | 1.75% of loan amount | $7,000 (typically financed) |
| Annual MIP (monthly) | 0.55%/yr (30-yr, LTV 95%+) | ~$183/mo |
MIP cancellation: FHA MIP is permanent on loans originated after June 3, 2013, with less than 10% down payment. For Indiana buyers who put down 10% or more, MIP cancels after 11 years. Many Indiana borrowers refinance into a conventional loan once they reach 20% equity to eliminate MIP.
FHA vs. Conventional in Indiana
| Factor | FHA | Conventional |
|---|---|---|
| Min credit score | 580 | 620 |
| Down payment | 3.5% | 3–20% |
| Mortgage insurance | MIP (permanent with <10% down) | PMI (cancels at 80% LTV) |
| Max loan limit (statewide) | $541,287 | Conforming limit applies ($832,750) |
| IHCDA pairing | Yes — First Step or Next Home can cover down payment | Yes — IHCDA offers Conventional-eligible programs too |
| Best for | Lower credit, gift/assistance funds, first-time buyers | 680+ credit, plans to cancel PMI, stronger assets |
IHCDA First Step + FHA Combination
First Step can be originated alongside an FHA-insured first mortgage. Here’s how it works on a $300,000 purchase:
| Item | Amount |
|---|---|
| Purchase price | $300,000 |
| FHA down payment (3.5%) | $10,500 |
| First Step assistance (5% of purchase price) | $15,000 |
| Net down payment from buyer at closing | $0 (assistance covers down payment; second mortgage repayment applies afterward) |
First Step’s 5% assistance is a non-forgivable second mortgage, unlike the forgivable down payment assistance programs some other states offer — it covers the upfront down payment but must be repaid over time. Confirm current terms at in.gov/ihcda.
