FHA Loans in Indiana — What Buyers Need to Know

Buyer GuideIndiana · White County

FHA Loans in Indiana — What Buyers Need to Know

How FHA loans work in Indiana — minimum down payment, credit score requirements, 2024 loan limits, mortgage insurance, and how FHA applies at Monticello’s median price.

Michael Sims Redlow GroupRyan Clemons Redlow Group

Michael Sims & Ryan Clemons
Co-Chairmen & Founders · Redlow Group
Published • Updated
Quick Answer

How do FHA loans work for buyers in Indiana?

FHA loans in Indiana are government-backed mortgages insured by the Federal Housing Administration that allow buyers to purchase with a minimum 3.5 percent down payment with a credit score of 580 or higher. Specifically, for a home at Monticello’s $257,500 median sold price, a 3.5 percent down payment is $9,012. Furthermore, FHA loans require mortgage insurance premium (MIP) — an upfront premium of 1.75 percent of the loan amount plus an annual premium of approximately 0.55 percent — for the life of the loan in most cases. Additionally, FHA has minimum property condition requirements that can affect which homes qualify.

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This guide is part of the Redlow Group buyer education series for Monticello Indiana and White County.

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FHA Loan Requirements in Indiana

FHA loans require a minimum credit score of 580 for the 3.5 percent down payment option, or 500 to 579 for the 10 percent down option. Furthermore, FHA requires the property to be the buyer’s primary residence — FHA cannot be used for investment properties. Additionally, the debt-to-income ratio limit is generally 43 percent. Moreover, FHA has minimum property requirements — active roof leaks, exposed wiring, broken windows, and structural problems must be repaired before closing, which can complicate offers on fixer properties.

FHA Loan Limits in Indiana — 2024

For most Indiana counties including White County, the 2024 FHA single-family loan limit is $498,257 according to HUD. Specifically, Monticello’s $257,500 median is well below this limit, meaning virtually every home in the market is eligible from a loan limit standpoint. Furthermore, buyers targeting higher-priced lakefront properties should confirm the specific purchase price falls within the FHA limit.

FHA Mortgage Insurance Premium (MIP)

FHA requires two forms of mortgage insurance: an upfront MIP of 1.75 percent of the loan amount — financeable into the loan — and an annual MIP paid monthly. Specifically, on a $248,000 loan (3.5 percent down on $257,500), the UFMIP is $4,340. Furthermore, the annual MIP rate for most FHA loans with less than 10 percent down is approximately 0.55 percent per year — about $113 per month. Additionally, FHA MIP on loans with less than 10 percent down now remains for the life of the loan, unlike removable conventional PMI.

FHA vs. Conventional and USDA in White County

For buyers with credit scores above 680 and at least 5 to 10 percent down, conventional financing may be more cost-effective long term due to removable PMI versus FHA’s lifetime MIP. Furthermore, White County qualifies for USDA rural housing loans, which offer zero-down financing with lower annual mortgage insurance (0.35 percent vs 0.55 percent) than FHA. For buyers comparing options, see the USDA loans guide and conventional loans guide.

Frequently Asked Questions

What is the minimum down payment for FHA in Indiana?
3.5 percent for buyers with a 580+ credit score. Scores between 500 and 579 require 10 percent down.
What is the FHA loan limit in White County Indiana?
The 2024 FHA loan limit for White County is $498,257 for a single-family home — well above Monticello’s $257,500 median.
Does FHA require mortgage insurance in Indiana?
Yes — upfront MIP of 1.75 percent and annual MIP of approximately 0.55 percent. For loans with less than 10 percent down, MIP remains for the life of the loan.
Can FHA be used for lake homes in Indiana?
Yes — provided the home is the buyer’s primary residence, within FHA loan limits, and meets FHA minimum property standards.
What credit score do I need for FHA in Indiana?
580 or higher for 3.5 percent down. 500 to 579 for 10 percent down. Below 500 does not qualify.
Is USDA or FHA better for White County buyers?
For eligible buyers, USDA offers zero down with lower annual mortgage insurance costs than FHA. Buyers who meet USDA income and property eligibility should compare both options.

Buying in Monticello? Start with a Free Consultation.

Redlow Group provides full buyer representation across Monticello, White County, and northwest Indiana.

FHA loans in Indiana require a 3.5 percent minimum down payment with a 580+ credit score — $9,012 on Monticello’s $257,500 median. The 2024 FHA loan limit for White County is $498,257, covering virtually the entire market. Mortgage insurance includes a 1.75 percent upfront premium and approximately 0.55 percent annual premium for the life of the loan. FHA property condition requirements apply. Buyers with stronger credit and 5 to 10 percent down should compare FHA to conventional and USDA to find the best long-term cost.

FHA opens the door for a lot of buyers. Just understand what’s on the other side of it.

Redlow Group
Your Monticello Indiana Buyer Specialists · redlowgroup.com

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