Current FHA guidelines, updated from one source.
Read these as program parameters, not an offer: the minimum investment, the credit score for maximum financing, the mortgage insurance premiums, and the ratios, all from one guideline source that this page refreshes from.
Up to 96.5% loan-to-value on a purchase
HUD sets the minimum required investment at 3.5% of the lesser of the price and the appraised value, which puts the purchase loan at up to 96.5% loan-to-value; the entire investment may come from an acceptable gift.
Decision score for maximum financing
The program opens at a 580 decision score for maximum financing; borrowers without a usable score are eligible under manual underwriting on non-traditional credit, and the ratios then follow the manual ladder below.
Plus 0.50%–0.55% a year on most thirty-year loans
1.75% upfront plus 0.50%–0.55% a year on most thirty-year loans is the price of the leverage; larger base loans carry a higher annual tier, fifteen-year loans a lower one, and the calculator applies HUD’s schedule to the figures you enter.
Housing and total debt, manual reference
The manual-underwriting reference ratios are 31/43 for housing and total debt; with documented compensating factors the ladder below stretches them, and automated underwriting commonly allows more than the manual reference.
| Decision score | Housing / total | Compensating factors |
|---|---|---|
| 500–579 or no credit score | 31% / 43% | not applicable — ratios may not exceed 31/43 (energy efficient homes 33/45) |
| 580 and above | 31% / 43% | no compensating factors required (energy efficient homes 33/45) |
| 580 and above | 37% / 47% | one of: verified and documented cash reserves; minimal increase in housing payment; residual income |
| 580 and above | 40% / 40% | no discretionary debt |
| 580 and above | 40% / 50% | two of: verified cash reserves; minimal increase in housing payment; significant additional income not reflected in effective income; residual income |
| Base loan | Leverage | Annual premium | Duration |
|---|---|---|---|
| Standard base loan amounts | at or below 90% LTV | 0.50% | 11 years |
| Standard base loan amounts | above 90% to 95% LTV | 0.50% | mortgage term |
| Standard base loan amounts | above 95% LTV | 0.55% | mortgage term |
| Larger base loan amounts | at or below 90% LTV | 0.70% | 11 years |
| Larger base loan amounts | above 90% to 95% LTV | 0.70% | mortgage term |
| Larger base loan amounts | above 95% LTV | 0.75% | mortgage term |
Refinances: rate-and-term to 97.75% loan-to-value on a home occupied for the past year; cash-out to 80% after twelve months of ownership and occupancy; streamline refinances of an existing FHA loan without an appraisal. Sellers and other interested parties may contribute up to 6% of the price toward closing costs; the entire minimum investment may be a gift.
Current FHA snapshot · updated October 1, 2026 · owner-occupied principal residences, one to four units · county loan limits apply — ask a Lendmire loan officer for the limit where you are buying · FHA loans are assumable · Lendmire is not affiliated with FHA or HUD.
Informational only; not a commitment to lend, an approval, or a quote. Every figure on this page is a program parameter read from Lendmire’s guideline source, built on HUD’s handbook, and may change without notice; eligibility, the loan amount, the premiums, and the ratios depend on the credit profile, the appraisal, the property, the county limit, and full underwriting. A licensed loan officer provides the terms for a specific loan in writing. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government. Lendmire, LLC, NMLS #2371349. Equal Housing Opportunity.
What an FHA loan is — and how the file is qualified.
What makes FHA different from a conventional loan is the insurance: because HUD stands behind the lender, the program can accept a smaller investment, a lower score, and higher ratios than the agencies do. The cards below walk an Indiana buyer through the parts.
For the program overview, see Lendmire’s FHA loan program; for help with the minimum investment, the down payment assistance program.
The minimum required investment
HUD requires the buyer to invest a set share of the lesser of the price and the appraised value; the loan covers the rest. On an Indiana purchase the investment can be the buyer’s own savings, a gift from a family member or another acceptable donor, or approved secondary financing, and closing costs are separate from it.
The decision score sets the leverage
Credit does two jobs on an Indiana FHA file: the decision score decides the leverage, and the history decides the underwriting path. A recovered credit profile with seasoned events qualifies; recent housing lates and unseasoned events are the problems the program does not forgive.
Two premiums: upfront and annual
Mortgage insurance is the price of the leverage. HUD sets both premiums by schedule rather than by credit score, which is why an Indiana buyer with a modest score pays the same premium as one with a strong score; a conventional loan with private insurance prices the score, which is the comparison worth running.
Qualifying ratios and compensating factors
Effective income is the income the lender can document as stable and likely to continue, and the ratios are measured against it. An Indiana buyer with a modest score is held to the base ratios; above the maximum-financing score the compensating factors open the higher tiers.
The calculator applies this to an Indiana scenario: enter the price and the down payment, pick the term, and the upfront premium, the annual premium for that leverage and loan size, and the escrows build the payment. Enter income to see the ratios.
Where Indiana’s first-time and moderate-income buyers shop — and how FHA fits.
Before the calculator, the backdrop: Indiana’s owner households, median values, and household incomes, drawn from the U.S. Census Bureau. They explain why FHA files differ so much from one market to the next at the same decision score.
Statewide figures provide general market context, not an appraisal or an income calculation. A high median value means a larger minimum investment and a larger premium in dollars; a modest median value means a file that clears the county limit easily. Neither changes the program’s percentages, only what they amount to.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Where Indiana’s FHA buyers shop — market by market.
The Indiana markets below hold the largest pools of owner households in the state’s footprint. Each has a city guide of its own; the program, the premiums, and the ratio ladder are the same everywhere in the state, and the county limit changes.
Indianapolis
Indianapolis holds one of the largest pools of owner households among Lendmire’s Indiana markets — roughly 203,339, about 56% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $224,800, median household income near $66,219, population near 886K.
Fort Wayne
In Fort Wayne, owner households number near 68,641, about 62% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $188,900, median household income near $61,422, population near 269K.
Evansville
Roughly 28,987 Evansville households own their homes (55% of the total), which makes it a metropolitan market where FHA purchases close across a wide range of prices and property types. Census context: median value near $143,100, median household income near $53,387, population near 116K.
Carmel
In Carmel, owner households number near 28,551, about 74% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $486,800, median household income near $141,505, population near 102K.
Fishers
In Fishers, owner households number near 28,420, about 76% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $391,000, median household income near $130,203, population near 102K.
South Bend
In South Bend, owner households number near 24,861, about 60% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $140,400, median household income near $55,786, population near 103K.
The Indiana rules that matter most on an FHA file are the ones that do not vary by city: the investment, the premiums and their duration, the decision score, the ratios, and the seasoning after a credit event. The county loan limit moves every year, and it is confirmed by a loan officer rather than quoted here.
Four ways Indiana buyers put an FHA loan to work.
A good use of FHA is one the program’s shape fits: a modest investment, a forgiving score, ratios with room to stretch, and insurance that makes the leverage possible. Four common Indiana uses follow.
Buy a condominium in an approved project
Condominiums are a common first purchase in Indiana, and FHA finances them in approved projects or through single-unit approval. The approval question is handled on the lender’s side; the buyer’s file is the same as for a house.
Take cash out of a home with equity
An FHA cash-out refinance lets an Indiana owner who has lived in the home for the past year borrow against equity up to the program’s cash-out leverage, with the upfront and annual premiums applying to the new loan; a HELOC that leaves the first mortgage alone is the comparison worth running.
Buy a first home with the minimum investment
The most common Indiana FHA file: a buyer with steady income, a modest down payment that may be a gift, and a decision score at or above the threshold for maximum financing. The seller can help with closing costs, and the ratios allow for a documented compensating factor.
Buy a small multi-unit home and live in one unit
FHA finances owner-occupied homes of up to four units with the same minimum investment as a house. An Indiana buyer who lives in one unit and rents the others can count part of the rental income toward qualifying, within HUD’s rules for multi-unit purchases.
Estimate the FHA payment on an Indiana price before requesting a quote.
Use this to see what an Indiana FHA purchase costs each month at the program’s leverage: it applies the upfront premium to the base loan, the annual premium for the term and leverage, and the escrows, then measures the ratios against any income you enter. The rate is the weekly Freddie Mac average, editable, and not a quote.
Indiana FHA payment estimate
Seeded from Indiana’s median value at the program minimum; every field is editable and the result updates as you type.
Editable benchmark: 7.03% as of September 24, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $220,000 price near Indiana’s median owner-occupied home value (kept where an FHA loan is realistic in most counties), the FHA minimum investment as the down payment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Indiana (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; county loan limits are not checked here. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government.
Same buyer, three very different closings.
An Indiana buyer choosing between FHA, conventional, and VA is choosing an insurance structure as much as a down payment. Here is how each one works and where it fits.
FHA, conventional with mortgage insurance, or VA.
FHA fits the Indiana buyer whose profile a conventional file would turn away or price heavily: the leverage is high, the score threshold is low, and the premiums do not rise with a weaker score. The cost is insurance that stays for the term at full leverage.
Conventional financing asks for a higher score and prices it, in exchange for insurance that can be cancelled and no upfront premium. The comparison is worth running for any Indiana buyer whose score sits above the agency norms. See Lendmire’s conventional loan program.
An Indiana buyer with VA eligibility rarely needs FHA: the VA loan carries no down payment and no monthly insurance, and the funding fee is the only program cost. FHA is the fallback where entitlement is used up or the property does not fit. See Lendmire’s VA loan program.
Where each one fits: FHA for the small investment and the forgiving score; conventional for the strong score that wants cancellable insurance; VA for the eligible borrower who can skip both the down payment and the insurance.
What to prepare for an Indiana scenario review.
Most of this is standard mortgage documentation; have these ready for an Indiana review all the same.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the credit profile, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
Before relying on a number, check the items that change it most in Indiana: the decision score, the mortgage insurance structure, the appraisal, the property approval, the county limit, and the ratios.
Use these checks to keep the Indiana file clean and fundable.
A clean Indiana file answers three questions in advance: what decision score, what premium schedule, and whether the property is inside HUD’s rules and the county limit.
- Confirm the score: the threshold in the snapshot opens maximum financing and the ratio ladder.
- Know the premium: at full leverage the annual premium runs for the term of a thirty-year loan.
- Match the occupancy: second homes and rentals are outside the program.
The decision score decides the leverage
The score the program uses is the lender’s, not an app’s. An Indiana file lands on maximum financing at the threshold shown in the snapshot, and the threshold is also where the compensating-factor ladder opens; below it the ratios are held to the base table.
How long the annual premium runs
Unlike private mortgage insurance, the FHA annual premium does not cancel as the home gains value. On an Indiana full-leverage loan the exit is a refinance; the calculator shows the premium’s rate and duration for the leverage entered.
Occupancy and the non-occupying co-borrower
Second homes and rentals are outside the program. An Indiana buyer who will not live in the home cannot use FHA for it; a family member who will not live there can still co-sign, with full leverage preserved on a one-unit purchase.
Seller contributions and the minimum investment
Sellers and other interested parties may pay closing costs, prepaids, and discount points up to HUD’s limit as a share of the price; above it, the excess reduces the price for loan-sizing. The minimum investment itself cannot come from the seller, but it can come from an acceptable gift.
Condominium project approval
An Indiana condominium is eligible when the project holds HUD approval or the unit qualifies for single-unit approval; a project that holds neither cannot close as an FHA loan. The question is answered early, before the appraisal, and the association’s dues enter the ratios.
From an Indiana pre-approval to keys in hand.
From the first conversation to keys in hand, an Indiana FHA purchase follows four steps. Here is what happens at each one.
Pre-approval
Start with the decision score, the income, and the down payment. A Lendmire loan officer confirms the leverage, the ratios, and the county limit, runs the FHA structure against conventional and VA on the same numbers, and provides the terms in writing.
Contract and appraisal
With the contract signed, the lender orders an appraisal from an FHA Roster appraiser, who values the Indiana home and checks it against HUD’s property standards. Seller contributions are checked against the program’s limit, and any condominium project approval is confirmed.
Underwriting
The file is scored by HUD’s automated system or underwritten manually, with income, assets, credit, and any compensating factors documented. Seasoning after a credit event is confirmed from the discharge or transfer papers, and the ratios are measured on effective income.
Closing
At closing the upfront premium is added to the loan, the escrows for taxes and insurance are set up, and the annual premium begins with the first payment. An Indiana buyer signs the note and the security instrument, occupies the home within HUD’s window, and the loan is insured.
A brokerage that matches the program to the buyer.
The value of a brokerage on an FHA loan is comparison and candor: FHA against conventional on the same numbers, the premium’s duration stated plainly, the county limit confirmed before the offer, and the terms in writing.
Three programs, one set of numbers
FHA, conventional, and VA are run on the same Indiana price, score, and income before a recommendation is made. The buyer sees the payment, the insurance, and the cash to close on each, and the choice is made on the figures rather than on habit.
The premium explained before the offer
The FHA annual premium’s duration is decided at origination, and a buyer should know it before signing a contract. Lendmire states it plainly for the Indiana leverage chosen and explains the refinance path that usually ends it.
Licensed, consumer-purpose, in writing
The parameters on this page are HUD’s and the wholesale overlays’; the terms for a specific Indiana loan come from a licensed loan officer, in writing, after the review. Lendmire is a broker, never the lender, and not affiliated with the federal government.
Trusted by first-time buyers & families alike.
Indiana FHA loan FAQs
The questions below come up on nearly every Indiana FHA conversation. The answers are general; the figures in the snapshot above are the program’s current parameters.
What is an FHA loan, and who is it for?
A government-insured mortgage for a principal residence. The insurance is what allows the small investment and the forgiving score; the borrower pays for it through an upfront premium and an annual premium. It fits the Indiana buyer with a modest down payment or a credit profile that is still being built.
How much do I need to put down on an FHA loan in Indiana?
The snapshot shows the minimum investment, and the calculator applies it to your Indiana price. It does not have to be your own money; an acceptable gift covers all of it, and closing costs can be shifted to the seller within HUD’s limit.
What credit score do I need for an FHA loan?
The threshold in the snapshot, read as the lowest middle score among the borrowers. Below it HUD allows a reduced-leverage loan, but the programs Lendmire places FHA loans with begin at the threshold. A thin or non-traditional credit file can qualify under manual underwriting.
How does FHA mortgage insurance work, and how long do I pay it?
Two parts, both in the snapshot: the upfront premium on the base loan and the annual premium on most thirty-year loans. The duration is the detail to know before the contract: eleven years at or below ninety percent leverage, the loan term above it.
What is the FHA loan limit in Indiana?
There is a county limit, and it is the first thing confirmed on an Indiana file near the top of the market. The loan officer provides the current figure; above it the options are a larger investment or a conventional loan.
Is an FHA loan assumable?
FHA loans are assumable with lender approval of the new borrower. The feature costs nothing at origination and can matter years later when the home is sold.
Can the seller pay my closing costs on an FHA loan?
Sellers and other interested parties may contribute toward closing costs and prepaids up to the limit in the snapshot. An Indiana contract structured that way leaves the buyer bringing little beyond the investment.
Can I take cash out with an FHA refinance?
Yes, up to the cash-out leverage in the snapshot, on an owner-occupied principal residence you have owned and occupied for the past twelve months. The new loan carries the upfront and annual premiums, and a home equity line that leaves the first mortgage alone is the comparison worth running.
Can I get an FHA loan after a bankruptcy or foreclosure?
Yes, once the event is seasoned under HUD’s rules: a bankruptcy counts from discharge, a foreclosure or deed-in-lieu from the transfer of title, a short sale from its closing, each with its own waiting period and exceptions for documented extenuating circumstances. Clean recent housing history matters as much as the seasoning.
What happens after my Indiana offer is accepted?
Four things in order: the appraisal and property check, the project approval where it applies, the underwriting with any compensating factors documented, and the closing with the premiums applied. A loan officer sets the schedule for your file.
An Indiana FHA loan sized to the price, the score, and the ratios.
Start with a scenario review: the price, the down payment, the decision score, and the income. A licensed Lendmire loan officer runs FHA against conventional and VA on the same numbers and provides the terms in writing.
This guide covers Indiana — for the program overview, see Lendmire’s FHA loan program.
All Indiana city guides (6): Carmel · Evansville · Fishers · Fort Wayne · Indianapolis · South Bend
Related programs: Down Payment Assistance · FHA 203(k) Rehab Loans · Conventional Loans