FHA Loans
FHA Loans in Indiana
If you’ve been told you don’t qualify for a conventional mortgage, an FHA loan might be exactly what opens the door. Backed by the Federal Housing Administration, FHA loans are designed for buyers who are building credit, starting fresh, or simply don’t have a large down payment saved up. Tevis Durbin has spent 26 years helping Indiana buyers in Indianapolis, Fishers, Hamilton County, and across the state turn a “no” from somewhere else into a “you’re approved” here. FHA is one of the most powerful tools in that conversation.
Who it fits
- First-time buyers who haven’t had time to build a large savings cushion
- Buyers with credit scores in the 580 to 620 range who don’t meet conventional thresholds
- Borrowers rebuilding after a financial setback, such as a divorce, medical bills, or a period of unemployment
- Move-up buyers in the Indianapolis metro who want a low-down-payment path and can meet the primary residence requirement
- Anyone who received a conventional denial and wants a second opinion from an experienced local lender
How it works
FHA loans are issued by approved private lenders (like Supreme Lending) and insured by the federal government. That government backing is what allows lenders to offer more flexible credit and income guidelines than a conventional loan typically permits. Because the FHA assumes a portion of the risk, you can qualify with a lower credit score or a higher debt-to-income ratio, which is the percentage of your gross monthly income that goes toward monthly debt payments.
In exchange for that flexibility, FHA loans carry mortgage insurance on every loan, regardless of how much equity you have. You’ll pay an upfront mortgage insurance premium (UFMIP) at closing, which is typically rolled into the loan balance, and a monthly mortgage insurance premium (MIP) added to your payment for the life of the loan in most cases. That cost is worth understanding clearly before you decide, and it’s one of the first things Tevis will walk you through so there are no surprises.
One underappreciated feature: FHA loans are assumable. If you sell your home in a higher-rate environment, a buyer can take over your existing loan at your original rate, which can make your property genuinely more attractive on the market. Not many loan types offer that.
What you need to qualify
- Credit score of 580 or higher: you may be eligible for the standard 3.5% minimum down payment
- Credit score of 500 to 579: you may still qualify, but the minimum down payment rises to 10%
- Down payment funds: as low as 3.5% of the purchase price, and gift funds from family are permitted
- Debt-to-income ratio: FHA guidelines often allow a DTI up to 43%, and with strong compensating factors (steady employment, cash reserves, minimal payment shock), some borrowers qualify with a DTI closer to 50%
- Primary residence only: FHA financing is for the home you plan to live in, not investment properties or vacation homes
- FHA-approved appraisal: the property must meet FHA minimum property standards, which are in place to protect you as much as the lender
- Steady income and employment history: two years of employment history is the general benchmark, though the full picture matters and Tevis reviews each situation individually
Every borrower’s file tells a different story, and the guidelines above are starting points, not ceilings. If you’re not sure whether your credit score, income situation, or down payment puts FHA in reach, the best move is a direct conversation. The Durbin Team works with Indiana buyers at every stage of the process, from the first “am I even close?” call all the way through closing. Reach out to Tevis today and find out exactly where you stand.
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