Indiana · State guide
How to buy a house in Indiana
One of the most affordable and buyer-friendly states in the country: low home prices, no transfer tax, and a property tax bill capped at 1% by the state constitution. Here is the playbook for buying in the Hoosier State.
Last updated June 2026
Why Indiana is different
Buying a house in Indiana, the short version
The federal process is the same everywhere — read the complete guide to buying a house for the eight universal steps — but Indiana has its own programs, taxes, and closing rules worth knowing before you start.
The picture: Indiana is one of the most affordable states to buy in (a statewide median around $245,000; Indianapolis sits near the median, college towns run higher, and smaller cities are cheaper still). It’s famous for low property taxes, protected by a constitutional cap that limits a homeowner’s bill to 1% of the home’s value — and there’s a new round of tax relief phasing in for 2026. There’s also no real estate transfer tax, and closings run through a title company, so no attorney is required.
Two things to plan for. Indiana has a detailed seller disclosure form, and two issues are common across the state worth inspecting closely: radon (elevated statewide) and basement water intrusion. The state housing agency (IHCDA) also offers strong down payment help. Use the 50-state hub to compare other states.
The market
What homes cost in Indiana
Among the most affordable in the country, with tight inventory keeping well-priced homes moving.
The statewide median sale price is around $245,000 as of early 2026, and in Indianapolis homes sell in roughly 20–35 days. Inventory is limited, so well-priced homes still draw interest — and Indianapolis in particular is a strong market for investors thanks to its affordability. Prices vary widely by city:
Median prices by metro
Terre Haute is among the cheapest, often near $120,000 · Fort Wayne and South Bend are moderate · Indianapolis ~$248,000 (near the statewide median) · Bloomington ~$299,000 · the Carmel/Fishers suburbs (Hamilton County) run higher. Across the state, the story is affordability — even the priciest pockets stay well below the national median.
Down payment & rate help
IHCDA homebuyer programs
You don’t apply directly — you work through an IHCDA-approved lender. A minimum 640 credit score and a homebuyer course are typically required.
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First Place
IHCDA’s flagship for first-time buyers: a 30-year fixed mortgage plus up to 6% of the price in down payment and closing-cost help.
The assistance is a forgivable second mortgage — no monthly payment, and forgiven in full if you stay in the home for nine years without selling or refinancing.
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Next Home
Open to first-time and repeat buyers: up to 3.5% of the price as a forgivable second mortgage, forgiven after just two to three years. It can also be combined with the MCC tax credit.
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Helping to Own (H2O) & the MCC
H2O is a true grant of 3.5% toward an FHA down payment (no repayment after nine years; first-time buyers). The Mortgage Credit Certificate gives a federal tax credit worth 25% of your annual mortgage interest (up to $2,000) for the life of the loan.
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FHLBank & city help
The FHLBank Indianapolis runs annual rounds: Launch (up to $20,000 for first-time buyers at/below 80% AMI) and HomeBoost (up to $25,000 for first-generation buyers). Cities like Indianapolis, Fort Wayne, and Evansville add their own programs. Plus USDA (0% down, rural) and VA (0% down).
The IHCDA rules in brief
You’ll generally need a 640+ credit score (660 for some loans), completion of a HUD-approved homebuyer course, and an IHCDA-approved lender. There are income and purchase-price limits by county, and most programs ask for a small minimum contribution (around $500). “First-time buyer” means no ownership in the last three years — though Next Home welcomes repeat buyers. The FHLBank rounds open on set dates and funding runs out fast, so line up a lender early.
★ Free expert help
Buying in Indiana? Get matched with a local expert.
From IHCDA’s First Place program to making sure a home’s radon and basement check out, an Indiana pro can walk you through it — and answer the questions this page can’t. Free, with no obligation.
Property taxes
Property taxes in Indiana: capped at 1%
This is Indiana’s headline advantage. Property taxes are low (an effective rate around 0.75%, with a typical bill near $1,500), and they’re protected by a cap written into the state constitution: the “1-2-3 rule” limits a tax bill to 1% of a home’s gross assessed value for an owner-occupied homestead (2% for other residential and farmland, 3% for business). So a $250,000 home is capped at about $2,500 a year, no matter what local rates do. On top of the cap, you claim the Standard Homestead Deduction ($48,000 off your value) and the Supplemental Deduction (40% of the rest, rising toward two-thirds by 2031), plus a new automatic 10% credit (up to $300) for 2026.
File the homestead deduction — and watch for new 2026 relief
You must file the homestead deduction once with the county auditor for your primary residence — it’s what unlocks both the deductions and the 1% cap, and it stays in place until you move. A 2025 reform (Senate Enrolled Act 1) is phasing in bigger relief through 2031, lowering taxes for about two-thirds of homeowners. Seniors 65+ get an additional deduction and a 2% annual-increase cap. If your assessment (Form 11) looks too high, you have 45 days to appeal. Taxes are paid in arrears, so they’re prorated at closing.
Closing & costs
Closing on a home in Indiana
Indiana keeps closing simple and cheap. A title company handles the closing — an attorney is optional (roughly $500–$1,500 if you want one for a complex deal) — and there’s no real estate transfer tax, so closing costs are among the lowest in the country. (A Sales Disclosure Form is filed with every deed for assessment purposes; helpfully, the buyer can use it to claim the homestead deduction right at closing.) On financing, the 2026 conforming limit is $832,750 and the FHA floor is $541,287 in every Indiana county — confirm with HUD. A purchase usually closes in about 30–45 days.
The disclosure — plus radon and the basement
Indiana requires sellers to complete a detailed Residential Real Estate Sales Disclosure form (Indiana Code §32-21-5) covering the structure, systems, appliances, water and sewer, flooding, and any known defects — delivered to you before you sign. If the seller fails to provide it, you can back out before closing.
Two Indiana-specific things to check closely: radon (much of the state has elevated levels above the EPA action level — get a radon test) and basement water intrusion (common in Indiana’s clay soil — look for sump pumps and waterproofing history). Always get a full home inspection, and note the federal lead-paint rule for homes built before 1978.
Insurance & risks
Insuring an Indiana home
Home insurance in Indiana is among the most affordable in the country — roughly $1,800–$2,400 a year. The dominant risk is severe weather: thunderstorms, hail, straight-line winds, and tornadoes, with central and northern Indiana sitting in the tornado belt. There’s no coastal or hurricane exposure, which helps keep premiums down.
Storms — and a couple of regional risks
Wind and hail are the main perils, so check whether your policy carries a separate wind/hail deductible, and know that a newer roof earns better rates. Flood isn’t covered by a standard policy — you’ll need separate NFIP flood insurance near rivers and floodplains. Far southwestern Indiana (around Evansville) sits near the New Madrid seismic zone, where earthquake coverage is a separate endorsement worth considering. And given Indiana’s basements and clay soil, make sure your policy includes sump-pump failure / water-backup coverage.
Wherever you buy
The steps that work the same in Indiana
Indiana sets the local rules, but these parts of buying are the same everywhere.
Quick answers
Buying a house in Indiana: common questions
How much money do you need to buy a house in Indiana?
With a conventional loan you need 3% down, FHA 3.5%, and VA or USDA can be 0%. On a typical ~$245,000 home that’s roughly $7,400–$8,600 down plus closing costs — which are low here since there’s no transfer tax. IHCDA can cover 3.5%–6% of the price. See how much you really need →
Does Indiana have down payment assistance?
Yes. IHCDA offers First Place (up to 6% for first-time buyers), Next Home (3.5%, open to repeat buyers), and the H2O grant, plus the FHLBank Indianapolis Launch program (up to $20,000). See assistance programs →
Are property taxes low in Indiana?
Yes — among the lowest in the country. The state constitution caps a homestead’s tax bill at 1% of its assessed value, and generous deductions plus new 2026 relief lower it further. Just be sure to file the homestead deduction.
Does Indiana have a transfer tax?
No. Indiana charges no real estate transfer tax, so closing costs here are among the lowest of any state — just a small sales-disclosure fee and recording costs.
What credit score do you need in Indiana?
IHCDA programs generally want a 640 (sometimes 660). For loans broadly, FHA can go to 580 and conventional around 620. A higher score mainly earns a lower rate. Check the score by loan type →
Do I need an attorney to buy a house in Indiana?
No. A title company handles the closing in Indiana. You can hire an attorney for a complex transaction, but it isn’t required.
Do home sellers have to disclose problems in Indiana?
Yes. Indiana requires a detailed Sales Disclosure form before you sign. Two things worth inspecting closely here are radon (common statewide) and basement water intrusion — always get your own inspection. How inspections fit the process →
Do I need special insurance for tornadoes in Indiana?
Tornado and hail damage are covered by standard policies, but check the wind/hail deductible. Flooding needs separate NFIP coverage, and far southwestern Indiana may want earthquake coverage near the New Madrid zone.
What’s the conforming loan limit in Indiana?
$832,750 in every county for 2026, with the FHA floor at $541,287 statewide. Loans above the limit are jumbo mortgages.
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Buying in a different state?
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