Here's a step-by-step guide for first-time homebuyers in Madison

If you are eligible for an FHA

1. Know if you qualify (and why that matters)

Many programs for first-time homebuyers, which typically means people who have not owned a home in the last three years, and/or to purchase in a targeted area. Indiana’s statewide programs (administered by IHCDA) offer down-payment assistance (DPA) and special loan options for qualifying buyers — these can materially reduce how much cash you need at closing. Check income and purchase-price limits early so you target properties and lenders appropriately. 

2. Get housing counseling (free or low-cost, and highly recommended)

Before applying for assistance or a mortgage, talk with a HUD-approved housing counselor. They’ll help you review credit, set a budget, decide which programs to pursue, and even walk through the paperwork. Use the HUD/CFPB counselor locator to find an agency that serves Jefferson County or nearby counties. A counselor can also point you to local classes and lender partners that work with state programs. 

3. Explore Indiana-specific assistance programs

State programs you’ll want to investigate include IHCDA’s First Step, Next Home, and other down-payment assistance offerings. These programs often require you to work with participating lenders, complete buyer education, and submit a reservation for down-payment assistance. Start by reading program guides and contacting a participating lender to learn current reservation fees, assistance amounts, and documentation requirements. 

4. Look into local resources in Madison and Jefferson County

Madison’s city and redevelopment offices have been active on housing initiatives and new construction projects aimed at increasing supply. Local nonprofits — notably Habitat for Humanity of Southeast Indiana (Madison) — also offer homeownership opportunities for households meeting income guidelines (these often require “sweat equity” and counseling). Local contacts can point you to properties, deferred-rehab options, or city-led incentives. Reach out to the City of Madison or Habitat Madison to learn what’s currently available. 

5. Obtain mortgage pre-approval from a participating lender

A pre-approval letter tells sellers you’re serious and helps match you to the right program (IHCDA programs usually require a participating lender). Compare rates, program compatibility (FHA vs. conventional), and what each lender needs for down-payment assistance paperwork. If you plan to use state DPA, confirm the lender will reserve that assistance on your behalf.

6. Complete required education and paperwork

Most assistance programs mandate a homebuyer education course and documentation (IDs, pay stubs, tax returns, bank statements). Housing counselors or participating lenders can confirm which course is accepted and where to register. Complete the course early — some DPAs require completion before funds can be reserved or released.

7. House hunt with program limits in mind

Keep income and purchase-price limits in your pocket while searching. In Madison, many homes are older and historic — great for charm, but make sure you budget for inspections, potential lead-based paint issues in older houses, and any needed repairs. Your housing counselor or lender can help estimate repair costs so you don’t exceed program purchase-price limits.

8. Apply for the mortgage and reserve down-payment assistance (DPA)

When you find a home, your lender will pull together the mortgage application and — if you’re using IHCDA or similar DPA — request a reservation for assistance. That reservation secures funds while appraisal and underwriting proceed. Expect underwriter requests for documentation and stay in close contact with your lender and counselor so nothing stalls.

9. Inspections, appraisal, and closing

Schedule a thorough home inspection (and additional inspections if advised). The lender will order appraisal to confirm value for underwriting. Once underwriting clears and funds are reserved, you’ll sign final documents at closing. Bring required ID and any remaining funds for closing costs. Your counselor or lender will provide a final closing disclosure showing cash-to-close.

10. After closing — keep records & use homeowner resources

Save closing documents, your insurance policy, and any rehab/maintenance receipts. Your housing counselor can also help with budgeting for homeownership and point you to local programs (energy efficiency, tax credits, or rehab assistance) that reduce long-term costs.

Quick contact starters:

• Indiana Housing & Community Development Authority (IHCDA) — review First Step/Next Home program guides and find participating lenders. 

• HUD/CFPB housing counselor locator — find HUD-approved agencies for pre-purchase counseling. The nearest one to Madison is Hoosier Uplands.

• Habitat for Humanity of Southeast Indiana (Madison) — local homeownership opportunities and partner-family programs. 

• City of Madison Redevelopment / housing Initiatives — local planning and housing projects that may affect inventory and incentives. 

Buying your first home in Madison is absolutely doable with the right sequence: counseling → pre-approval → education → house hunt → apply for DPA → close. Start with a HUD-approved counselor and an IHCDA-participating lender, and you’ll be on the shortest path from “looking” to “keys in hand.

And if you need any help at all, please don't hesitate to contact me at john@demaree4me.com or call (812) 701-4321. We are here to get you settled in!