FHA loans down across Marion County

The number of federal loans are down as the gap in homeownership widens. 

A new report from the Fair Housing Center of Central Indiana provides a closer look at the use of federal loans meant for lower income and first time homebuyers in Marion County.

The analysis builds on data that explores mortgages and finds a significant reduction in Federal Housing Agency, or FHA, loans. 

FHCCI Executive Director Amy Nelson said a competitive, tight housing market and out-of-state investors are adding to the problem.

“What we’re hearing from real estate agents is that the FHA offers are just being swept off the table,” Nelson said.

The report also examines VA loans and finds the number slightly increased but it’s still a small number of federal loans overall.

Indianapolis has a large homeownership gap between white and Black households. In Marion County, homeownership rates are 65 percent for whites, while only 34 percent for Blacks, 39 percent for Hispanics, and 46 percent for Asians.  Nelson says the inability of families to use FHA disproportionately impacts Black and Hispanic families. 

Nelson said the reports can be used by consumers in their decision making process.

“In the report we give lender by lender data so they can look up their lender or who they bank with or who they are thinking of banking with and evaluate and use that information to determine how they want to proceed,” Nelson said.

From 2018 to 2021, conventional lending accounted for more than 78 percent of mortgage originations in Marion County as compared to 63 percent from 2008 to 2011.

Contact WFYI city government and policy reporter Jill Sheridan at jsheridan@wfyi.org. Follow on Twitter: @JillASheridan.