Home financing in Washington County.

Home financing means borrowing money to buy, build, or improve a home — and agreeing to pay it back over time, usually with interest. The most common tool is a mortgage: a loan secured by the property itself.

If you stop making payments, the lender can foreclose on the home.

That sounds scary, but a well-matched loan from a trustworthy lender is a manageable, normal part of homeownership for millions of people.

There are several types of home loans you may come across in Washington County:

• **Conventional loans** — offered by banks and credit unions, typically requiring a credit score of 620 or higher and a down payment of 3–20%.

• **FHA loans** — backed by the Federal Housing Administration; useful for buyers with lower credit scores (as low as 580) or smaller down payments (3.5%).

• **USDA Rural Development loans** — Washington County is largely rural, and many addresses here qualify for USDA loans, which can require zero down payment.

• **VA loans** — for eligible veterans and active-duty military, also with no down payment required.

• **ITIN loans** — for borrowers who do not have a Social Security Number but do have an Individual Taxpayer Identification Number; these are offered by select community lenders.

The right loan type depends on your income, credit history, immigration status, and the specific property. A local lender or housing counselor can walk you through which fits your situation — there is no obligation to apply until you are ready.

Washington County is a small, rural county in southern Indiana, with Salem as its county seat.

The local economy is anchored by manufacturing, agriculture, healthcare, and construction trades.

Many residents work as solo contractors, farm operators, or hourly workers in these industries — income patterns that do not always fit neatly into a standard lender's checklist.

Here is what typically matters most for qualifying:

• **Income stability** — Lenders want to see two years of consistent income. If you are self-employed or do seasonal work, you'll need two years of tax returns and possibly a year-to-date profit-and-loss statement. Bank statements can sometimes supplement this.

• **Credit score** — A score of 580 or above opens the door to FHA loans. A score of 620+ gives you access to conventional products. If your score is lower, local CDFIs and credit unions sometimes work with you to build it before you apply.

• **Debt-to-income ratio (DTI)** — Most lenders prefer that your total monthly debt payments (including the new mortgage) stay below 43% of your gross monthly income.

• **Down payment** — Ranges from 0% (USDA, VA) to 3–3.5% (FHA, conventional) to 20% (conventional without mortgage insurance). Indiana has down-payment assistance programs that can help (see Section 5).

• **ITIN borrowers** — You do not need a Social Security Number to buy a home. ITIN mortgages are real loans offered by community banks and credit unions to borrowers with a valid ITIN and documented income. Two to three years of tax returns filed with your ITIN are typically required.

If you are unsure whether you qualify, the best first step is a free conversation with a HUD-approved housing counselor — not a loan application.

Gathering your paperwork early saves time and reduces stress. Here is a practical checklist for most home loan applications in Washington County:

**For all borrowers:**

• Government-issued photo ID (driver's license, passport, or consular ID)

• Social Security Number or Individual Taxpayer Identification Number (ITIN)

• Two years of federal tax returns (all schedules)

• Two most recent W-2s or 1099s

• Two to three months of recent bank statements (all pages, all accounts)

• Recent pay stubs (last 30 days) if you are a salaried or hourly employee

• Proof of any other income (rental income, child support, Social Security, etc.)

• Landlord contact information or 12 months of canceled rent checks if you currently rent

**For self-employed borrowers and contractors:**

• Two years of business tax returns (if you have a business entity)

• A year-to-date profit-and-loss statement, prepared by a CPA if possible

• Business bank statements (two to three months)

• Any business licenses or contractor registrations

**For ITIN borrowers:**

• Your ITIN card or the IRS letter assigning your ITIN

• Two to three years of tax returns filed under your ITIN

• Twelve months of bank statements is often requested in lieu of W-2s

• A valid foreign passport or consular ID

**For the property:**

• Purchase agreement (once you have one)

• Address of the property for USDA eligibility check (if applicable)

Keep copies of everything you send. You will likely be asked for some documents more than once — that is normal.