Legal Question in Consumer Law in Indiana

No, not based on the facts you have shown so far. There is no law requiring deposits be returned. The agreement of the parties about who gets the deposit if the sale does not go through controls your case.

If you had an agreement that the deposit would be refunded if financing fell through, you can enforce that part of the agreement.

Alternatively, if you paid him the deposit in order to induce him to hold the boat for you for a specific period of time, then as long as he kept the boat available for you for the agreed upon period, he is entitled to the deposit.

If you really had no agreement about what would happen in the event you couldn't pay for the rest of the boat, then there are other possible factors that come into play. Can he easily sell the boat to someone else? Did he hold the boat for you for a long time? Does he have to store the boat now that you failed to purchase it?

If you sued him in small claims court, a judge would want to know whether it was fair for you to get some or all of your money back when he held the boat for you. The cost to him of holding the boat for you, and any losses he suffers from having to sell it to someone else, will be critical factors.