IHCDA counts the people who sign, not the people who live there
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
This is the Indiana rule that quietly rescues files which would fail in most other states, and it is almost never mentioned on a down payment assistance page.
What exactly does IHCDA count?
Income belonging to someone who passes two tests at once. From IHCDA's Homeownership Program Guide, 02/2026, qualifying income is the total income of the mortgagor who is expected to "a) live in the Qualified Dwelling; and b) be liable, or secondary liable, on the Note."
The STEPS Lender Matrix compresses that to a single line in its requirements block: IHCDA uses "1003 applicant qualifying income, not household income."
So the question is not who lives in the house. It is who signs.
Why does that matter so much?
Because the usual rule is the opposite one. A household-income programme adds up everyone living under the roof, which means people who are not buying the house and have no claim to it can still disqualify the buyer.
Three ordinary situations that fail elsewhere and pass in Indiana:
- A buyer whose adult child lives at home and works. In a household-income state that salary lands on the application. In Indiana it does not.
- A buyer whose parent has moved in. Pension and Social Security are household income in most programmes. Not here.
- Two friends buying together where only one is on the loan. Only the signer's income counts.
Mike's view: this single rule is worth more to a typical Indiana buyer than the difference between a 3.50% and a 5% assistance programme, and almost nobody knows it exists.
What about co-signers?
Allowed, and better than allowed. The program guide says non-occupying co-signers of the mortgagor are permitted, that "IHCDA does not include the co-signer's income in the total household income," and that the participating lender "should exclude the co-signer's information from the application package that is being submitted to IHCDA."
That is unusual and genuinely useful. A parent can strengthen the file for credit and debt-ratio purposes with the agency and the servicer, without their income counting toward the IHCDA limit that decides eligibility. The STEPS matrix confirms non-occupant co-borrowers and co-signers are allowed, with restrictions.
One limit worth knowing before you plan around it: only 1003 applicants may take title at closing. Someone who is not on the application cannot be added to the deed.
So household size does not matter at all?
It matters for the column, not the total. The limit tables have a one-to-two person column and a three-or-more column, and that count comes from the mortgagors plus the dependents listed on the loan application.
So a bigger family uses the higher column. What does not happen is a non-borrowing adult's paycheque being added to the income you are measured on. Both columns for your county.
What income does get counted?
Everything a signer actually earns or receives, recalculated at closing if it changed. The guide names self-employment income, W-2 wages and SSI or SSDI as examples, and is explicit that it is not an exhaustive list.
If income or employment changes between reservation and closing, the lender must recalculate to confirm the file is still inside the limit. A signer who earns nothing completes a Zero Income Affidavit. Federal tax transcripts are not routinely required — only where IHCDA needs them for an underwriting determination.
Frequently asked questions
Does IHCDA count household income or applicant income?
Applicant income. The STEPS Lender Matrix states that IHCDA uses 1003 applicant qualifying income, not household income. The program guide defines qualifying income as that of the mortgagor and co-mortgagors who will both live in the dwelling and be liable on the note.Does a roommate's income count against Indiana down payment assistance?
No, provided they are not on the loan. IHCDA counts only applicants listed on the 1003 who will live in the home and are liable on the note, so someone who lives in the property without signing is not included in qualifying income.Are co-signers allowed on IHCDA loans?
Yes. Non-occupying co-signers are permitted and IHCDA does not include their income in the calculation; the guide instructs lenders to exclude co-signer information from the package submitted to IHCDA. Note that only 1003 applicants may take title at closing.How is household size determined for IHCDA income limits?
By the number of mortgagors plus the dependents listed on the Uniform Residential Loan Application. Household size selects which column of the limit table applies, the one to two person column or the three or more column, but does not add non-borrower income to the calculation.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal or tax advice. IHCDA program terms, income limits and acquisition limits are set by the Indiana Housing and Community Development Authority and change; figures here carry the date we verified them against IHCDA's published documents. IHCDA down payment assistance is a non-forgivable second mortgage repayable in full, not a grant. Federal recapture tax may apply on bond-funded loans; consult a tax advisor. Loans are subject to borrower and property qualification.