The Indiana down payment assistance guide
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
Everything on this site in one place, in the order a buyer actually meets it. Every figure carries the IHCDA document it came from and the date we read it.
Start with the thing most pages get wrong
Indiana's down payment assistance is not a grant. Every IHCDA assistance product is a non-forgivable second mortgage, and IHCDA's own guide says "there is no proration associated with the IHCDA DPA loan." It never shrinks and it is never forgiven. What that costs you and what triggers it.
That is not a reason to avoid it. It is a reason to plan for it, because a buyer who mistakes it for assistance that never comes back discovers otherwise at the closing table years later.
What is on offer
| Program | Assistance | First-time? | Recapture? | Price cap? |
|---|---|---|---|---|
| First Step | 5% of purchase price | Yes* | Yes | Yes |
| Next Home | 2.50% or 3.50% | No | No | Conventional: none |
| Step Down | None, rate only | Yes* | Yes | Yes |
| Next Step | Matches existing lien | Refinance | — | — |
* Waived in a targeted census tract or with verifiable military status. Each in detail · Choosing between the two that pay.
Will you qualify?
Three gates, which IHCDA checks in this order.
First-time status. No ownership interest in a principal residence in the last three years, judged only on the people signing and occupying. Waived in a targeted area or with verifiable military status, and irrelevant on Next Home. Whether your address is targeted.
Income. Applicants only — not the household. In a non-targeted county, $95,300 for one to two people and $109,595 for three or more; on the conventional table, typically $133,420. All 92 counties · How income is counted.
Acquisition cost. $566,355 base, $692,211 targeted, or no limit at all on the conventional table. And acquisition cost includes the cost of completing an unfinished home. What counts.
Then credit: 660 up to 45% DTI, 680 from 45–50%. Why it is not 640.
And the property
Principal residence only, on one parcel of one acre, of an eligible type: single-family detached, townhome, PUD, approved condominium, or a HUD-plated double-wide manufactured home. The one-acre rule · Manufactured housing.
What happens later
Two separate obligations, often confused with each other.
The assistance itself is repaid in full when the first mortgage terminates, you sell, you refinance outside an IHCDA programme, you take a HELOC, or the home stops being your principal residence.
Federal recapture tax is a different thing, owed to the IRS, and only on the bond-funded First Step and Step Down. It requires all three of: leaving within nine years, selling at a profit, and income above the adjusted limit. Exposure peaks at years four to five. The full mechanics.
Is IHCDA the only option?
No. The Fort Wayne Housing Authority runs Hoosier Homes, offering up to 5% at a 640 minimum score across 25 named counties. For a buyer whose score sits between 640 and 660 in one of those counties, it is the more realistic route. Hoosier Homes.
Where you are buying also shapes the answer. Indianapolis · Fort Wayne · Northwest Indiana.
Why every figure here carries a date
Because housing agency figures move and stale ones outlive them online. The limits on this site are effective 5/25/2026; the programme terms come from IHCDA's guide dated 02/2026; the credit and underwriting overlays come from the STEPS Lender Matrix dated 6/3/2025.
Where two IHCDA documents disagree we take the newer one and say which. That is how First Place ended up with a date attached rather than a paragraph describing its terms. How we source this.
Frequently asked questions
How does down payment assistance work in Indiana?
IHCDA attaches a second mortgage to a 30-year fixed first mortgage. First Step provides 5% of the purchase price and Next Home provides 2.50% or 3.50%. Every assistance product is non-forgivable and is repaid in full when the first mortgage terminates, the property is sold or refinanced, a HELOC is taken, or the home stops being the primary residence.How much down payment assistance can I get in Indiana?
First Step provides 5% of the purchase price and Next Home provides 2.50% or 3.50% based on the purchase price, not exceeding the appraised value. Fort Wayne Housing Authority's separate Hoosier Homes program provides up to 5% across 25 counties.What income do I need to qualify for Indiana down payment assistance?
Income must be at or under the county limit. In a non-targeted county, effective 5/25/2026, that is $95,300 for a one to two person household and $109,595 for three or more on the FHA table, and typically $133,420 on the conventional table. Only applicants on the loan application are counted, not the whole household.Is Indiana down payment assistance forgiven over time?
No. IHCDA's program guide states there is no proration associated with the IHCDA DPA loan, and the STEPS Lender Matrix lists the forgiveness period as non-forgivable on every product. The full amount is repaid regardless of how long the borrower has owned the home.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.