Everything IHCDA checks, in the order it gets checked
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
IHCDA's own underwriting review is organised around three questions. Everything else is an agency or servicer requirement sitting on top of them.
The three determinations
The programme guide requires the participating lender to perform a Tax Code Compliance Underwriting Review and sign the IHCDA Homeownership Affidavit. It documents three things:
- Is the mortgagor a first-time homebuyer, or exempt — or a non-first-time buyer meeting all the other restrictions?
- Is total qualifying income within the limits for the Indiana county they intend to live in?
- Is the property a Qualified Dwelling whose purchase price is under the acquisition limits for the county it sits in?
Everything below hangs off one of those three.
Are you a first-time homebuyer?
IHCDA defines it as someone who has not, "at any time during the three (3) years preceding the date of the loan closing, had a present ownership interest in his or her principal residence."
Two points people get wrong. It applies only to the people signing the loan documents and intending to occupy, not to everyone in the household. And it is waived entirely for a buyer purchasing in a targeted area or an Eligible Veteran.
Prior ownership of a mobile home may not count against you at all, with conditions — but a double-wide owned within three years does disqualify. The mobile home rule. And Next Home has no first-time requirement at all, which is the simplest answer for a repeat buyer. The comparison.
Is your income inside the limit?
Measured on applicants only — the mortgagor and co-mortgagors who will live in the home and are liable on the note. Non-occupying co-signers are allowed and excluded from the calculation. A signer with no income completes a Zero Income Affidavit.
Base limits in a non-targeted county, effective 5/25/2026: $95,300 for one to two people, $109,595 for three or more. The conventional table runs much higher. Your county's figures · How the calculation works.
If income or employment changes between reservation and closing, the lender must recalculate to confirm the file is still compliant at closing.
Does the property qualify?
| Test | Requirement |
|---|---|
| Occupancy | Principal residence. No investment, rental or recreational property. |
| Land | One parcel, one acre. Over an acre needs zoning or appraiser documentation. |
| Type | Single-family detached, townhome, PUD, approved condominium, or HUD-plated double-wide manufactured housing |
| Acquisition cost | Under the county limit — and acquisition cost is broader than the contract price |
| Value | On bond products, purchase price cannot exceed fair market value |
The one-acre rule and property types · What counts toward acquisition cost.
Credit, ratio and underwriting
- Minimum FICO 660 up to a 45% DTI; 680 between 45% and 50%.
- No manual underwriting on First Step or Step Down. Fannie runs DU, Freddie runs LPA.
- Max LTV 95% conventional; 96.5% FHA with an allowable family member, 75% with a non-family member.
- Verification of current FICO and DTI is done with the Master Servicer, U.S. Bank HFA Division.
Why the published minimum is 660 and not 640.
The rules that catch people late
- Only 1003 applicants may take title at closing. Someone not on the application cannot be added to the deed.
- The buyer must have a valid real estate contract in place before the loan is reserved.
- Reservations are taken Monday to Friday, between rate publication and 5:00 p.m. Eastern.
- The $250 reservation fee is non-refundable, which is why pre-screening matters.
- Locks run 60 days and a borrower cannot re-lock for 60 calendar days. Rate buy-downs are not allowed.
- Final approval must occur by the Commitment Expiration Date, 60 days after reservation.
- Federal tax transcripts are not required unless IHCDA needs them for an underwriting determination.
Frequently asked questions
What are the requirements for Indiana down payment assistance?
IHCDA's tax code compliance review checks three things: whether the buyer is a first-time homebuyer or exempt, whether qualifying income is within the county limit, and whether the acquisition cost is under the county limit. On top of those sit credit standards of 660 up to a 45% DTI and 680 from 45 to 50%, principal residence occupancy, and a one parcel one acre property rule.Who counts as a first-time homebuyer in Indiana?
Someone who has not had a present ownership interest in their principal residence at any time during the three years before loan closing. It applies only to those signing the loan documents and intending to occupy. The requirement is waived for buyers purchasing in a targeted area and for Eligible Veterans.Can someone not on the loan be on the deed?
No. The STEPS Lender Matrix states that only 1003 applicants may take title at closing, so anyone taking title must be an applicant on the loan application.Do I need a purchase contract before reserving an IHCDA loan?
Yes. The program guide states that the potential buyers must have a valid real estate contract in place prior to registration and commitment. The $250 reservation fee is non-refundable, which is why pre-screening before reservation matters.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.