Targeted areas: higher limits, and no first-time buyer requirement
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
Targeted-area status is the single biggest swing in Indiana eligibility, and it is decided by the property's address rather than anything about the buyer.
What does targeted status change?
Two things, and the second is worth more than the first to a lot of buyers.
- Higher limits. In most counties, income moves from $95,300 / $109,595 to $114,360 / $133,420, and acquisition from $566,355 to $692,211.
- ★ The first-time homebuyer requirement is waived. First Step and Step Down are first-time-buyer programmes "unless the subject property is in a HUD designated target census tract, or an applicant has verifiable military status." A repeat buyer purchasing in a targeted area can use First Step and its 5%.
That second point reopens the larger assistance programme to people who assumed they were locked out. Why that matters against Next Home.
What makes an area targeted?
IHCDA describes two routes into the designation.
- A Qualified Census Tract, where "seventy percent (70%) or more of the families have an income which is eighty percent (80%) or less of the statewide median family income." Targeted areas also include census tracts inside counties which are not themselves targeted.
- An Area of Chronic Economic Distress, designated by the State and approved by the Secretaries of the U.S. Treasury and HUD.
Neither has anything to do with the buyer. It is a statement about the neighbourhood.
Which Indiana counties are targeted?
Thirty counties are designated targeted in their entirety, so every property in them qualifies:
Brown, Clinton, Crawford, Daviess, Dearborn, Decatur, Fayette, Franklin, Fulton, Greene, Jackson, Jasper, Jefferson, Knox, Lawrence, Miami, Ohio, Orange, Owen, Parke, Perry, Pike, Rush, Scott, Shelby, Spencer, Vermillion, Vigo, Washington, Wayne.
Seventeen counties contain targeted census tracts without being targeted throughout. In these, the specific address decides:
Allen, Clark, Delaware, Elkhart, Floyd, Grant, Hancock, Henry, Howard, Lake, Madison, Marion, Marshall, Monroe, St.Joseph, Tippecanoe, Vanderburgh.
That second list carries most of Indiana's population — Marion, Lake, Allen, St. Joseph, Vanderburgh, Monroe and Tippecanoe are all on it. So for a majority of Indiana buyers the question is live rather than settled, and worth checking rather than assuming.
The remaining 45 counties have no targeted tract and use the base limits throughout.
How do I check my address?
IHCDA publishes the list of qualifying census tracts and links a verification tool from its limits sheets and its targeted areas page. Your lender checks it at reservation as part of the tax code compliance review.
★ One procedural detail that decides files: "The property appraiser must note the qualifying census tract information on the appraisal for a property to be designated within a Targeted Area." It is not enough for the tract to qualify — the appraisal has to say so. If you are relying on targeted status for your limits or to waive the first-time rule, make sure the appraiser is told before the report is written, because adding it afterwards means a revision.
The other waiver
Targeted status is not the only way around the first-time buyer rule. An applicant with verifiable military status is exempt regardless of where the property sits, and IHCDA's executive summary describes the three-year ownership restriction as waived "for a Mortgagor who purchases in targeted areas or when the Mortgagor is an Eligible Veteran."
So a veteran buying anywhere in Indiana can use First Step without being a first-time buyer. The full eligibility picture.
Frequently asked questions
What is a targeted census tract in Indiana?
A Qualified Census Tract is one where 70% or more of families have an income that is 80% or less of the statewide median family income, or an Area of Chronic Economic Distress designated by the State and approved by the Secretaries of the Treasury and HUD. Thirty Indiana counties are targeted in their entirety and seventeen more contain targeted tracts.Does buying in a targeted area waive the first-time buyer requirement?
Yes. IHCDA's First Step and Step Down programs require a first-time homebuyer unless the subject property is in a HUD-designated target census tract, or the applicant has verifiable military status. A repeat buyer purchasing in a targeted area can use First Step.How much higher are the targeted area limits?
In most Indiana counties the income limit rises from $95,300 to $114,360 for a one to two person household and from $109,595 to $133,420 for three or more, while the acquisition limit rises from $566,355 to $692,211, effective 5/25/2026.How do I prove a property is in a targeted census tract?
The property appraiser must note the qualifying census tract information on the appraisal. IHCDA's guide states this is required for a property to be designated within a targeted area, so the appraiser should be informed before the report is written.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.