IHCDA's down payment assistance is a second mortgage that is not forgiven. It must be repaid in full when the first mortgage ends or the home stops being your primary residence. You get it through an IHCDA participating lender, and income and purchase price limits apply.
The four IHCDA homebuyer programs
The Indiana Housing and Community Development Authority (IHCDA) lists four homebuyer programs. All of them are available in all 92 Indiana counties. [1] [2]
| Program | What it offers | Who it is for |
|---|---|---|
| First Step | Down payment assistance of 5% of the home price, with an FHA, Freddie Mac or Fannie Mae 30-year fixed-rate mortgage | First-time homebuyers, with exceptions listed below |
| Step Down | A lower interest rate with the same kinds of 30-year fixed-rate mortgage. It is a rate-only program, with no down payment assistance | First-time homebuyers, with the same exceptions |
| Next Home | Down payment assistance of up to 3.5% of the home price, with the same kinds of 30-year fixed-rate mortgage | First-time and repeat homebuyers |
| Next Step | A one-time refinance of an existing IHCDA mortgage | People who already have an IHCDA mortgage from certain earlier programs |
The older First Place program ended on December 31, 2023. Sources: [1] [2]
Who qualifies
Every IHCDA homebuyer program has income limits and purchase price limits, and the limits vary by county. For First Step and Step Down, IHCDA's program guide lists these requirements: [2]
- You are a first-time homebuyer, or you have verifiable military status, or the home is in a qualified census tract (a "targeted area")
- Your income is within the limit for the Indiana county where you will live
- The home is under the current purchase price limit
- You meet the residency status rules, and the home meets the program's property guidelines
What counts as a first-time homebuyer
IHCDA defines a first-time homebuyer as someone who has not had a present ownership interest in their principal residence at any time during the three years before the loan closing. The test applies to the people who sign the loan documents and plan to live in the home. Buyers in targeted areas and eligible veterans are exempt. [2]
Look up your county's limits
IHCDA publishes the income and purchase price limits by county. Look up Clark, Floyd, Harrison or any other Indiana county on IHCDA's income and acquisition limits page. [3]
How the down payment assistance works
- It is a second mortgage. IHCDA offers the assistance as a non-forgivable second mortgage next to your first mortgage.
- The amount follows the price. First Step provides 5% of the home price. Next Home provides up to 3.5%, based on the purchase price or the appraised value, whichever is less.
- When you repay it. The full amount must be repaid when the first mortgage ends or the home stops being your primary residence.
- Recapture tax. First Step and Step Down loans can carry a federal recapture tax if you sell and the required thresholds are not met. Ask your lender how it applies to you.
Source: [2]
Homebuyer education, credit score and debt-to-income
IHCDA's program guide lists a homebuyer education certificate among the required documents. It names Fannie Mae's HomeView and Freddie Mac's CreditWise as the only acceptable courses. The minimum credit score and the maximum debt-to-income ratio are set by IHCDA and its master servicer, so ask your lender for the current numbers. [2]
How to get started
- Find a lender on IHCDA's participating lenders list. [4]
- Ask the lender to check your first-time buyer status, your income against your county's limit and the price range that fits.
- Complete the homebuyer education course if the program you choose requires it.
- Start your home search with your pre-approval in hand.
The loan and the assistance come from the participating lender. Tina helps with the home search, the offer and the closing process.
Buying in Kentucky?
Kentucky has its own programs. See Kentucky first-time home buyer programs, or read the first-time buyer guide for the whole process.
Indiana first-time buyer program questions
Is Indiana down payment assistance a grant?
How much down payment help does IHCDA offer?
Do I have to be a first-time homebuyer?
Can I use IHCDA programs in any Indiana county?
What is an IHCDA participating lender?
Sources and scope
General consumer information, checked against IHCDA's published pages and program guide in October 2026. IHCDA says program availability and guidelines are subject to change without notice. This is not financial or legal advice. Ask a participating lender for the current terms and your own eligibility.