Down Payment Assistance in Indiana, Explained Properly
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
Indiana's assistance is real money and worth having. The way it gets described almost everywhere gets the single most important thing about it backwards.
Does Indiana down payment assistance have to be paid back?
Yes. All of it, every time. This is the one fact to take away from this page, because it is the opposite of what most Indiana down payment assistance pages tell you. IHCDA's own Homeownership Program Guide, footer-dated 02/2026, describes the assistance as offered by "a non-forgivable second mortgage with IHCDA holding title as evidence," and says that on termination of the first mortgage or the property no longer being a primary residence, "the full amount of DPA must be repaid in full."
Section 1 of the same guide removes the last bit of wiggle room: "There is no proration associated with the IHCDA DPA loan." There is no five-year burn-down, no ten-year clock, no partial credit for time served. The balance you took is the balance you repay.
Compare what neighbouring states do and you can see why so much Indiana guidance gets this wrong by analogy. What non-forgivable actually costs you, and the five events that trigger it.
What programs does IHCDA actually offer?
Four. Not the six or seven you will find listed elsewhere, because several of those ended. Every one is a 30-year fixed rate loan, FHA or Conventional, available in all 92 counties, with a $250 non-refundable reservation fee and U.S. Bank HFA Division as Master Servicer.
| Program | Assistance | First-time buyer? | Recapture tax? | Price cap? |
|---|---|---|---|---|
| First Step | 5% of purchase price | Yes* | Yes | Yes |
| Next Home | 2.50% or 3.50% | No | No | FHA yes, conventional no |
| Step Down | None — rate only | Yes* | Yes | Yes |
| Next Step | Matches your existing IHCDA lien | Refinance only | — | — |
* Waived if you buy in a HUD-designated targeted census tract, or if you have verifiable military status. Each program in full, and how to choose between the two that pay.
Whose income does IHCDA count?
Only the people signing the loan. The STEPS Lender Matrix states it in one line: IHCDA uses "1003 applicant qualifying income, not household income." The program guide agrees — qualifying income is the income of the mortgagor and co-mortgagors who will live in the home and are liable on the note.
That is genuinely different from how most state programs work, and it matters more than it sounds. A 24-year-old living at home while they save, a parent who moved in, a roommate splitting the mortgage: in a household-income state, their paycheques can disqualify the buyer. In Indiana they are simply not counted. Non-occupying co-signers are allowed too, and their income is excluded as well. How IHCDA calculates your income.
Why does the conventional route allow so much more?
Because IHCDA publishes two entirely separate limit tables and the conventional one is far more generous. Next Home Conventional, Next Step Conventional and Next Step FHA share an income table that carries no acquisition limit at all — IHCDA's limits page prints the column as "Acquisition Limits N/A."
| County | FHA table, 1–2 person | Conventional table | Difference |
|---|---|---|---|
| Marion (Indianapolis) | $110,300 | $154,420 | $44,120 |
| Allen (Fort Wayne) | $95,300 | $133,420 | $38,120 |
| Lake / Porter | $100,900 | $141,260 | $40,360 |
Add the missing price cap on top. A buyer told they "earn too much for Indiana assistance," or that their price is "over the limit," has very often only been measured against the FHA table. The conventional route in detail.
Is First Place still available?
No. It ended on 12/31/2023, and IHCDA states the date itself inside its current program guide, in the description of the Next Step refinance: "individuals who are currently participating in either the First Place (ended 12/31/2023), First Step, or the Step Down program." The First Place program guides have been moved under the Archive heading on IHCDA's live programs page.
If you have been reading about an Indiana first-time buyer grant that covers most of a down payment, that was almost certainly First Place, and it has not existed for nearly three years. What replaced it.
What are the income and price limits?
They took effect 5/25/2026. In a county with no targeted tract the FHA table allows $95,300 for one to two people and $109,595 for three or more, against an acquisition limit of $566,355. Inside a targeted area those become $114,360, $133,420 and $692,211.
30 Indiana counties are targeted in their entirety and 17 more contain a targeted census tract, which raises your limits and waives the first-time buyer rule. Your county's numbers · Whether your address qualifies.
Frequently asked questions
Does Indiana down payment assistance have to be repaid?
Yes, in full. Every IHCDA down payment assistance product is a non-forgivable second mortgage. IHCDA's 02/2026 program guide states that the full amount must be repaid when the first mortgage terminates or the property stops being the primary residence, and that there is no proration associated with the IHCDA DPA loan. It is not a grant and no part of it is forgiven over time.How much down payment assistance can I get in Indiana?
First Step provides 5% of the purchase price. Next Home provides 2.50% or 3.50%, based on the purchase price and not exceeding the appraised value. Step Down provides an interest rate option with no assistance. All figures are from IHCDA's Homeownership Program Guide dated 02/2026 and its live programs page.Do I have to be a first-time buyer for Indiana down payment assistance?
Not always. First Step and Step Down require a first-time homebuyer, defined as not having owned a principal residence in the previous three years, unless the property is in a HUD-designated targeted census tract or the applicant has verifiable military status. Next Home carries no first-time buyer requirement at all.Whose income counts for IHCDA programs?
Only the applicants on the loan application. The STEPS Lender Matrix states that IHCDA uses 1003 applicant qualifying income, not household income. Income belongs in the calculation if the person will live in the home and is liable on the note. Non-occupying co-signers are permitted and their income is excluded.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.