First-Time Home Buyer Programs in Indiana

Indiana Housing and Community Development Authority (IHCDA) Programs:

First Step Program:

Eligibility: First-time buyers (no homeownership in past 3 years), veterans, or those purchasing in targeted areas.
Offerings: Up to 6% down payment assistance (DPA) as a non-forgivable second loan, paired with a 30-year fixed FHA or conventional mortgage.
Requirements:

• Must meet income limits based on county and household size (e.g., $93,840 for 3-person household in Marion County).
• Minimum credit score of 640 (680 if DTI exceeds 45%).
• Debt-to-income ratio may not exceed 50%.
• Homebuyer education is required.
• $250 reservation fee applies.

Step Down Program:

Description: Provides a below-market fixed interest rate on a 30-year FHA or conventional loan.
Eligibility: Same as First Step; often used as an alternative for buyers prioritizing lower monthly payments over larger DPA.

First Place Program:

Benefits: Offers up to 6% DPA through a second mortgage that is fully forgivable after 9 years (if not sold or refinanced).
Target Group: First-time buyers, veterans, and buyers in targeted census tracts.

Next Home Program:

Benefits: 2.5% to 3.5% DPA for FHA or conventional loans; non-forgivable, but no monthly payments due.
Eligibility: Open to both first-time and repeat buyers. Must use IHCDA-approved lender and meet county-based income and purchase price limits (e.g., $424,100).

Mortgage Credit Certificate (MCC):

Description: Federal tax credit of up to $2,000 annually for mortgage interest paid. Can be claimed alongside the standard mortgage interest deduction.
Requirements: Must use an IHCDA mortgage and meet standard income/purchase price guidelines; $800 fee applies.

Local Programs:

Indianapolis (Hoosier Homes)

Offers up to 6% DPA for first-time or repeat buyers purchasing homes up to $450,000. Income limit: $114,240. Requires homebuyer education and use of approved lenders.

Bloomington

HAND Down Payment and Closing Cost Assistance: Up to $10,000 as a forgivable loan (forgiven after 5 years). Must be a first-time buyer with income ≤ 80% of area median income.

Evansville

HOPE Down Payment Assistance: Matches buyer funds up to $15,000 for down payment and closing costs. Requires a minimum $1,000 contribution and homebuyer education.

Additional Information:

• FHA Loans: 3.5% down with credit score ≥580; 10% down for scores between 500–579.
• USDA Loans: 0% down for rural buyers; income caps apply by county.
• VA Loans: No down payment for eligible service members and veterans; no PMI or income limits.
• Fannie Mae HomeReady / Freddie Mac Home Possible: 3% down for low-to-moderate income buyers with flexible credit standards.