Indiana First-Time Home Buyer Guide 2026
This guide for Indiana first-time home buyers covers IHCDA’s First Step and Next Home down payment assistance, Step Down and Next Step programs, income limits, and step-by-step guidance for first-time buyers in Indiana.
First Step Assistance Program
First Step is IHCDA’s flagship down payment assistance program for Indiana first-time home buyers. It provides 5% of the purchase price as a second mortgage — unlike the forgivable down payment assistance loans some other states offer, First Step’s assistance is non-forgivable and must be repaid.
| Feature | Detail |
|---|---|
| Assistance amount | 5% of the purchase price |
| Repayment | Non-forgivable — structured as a second mortgage that must be repaid |
| Eligible first mortgage | 30-year fixed-rate FHA or Conventional |
| Min credit score | Not published statewide by IHCDA — set by your participating lender |
| First-time buyer required? | Yes, unless purchasing in a targeted census tract |
| Reservation fee | $250 |
| Owner occupancy | Required — must be primary residence |
First Step’s assistance must be repaid. This is a key difference from forgivable DPA programs offered in some other states — First Step provides real help covering the upfront down payment, but borrowers should plan for repayment of the second mortgage. Confirm current repayment terms at in.gov/ihcda.
Next Home and Step Down
Next Home is IHCDA’s more flexible assistance option — unlike First Step, it is not restricted to first-time buyers. Step Down is a rate-only program with no down payment assistance attached.
| Feature | Next Home | Step Down |
|---|---|---|
| DPA amount | 2.50% or 3.50% of purchase price | None — rate-only |
| First-time buyer required? | No | Yes, unless targeted census tract |
| Eligible first mortgages | FHA or Conventional, 30-year fixed | FHA or Conventional, 30-year fixed |
| Reservation fee | Not specified — confirm with lender | $250 |
Next Step Refinance Program
Next Step is a one-time refinance opportunity exclusively for existing IHCDA First Place and First Step borrowers — it is not an option for new home purchases.
- Eligibility: Must have an existing IHCDA First Place or First Step mortgage
- Structure: 30-year fixed-rate FHA or Conventional, non-forgivable DPA
- Reservation fee: $250
These programs have specific income limits, purchase price limits, and geographic restrictions that vary by county. Check with an IHCDA-participating lender for current program availability and terms in your specific county.
Income and Purchase Price Limits
| Program | Income Limit | Purchase Price Limit | Geography |
|---|---|---|---|
| First Step | Set by IHCDA, varies by county (effective May 25, 2026) | Varies by county | Statewide |
| Step Down | Set by IHCDA, varies by county | Varies by county | Statewide |
| Next Home | Set by IHCDA, varies by county | Varies by county | Statewide |
Indiana Down Payment Assistance Eligibility Requirements
To qualify for First Step, Next Home, or Indiana’s other IHCDA DPA programs, buyers generally must meet the following requirements:
- Credit score: Not published as a single statewide minimum by IHCDA — set by your participating lender
- Owner-occupancy: Must live in the home as a primary residence
- Income limits: Household income must be at or below IHCDA’s published limit for the specific county and program
- Participating lender: Must use an IHCDA-participating lender — not all Indiana lenders offer IHCDA programs
- First-time buyer status: Required for First Step and Step Down outside of targeted census tracts; not required for Next Home
- Reservation fee: $250 required for First Step, Step Down, and Next Step
Combining DPA programs: IHCDA’s programs are generally structured as standalone options tied to a specific first mortgage — ask your IHCDA-participating lender which single program offers the best terms for your situation.
Step-by-Step Buying Process for Indiana First-Time Home Buyers
| Step | What to Do | Notes |
|---|---|---|
| 1 | Check your credit score | IHCDA does not publish a single statewide minimum; ask your lender what they require for First Step or Next Home. |
| 2 | Find an IHCDA-participating lender | Not all Indiana lenders offer IHCDA programs. Ask specifically about First Step and Next Home eligibility. |
| 3 | Check income and purchase price limits | Limits vary by county and are updated periodically by IHCDA. |
| 4 | Get pre-approved | Your lender calculates your maximum loan amount and determines which IHCDA programs you qualify for. |
| 5 | Make an offer | Your real estate agent will guide you through Indiana’s standard purchase agreement. |
| 6 | Complete due diligence period | Negotiate inspection contingencies and any repairs or credits per your purchase agreement. |
| 7 | Close on your home | Indiana closings are typically handled by a title company; there is no transfer tax to budget for at recording. |
