First-Time Home Buyer Programs in Indiana

Indiana Housing and Community Development Authority (IHCDA) Programs:

First Step Program:

Eligibility: Targets first-time homebuyers (no homeownership in the past three years), buyers in targeted areas, or qualified veterans.
Offerings: Provides a 30-year fixed-rate mortgage (FHA or conventional) with up to 6% of the purchase price as down payment assistance via a non-forgivable second loan (no interest or monthly payments; repaid at sale or end of term).
Requirements:

• Income must not exceed county-specific limits (e.g., $93,840 for a 3-person household in Marion County as of 2025).
• Minimum credit score of 640 (or 680 if debt-to-income ratio exceeds 45%).
• Debt-to-income ratio capped at 50%.
• Homebuyer education course required for all first-time buyers.

Next Home Program:

Benefits: Offers 3.5% of the purchase price as down payment assistance (second loan, no interest, monthly payments optional based on terms) for first-time or repeat buyers; combinable with IHCDA first mortgages.
Eligibility: Must use an IHCDA-approved lender; income and purchase price limits apply (e.g., $424,100 for a single-family home in non-targeted areas).

Mortgage Credit Certificate (MCC):

Description: Provides a federal tax credit of up to $2,000 annually on mortgage interest paid; available to first-time buyers or those in targeted areas using an IHCDA mortgage; fee of $800 applies.
Requirements: Must pair with an IHCDA first mortgage; same income and purchase price limits as other IHCDA programs.

Local Programs:

Indianapolis

Hoosier Homes Program: Offers up to 6% down payment assistance (max varies by home price, up to $450,000) for first-time or repeat buyers in Marion County; income must not exceed $114,240 annually.

Bloomington

HAND Down Payment and Closing Cost Assistance: Provides up to $10,000 as a forgivable second mortgage (forgiven after 5 years) for first-time buyers; income must be at or below 80% of area median income (AMI).

Evansville

HOPE Down Payment Assistance: Matches up to $15,000 for down payment and closing costs (buyer contributes $1,000 minimum); targets first-time buyers within city limits with income below area limits.

Additional Information:

• FHA Loans: Minimum 3.5% down payment, suitable for credit scores as low as 580 (10% if below 580).
• USDA Loans: Zero-down payment option for rural Indiana areas; income limits apply.
• VA Loans: Zero-down payment for eligible veterans or active military; no location-specific income limits.