Indiana State DPA

IHCDA Down Payment Assistance

Indiana Housing and Community Development Authority (IHCDA) offers two state-backed programs — First Step and Next Home — paired with a 30-year fixed conventional or FHA first mortgage to lower your cash to close.

First Step · up to 5%
Next Home · up to 3.5%
FHA or conventional

Two paths, one goal

State assistance that lowers cash to close

Both IHCDA programs issue assistance as a zero-payment second mortgage — no monthly payment on the aid layer. The difference is how much you receive, who qualifies, and whether the assistance is forgivable or must be repaid.

First-time buyer or targeted area?

First Step may fit — up to 5% assistance, but the DPA must be repaid if you sell or move out.

Owned a home in the last three years?

Next Home opens the door — up to 3.5% on FHA or 3% on conventional, forgivable after the required occupancy period.

30-year fixed first mortgage

Pair with a conventional or FHA first lien — both programs tie directly into a fixed-rate loan.

Zero monthly on the second

Assistance is structured as a second mortgage with no monthly payment due on the aid itself.

Participating lender required

You apply through an IHCDA-approved lender — Ryan and Steve guide you through Luminate Bank.

Program 01

First Step

Built for individuals buying their very first home — or purchasing in a specifically designated census tract.

Up to 5%

of purchase price for down payment or closing costs

How it works

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    • ))}

Non-forgivable — full repayment required

Upon termination of the first mortgage or if the property is no longer your primary residence, the full amount of DPA must be repaid in full. Plan your exit strategy before you close.

Core requirements

    {[ 'First-time homebuyer or purchase in a targeted census tract', '$250 non-refundable reservation fee', 'Region-specific income and purchase price limits apply', ].map((item) => (
    • ))}

How it works

    {[ 'Second mortgage with no monthly payments on the assistance layer', 'Up to 3.5% on FHA loans or up to 3% on conventional loans', 'Paired with a 30-year fixed first mortgage', ].map((item) => (
    • ))}

Forgivable after occupancy period

Unlike First Step, Next Home DPA is forgivable once you live in the home for the state's minimum required timeframe. Stay put, and the assistance can go away entirely.

Core requirements

    {[ 'Open to both first-time and repeat homebuyers', 'Credit score 640 with DTI under 45%, or 680 with DTI up to 50%', 'Same household income limits as First Step', ].map((item) => (
    • ))}
Program 02

Next Home

A path forward if you have already owned a home in the past three years but still need help gathering upfront cash.

3.5%

on FHA loans

3%

on conventional

Side by side

Compare at a glance

The tradeoff is straightforward: more assistance with First Step, but you repay it. Next Home offers less upfront but can forgive — and opens to repeat buyers.

Program 01

First Step

Assistance amount

Up to 5% of purchase price

Forgiveness

Non-forgivable — full DPA repaid if first mortgage ends or home is no longer primary residence

Who it"s for

First-time buyers or purchases in targeted census tracts

Reservation fee

$250 non-refundable

Credit / DTI

Per IHCDA and lender overlays

Program 02

Next Home

Assistance amount

Up to 3.5% (FHA) or 3% (conventional)

Forgiveness

Forgivable after state-required occupancy period

Who it"s for

First-time and repeat buyers

Credit / DTI

640 score (DTI under 45%) or 680 score (DTI up to 50%)

Income limits

Same household limits as First Step

How to qualify & the process

IHCDA assistance is not applied for directly through the state. You secure your primary loan through an IHCDA participating lender — Ryan Minick and Steve DeLon at Luminate Bank guide you through the full process.

  1. 01 Pre-qualify with an IHCDA participating lender to confirm income, credit, and purchase price fit program limits.
  2. 02 Choose First Step or Next Home based on your ownership history, target area, and forgiveness preference.
  3. 03 Reserve your DPA slot (First Step requires a $250 non-refundable fee) and lock your first mortgage.
  4. 04 Close on your Indiana primary residence — appraisal value must stay within state purchase price caps.

Property & residency rules

    {[ 'Home must be your primary residence located in Indiana', 'Final appraised value cannot exceed state-mandated purchase price caps', 'Region-specific income limits apply to both programs', ].map((item) => (
    • ))}

Additional program overlays

    {[ 'Homebuyer Education (HBE) is required if all borrowers are first-time homebuyers', 'No temporary buydowns allowed', 'Co-signors not allowed', 'Renovation products not allowed', 'If payment shock is greater than 100% (for example, current rent is $1,000 and the new payment is $2,250 — payment shock is 125%: $1,250 ÷ $1,000), or the borrower lives rent-free, 2 months of reserves are required. Gift funds cannot be used to meet the reserve requirement. If rent is not clearly noted on the bank statement, it must be verified with a VOR.', ].map((item) => (
    • ))}

Federal recapture tax

Selling your home too quickly — often within about 9 years — may trigger a federal recapture tax on your net proceeds. We walk through this scenario before you commit so there are no surprises at resale.

Program guidelines, income limits, and purchase price caps change. This page is educational — final eligibility is confirmed when your file is underwritten against current IHCDA rules.

Ready to explore IHCDA assistance?

Ryan and Steve will screen First Step and Next Home against your county, income, and loan type — then build a pre-approval that accounts for state DPA up front.

(765) 450-8933 Get Started