Down Payment Assistance
Down Payment Assistance in Indiana (2026)
Indiana homebuyers can access up to $8,400 in down payment assistance through the Indiana Housing and Community Development Authority (IHCDA). On the state's $226,100 median home price, that covers roughly 19% of a standard 20% down payment.
New to this? Quick definitions
- DPA —
- down payment assistance. Money — as a grant or loan — that helps cover the upfront cash you'd otherwise need to buy a home.
- Grant vs. loan —
- a grant is money you never repay. A loan (forgivable, deferred, or repayable) can come with strings attached, even at 0% interest.
- Forgivable loan —
- the balance is wiped out over time if you stay in the home — but it's still a real loan until then, and selling or refinancing early can trigger repayment.
- Deferred loan (silent second) —
- a second loan on your home with no monthly payments, often called a "silent second" because you won't notice it until you sell, refinance, or pay off your first mortgage — that's when it comes due.
- AMI —
- Area Median Income. The midpoint household income for your county, used to set eligibility — programs list limits as a percentage of AMI (e.g. 80% of AMI).
- Income limit —
- the maximum household income you can earn and still qualify, based on where you live and how many people are in your household.
- Purchase price cap —
- the maximum home price a program will help you buy — homes priced above the cap don't qualify, even if your income does.
Do you likely qualify?
The Next Home Down Payment Assistance caps the home purchase price at $481,176 — check that cap against homes you're considering, and the county income limit below.
Primary Program: Next Home Down Payment Assistance
maximum assistance
Forgiven after 2 years if you remain in the home as your primary residence (the home you actually live in, not a rental or second home). Sell, move out, or refinance before then, and you may owe the balance back.
- Administering Agency
- Indiana Housing and Community Development Authority (IHCDA)
- Purchase Price Cap
- $481,176
- Forgiveness Term
- 2 years
How Down Payment Assistance Works
Most state DPA programs are layered on top of a first mortgage — you apply through an approved lender who originates both the primary loan and the DPA second lien at the same closing. The DPA funds reduce the cash you need upfront.
Grants
Free money — no repayment ever. Typically the smallest amounts but highest value.
Forgivable Loans
Balance forgiven after a set period (usually 3–15 years) if you stay in the home. Selling early triggers repayment.
Deferred Loans
No monthly payments. Balance due when you sell, refinance, or pay off your mortgage.
Mistakes first-time buyers make
- Assuming you don't qualify without actually checking the income limit for your county and household size.
- Treating a "forgivable" loan as free money — it can still come due in full if you sell or refinance before the forgiveness term ends.
- Stacking programs incorrectly, or assuming state and local programs combine automatically without confirming with your lender.
- Skipping the required homebuyer education course, which can delay or disqualify your application at closing.
Pro tips
- Talk to a HUD-approved housing counselor first — it's free and they know every program you may qualify for, not just the state's.
- Apply for mortgage pre-approval alongside your DPA program application; most DPA funds are disbursed through an approved lender at the same closing.
- Check local city and county programs in addition to the state program above — many are stackable and cover different costs.
- Ask exactly what triggers repayment on any loan-based assistance before you sign, not after.
Down Payment Calculator
Down Payment Planner
Indiana median pre-loaded
Your Savings Plan
Timeline
7.6 yrs
saving $500/mo
No PMI at 20% down
20% or more avoids private mortgage insurance entirely.
Estimate only — does not include investment returns on savings.
Full Calculator →What the Assistance Does on a $226,100 Indiana Home
A worked example at Indiana's median home price (Zillow Home Value Index, April 2026), using the same payment model as the Indiana salary page: a 7.03% 30-year fixed rate (Freddie Mac PMMS, week of September 24, 2026), PMI from the National MI rate card on the 10%-down case, the state's effective property-tax rate and homeowners premium, and principal, interest, tax and insurance held to 28% of gross income.
How much of the down payment it covers
A 10% down payment on a $226,100 home is $22,610, and 20% is $45,220. The $8,400 Next Home Down Payment Assistance maximum covers 37% of the first and 19% of the second, leaving $14,210 of a 10% down payment to come from savings, before any closing costs.
Whether a household under the income limit can carry it
Carrying the median home takes $64,200 a year with 20% down, or $74,014 with 10% down and PMI. The first-mortgage income limit at Indiana Housing and Community Development Authority (IHCDA) is $110,300 (Marion County (Indianapolis), 1-2 person household, non-targeted ($126,845 for 3+ persons); limits vary by county (e.g. $95,300 in many counties); effective May 25, 2026). (Indiana Housing and Community Development Authority, retrieved 2026-09-14) A household at that limit clears both figures, so the median home sits inside the programme's range: incomes from $74,014 up to $110,300 can carry it with 10% down. At exactly $110,300, the same model supports a price of about $406,414, $180,314 above the median.
The First Mortgage and Closing Taxes This Assistance Has to Cover in Indiana
Recording fees
Statewide county recorder fees under IC 36-2-7-10: $25.00 for any deed or other instrument (other than a mortgage); $55.00 for a mortgage; pages larger than 8.5 x 14: $25.00 first page, $5.00 each additional page. (Indiana State Board of Accounts, retrieved 2026-09-14)
Indiana Housing and Community Development Authority (IHCDA): First Step (bond-funded 30-year fixed with non-forgivable DPA, first-time buyers or targeted tracts); also Step Down (rate only) and Next Home (first-time and repeat buyers)
First Step (bond-funded 30-year fixed with non-forgivable DPA, first-time buyers or targeted tracts); also Step Down (rate only) and Next Home (first-time and repeat buyers) is the first-mortgage programme run by Indiana Housing and Community Development Authority (IHCDA). (Indiana Housing and Community Development Authority, retrieved 2026-09-14) Its purchase-price limit is $566,355 (Acquisition limit for First Step, Step Down and Next Home in most counties including Marion (Indianapolis); $692,211 in targeted areas; effective May 25, 2026), so a $226,100 home is within it. (Indiana Housing and Community Development Authority, retrieved 2026-09-14) The income limit is $110,300 (Marion County (Indianapolis), 1-2 person household, non-targeted ($126,845 for 3+ persons); limits vary by county (e.g. $95,300 in many counties); effective May 25, 2026). (Indiana Housing and Community Development Authority, retrieved 2026-09-14) Down payment help comes through IHCDA Down Payment Assistance (non-forgivable second mortgage) - First Step / Next Home: Next Home: 2.50% or 3.50% based on the purchase price, not to exceed appraised value; non-forgivable second mortgage due in full on sale, refinance or when first mortgage ends. (Indiana Housing and Community Development Authority, retrieved 2026-09-14)
Frequently Asked Questions
What down payment assistance is available in Indiana?
Indiana's primary DPA program is the Next Home Down Payment Assistance, administered by the Indiana Housing and Community Development Authority (IHCDA). It provides up to $8,400 as a forgivable loan. Forgiven after 2 years if you remain in the home as your primary residence (the home you actually live in, not a rental or second home). Sell, move out, or refinance before then, and you may owe the balance back.
How much down payment do I need in Indiana after using DPA?
On a $226,100 home (Indiana median), a 20% down payment is $45,220. With the Next Home Down Payment Assistance covering $8,400, your remaining gap would be $36,820. Many buyers combine DPA with a 3–5% conventional or FHA loan to reduce their cash needed further.
Do I have to repay Indiana down payment assistance?
Forgiven after 2 years if you remain in the home as your primary residence (the home you actually live in, not a rental or second home). Sell, move out, or refinance before then, and you may owe the balance back.
Can I combine Indiana DPA with other assistance programs?
Yes — Indiana's DPA programs can generally be combined ("stacked") with local city and county assistance programs, employer homebuyer benefits, and federal programs. Check with an approved lender or HUD-approved counselor to identify all programs you qualify for.
What are the income limits for Indiana down payment assistance?
The Next Home Down Payment Assistance does not publish its income limit as a single percentage of AMI; limits are set in dollars by county and household size. Check the Indiana Housing and Community Development Authority (IHCDA) website for current limits in your area.
Related Calculators
Home Affordability Calculator
See how much home you can afford in Indiana
PMI Calculator
Estimate private mortgage insurance on lower down payments
Indiana First-Time Buyer Programs
State mortgage programs with low rates and low down payments
Mortgage Payments by Price
See full PITI costs for 8 home prices in Indiana, from $200K to $750K
What to do next
Down payment assistance is one piece of the puzzle. Here's where to go depending on where you are in the process.
Not sure if you qualify?
Check the Indiana Housing and Community Development Authority (IHCDA) income limits above before ruling yourself out — many buyers qualify without realizing it.
Want the full true cost picture?
DPA covers the down payment, not your ongoing costs. See the true cost of owning a home in Indiana for the full monthly picture.
Ready to apply?
Most DPA funds are disbursed through an approved lender at closing — get pre-approved and ask specifically about Next Home Down Payment Assistance when you apply.