Indiana First-Time Home Buyer Programs 2026: IHCDA Guide

IHCDA Programs Overview

The Indiana Housing and Community Development Authority (IHCDA) is the state housing finance agency, offering first mortgages and down payment assistance through participating lenders statewide.

IHCDA's two main products are First Place (first-time buyers) and Next Home (open to repeat buyers). Both pair a 30-year fixed first mortgage with DPA of up to 6% of the purchase price.

First Place: First Mortgage + 6% DPA

First Place is IHCDA's flagship program for first-time buyers, pairing a 30-year fixed-rate FHA or conventional first mortgage with down payment assistance of up to 6% of the purchase price.

The DPA is a forgivable second mortgage — forgiven after 9 years of occupancy (or 2 years for some program versions). Stay the required period and you owe nothing. Sell or refinance earlier and you repay the unforgiven balance.

On a $250,000 Indiana home, 6% provides $15,000 — covering the entire 3.5% FHA down payment ($8,750) plus $6,250 toward closing costs. Minimum credit score is 640. See our FHA vs conventional guide for loan-type help.

• 30-year fixed-rate FHA or conventional first mortgage
• DPA up to 6% of purchase price
• Forgivable second — forgiven after 9 years (2 for some versions)
• Minimum 640 credit score
• First-time buyer (waived in targeted areas and for veterans)
• Income and purchase price limits vary by county

Next Home: For Repeat Buyers Too

Next Home offers the same structure as First Place but is open to buyers who currently own a home or have owned one in the past 3 years — making it one of the more flexible state programs.

The DPA amount is typically 3.5-4% of the purchase price (slightly less than First Place's 6%), structured as a forgivable second mortgage with the same forgiveness schedule.

Next Home works well for move-up buyers, people relocating to Indiana, or anyone who does not meet the first-time buyer definition but still needs help with upfront costs.

• Open to repeat buyers — no first-time requirement
• DPA of 3.5-4% of purchase price
• Forgivable second mortgage
• Same 640 credit minimum
• Income limits apply
• Good for move-up buyers and relocations

Helping to Own (H2O) & MCC

Helping to Own (H2O) provides up to $2,500 as a true grant for closing costs — never repaid. It is designed for buyers who can cover the down payment but need help with closing costs, and it can combine with First Place or Next Home.

The IHCDA Mortgage Credit Certificate (MCC) provides a federal tax credit of up to $2,000 per year for the life of the loan — worth $60,000 over 30 years. It reduces your federal tax liability dollar-for-dollar.

The MCC can be combined with IHCDA first mortgages. Ask your lender about adding it — the upfront fee is small compared to the lifetime benefit.

• H2O: up to $2,500 grant for closing costs — never repaid
• MCC: up to $2,000/year federal tax credit
• MCC worth up to $60,000 over 30 years
• Both can combine with First Place or Next Home
• MCC has a small upfront fee — worth it long-term
• Ask your lender to include the MCC at application

IHCDA Income and Purchase Price Limits 2026

IHCDA income limits vary by county and household size. Here are the approximate 2026 limits for major Indiana counties — verify at IN.gov/IHCDA.

• Income limits based on total household income
• Indianapolis metro and NW Indiana have the highest limits
• Purchase price limits apply to total price
• Targeted areas have higher limits and no first-time requirement
• Verify current limits at IN.gov/IHCDA

IHCDA Eligibility Requirements

To qualify for First Place, first-time buyer status means no ownership in a primary residence in the past 3 years — waived in targeted areas and for veterans. Next Home has no first-time requirement.

Credit score: minimum 640 for all IHCDA programs. DTI: maximum 45% for conventional, up to 50% for FHA with automated approval. See our DTI ratio guide for strategies.

Occupancy: primary residence only. Homebuyer education: required for first-time buyers — HUD-approved courses are available online.

• First-time buyer for First Place (waived: targeted areas, veterans)
• Next Home: no first-time requirement
• Credit score: 640+ for all programs
• DTI: 45% conventional, up to 50% FHA
• Primary residence only
• Complete HUD-approved homebuyer education
• Must use an IHCDA participating lender

How to Apply for IHCDA Programs

IHCDA programs are accessed through participating lenders — you cannot apply directly to IHCDA.

Step 1: Find a participating lender at IN.gov/IHCDA. Step 2: Get pre-approved — the lender verifies credit, income, and program eligibility. Step 3: Complete homebuyer education. Step 4: Find a home within the purchase price limit. Step 5: Close — DPA funds are delivered at settlement.

• Step 1: Find an IHCDA participating lender at IN.gov/IHCDA
• Step 2: Get pre-approved and confirm program eligibility
• Step 3: Complete HUD-approved homebuyer education
• Step 4: Shop within county purchase price limits
• Step 5: Close — DPA funds delivered at settlement
• Tip: Ask about adding the MCC — $2,000/year tax credit adds up

Local Indiana DPA Programs

Several Indiana cities offer additional assistance.

• Indianapolis has the largest local program
• Local programs may stack with IHCDA — ask your lender
• City programs typically have lower income limits
• Funding cycles open and close — check availability early