A Comprehensive Guide to Down Payment Assistance Programs in Indiana 2025

Admit it or not, purchasing a home is a huge financial commitment. And, for many potential buyers in Indiana, one of the biggest challenges is mainly the down payment. To champion this challenge, a wide variety of down payment assistance Indiana-based programs are available at both local and state levels.

Providing financial aid – either as repayable or forgivable loans – these programs are aimed at making homeownership more accessible. The below-mentioned analysis, as of March 28, 2025, sheds light on the DPA (down payment assistance) landscape of Indiana, detailing different aspects like eligibility criteria, program structures, and associated advantages and disadvantages.

If you are a potential homebuyer, take the time to understand these programs thoroughly—as knowledge is power when it comes to making informed decisions and maximizing financial assistance.

Down Payment Assistance in Indiana: Program Details and Eligibility

The Indiana Housing and Community Development Authority (IHCDA) is the primary state agency providing DPA, with programs including Next Home and First Step. In addition to this, local initiatives in cities such as Evansville and Bloomington provide targeted assistance. Ahead is an in-depth look at these programs as per official sources as well as program guides.

IHCDA First Step Program

As the name suggests, the First Step in down payment assistance Indiana-based program is tailored for those looking to buy a home for the first time. This step provides significant DPA with both FHA and Conventional versions. The in-depth and accurate guidelines are available in the IHCDA First Step FHA Guide and IHCDA First Step Conventional Guide.

Program Structure:

Provides up to 6% of the lesser of the appraised value or purchase price as a completely non-forgivable second mortgage. There’s no requirement for any monthly payment, but the amount is due open refinance, sale or mortgage payoff within 30 years.

Eligibility:

• First-time homebuyer (no ownership interest in a principal residence in the last 3 years, waived for intended areas or eligible veterans).
• Targeted areas including counties such as Clinton and Brown, with economically distressed regions and designated census tracts.
• Minimum FICO score of 640 with a DTI (debt-to-income) ratio below 45%, or 680 with a DTI between 45%-50%.
• Acquisition and income cost limits fluctuate by county, detailed in program guides.
• Property should be a principal residence, with eligible property types including condos, townhomes, PUDs, single-family homes, and permanently affixed manufactured homes.

Don’t forget to check your eligibility today and explore your suitable options!

IHCDA Next Home Program

The Next Home Program, available in both conventional and FHA options, is tailored for repeat buyers. You can draw the program details in the Next Home Conventional Guide and Next Home FHA Guide.

Program Structure:

Offers up to 3.5% down payment assistance as a second mortgage with a period of 3-year affordability. The loan is due especially if the property is sold, refinanced, or no longer serves as the principal residence of the borrower within this period.

Eligibility:

• No first-time homebuyer requirement.
• Minimum 680 with a DTI between 45% and 45%-50% or FICO score of 640 with a DTI below 45%.
• Acquisition and income cost limits apply, similar to First Step.
• Can be paired with an MCC (Mortgage Credit Certificate) for tax benefits, requiring an $800 upfront fee.

Make sure that you check your eligibility today and explore your options!

Local Programs & Down Payment Assistance in Indiana: Explore Your Options

Local programs providing down payment assistance Indiana comes up with custom-tailored support through forgivable loan structures, although they are limited to specific geographic restrictions.

Bloomington HAND Program (Bloomington Financial Assistance)

Structure

• Provides up to $10,000 as a forgivable second mortgage, forgiven at around 20% per year and completely forgiven after 5 years, especially if the property remains occupied by the owner.

Eligibility

• First-time home buyers with income at or below 80% of the AMI (Area Median Income), limited to Bloomington. Ensure that you check your eligibility today to explore the best options available for you!

HOPE of Evansville (HOPE Qualifications)

Structure

• Matches up to $15,000, necessitating a minimum $1,000 buyer contribution. This is forgivable over time if conditions are fulfilled.

Eligibility

• First-time home-buyers in Evansville with income per HUD guidelines should qualify for an acceptable mortgage. Consider checking your eligibility today to explore the best options suitable to your needs.

United Way of Wabash Valley (UWWV Home DPA)

Structure

• Provides up to 5% assistance (2% for closing costs, 3% for down payment) for houses priced up to $80,000, with a maximum of $4,000 for higher-priced homes.

Eligibility

• Likely income restrictions are available in Parke, Clay, Vermillion, Sullivan, Clark (IL) and Vigo counties. Check your eligibility now!

Hoosier Homes (Marion County) (Hoosier Homes)

Structure

• Club 720 has partnered with Hoosier Homes to provide up to 6% down payment assistance Indiana for homes up to $450,000. The second loan is forgivable over 3 years in case the property remains owner-occupied.

Eligibility

• Household incomes should be ≤$114,240 annually, available in Marion County and several other designated areas.

Down Payment Assistance in Indiana – Pros and Cons Analysis

Check out the table below that summarizes the pros and cons of every program to improve decision-making –

The Final Words

The DPA programs of Indiana offer important financial assistance to both first-time as well as repeat homebuyers. While some offer forgivable loans, others need repayment under certain conditions. With median home prices at $259,900 (as of December 2024), these programs improve affordability. However, funding availability might differ, with potential waiting lists and annual updates.

For the latest updates, connect to program administrators or approved lenders. The IHCDA suggests reaching out through homeownership@ihcda.in.gov for assistance or guidance on evolving guidelines. A thorough understanding of these programs helps home-buyers leverage assistance to gain homeownership.