First Step

What is First Step?

First Step is a deferred second loan for homebuyers in Statewide, Indiana.

• First Step is IHCDA's flagship down-payment assistance product, providing up to 6% of the purchase price as a 0% interest non-forgivable second mortgage paired with a 30-year fixed IHCDA first mortgage (FHA/VA/USDA-RD/Conventional). Designed for first-time homebuyers (waived in targeted areas). 660 FICO Conventional / 640 FICO Government. County-specific income and acquisition limits.
• First Step provides up to 6% of the lesser of the purchase price or appraised value as down payment and closing-cost assistance, structured as a 0% interest, non-forgivable second mortgage with NO monthly payments. The principal balance is deferred for the full 30-year first-mortgage term and is due only on sale, refinance, payoff, or transfer of title (or end of the 30-year second-mortgage term, whichever comes first). DPA is paired with an IHCDA 30-year fixed-rate first mortgage (FHA, VA, USDA-RD, or Fannie/Freddie HFA Preferred/Advantage Conventional). First-time homebuyer required (waived in IHCDA-designated targeted areas).
• Funding comes from State, HFA, and Bond.

How much assistance does it provide?

First Step provides assistance worth 6% of the purchase price, as set by the program.

• The program asks buyers to contribute $250 IHCDA reservation/program fee; lender may also require minimum borrower contribution per first-mortgage product.
• Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

First Step is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

• Repayment is triggered by Deferred for life of first mortgage and balance due on sale, refinance, payoff, transfer of title, or end of 30-year DPA term.
• The assistance is recorded in 2nd Lien position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

First Step is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

First Step limits household income to $156,520.

• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

First Step caps the purchase price at $594,770.

• Eligible property types include Single-family detached, condominium, townhouse, PUD, 2-unit (per first-mortgage overlays).
• New construction is eligible.
• Manufactured homes are not eligible.

Is there eligibility for specific groups?

First Step names veterans, active-duty service members, reservists and National Guard members, and surviving spouses among the groups it serves.

• Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Where does it apply?

First Step serves buyers purchasing in Statewide, Indiana.

• The program targets specific areas: IHCDA designates federally qualified target areas (typically lower-income census tracts) where the first-time-homebuyer requirement is waived and income/acquisition limits are higher.

How do you apply?

Applications for First Step go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through IHCDA-approved homebuyer education through Framework, eHome America, or HUD-approved housing counseling agencies; required for all first-time homebuyers prior to closing..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through IHCDA-approved lender reserves funds via IHCDA Online Lender Portal (OLP) at time of loan reservation; subject to bond/program funding availability and $250 reservation fee., and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.