hey prescott.
See what you qualify for

Step Down

Statewide, Indiana

Last verified
See what you qualify forOfficial program site →
Assistance

3%

Of the purchase price, as the program sets it

Income limit

$156,520

The household income limit the program publishes

Price cap

$594,770

Highest purchase price the program allows

Repayment

Deferred

No payments until the home is sold or refinanced

What is Step Down?

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

  • Step Down is IHCDA's lower-cost alternative DPA tier, structured as an interest-only 30-year fixed first mortgage with optional ~3% deferred 0% interest non-forgivable second-mortgage DPA. Designed to reduce initial monthly housing costs. Available to first-time homebuyers (waived in targeted areas). 660 FICO Conventional / 640 FICO FHA. County-specific income and acquisition limits. Cannot be combined with any other IHCDA program.
  • Step Down is an IHCDA mortgage product offering an interest-only 30-year fixed-rate FHA or Conventional first mortgage, which can be paired with a smaller (up to 3%) deferred 0% interest non-forgivable second-mortgage DPA tier. The interest-only first-mortgage structure is designed to lower initial monthly payments — making Step Down a 'lower-cost alternative' to First Step. The DPA second is deferred with no monthly payments until sale, refinance, or payoff. Available to first-time homebuyers and buyers in IHCDA-designated targeted areas.
  • Funding comes from State, HFA, and Bond.

How much assistance does it provide?

Step Down provides assistance worth 3% of the purchase price, as set by the program.

  • Buyer contribution: Per first-mortgage product overlays.
  • Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

Step Down 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 and second-mortgage balance due on sale, refinance, payoff, or transfer of title.
  • 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?

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

The program requires

  • First-time homebuyer — with exceptions: First-time-homebuyer rule waived in IHCDA-designated federally targeted areas and for qualifying veterans
  • The home is occupied as a primary residence
  • On credit: 660 minimum FICO for Conventional; 640 minimum FICO for FHA
  • A completed homebuyer education course, through IHCDA-approved homebuyer education (Framework, eHome America, or HUD-approved counseling); required for first-time homebuyers prior to closing.
  • Residency: Property must be located in Indiana and used as borrower's primary residence
  • Citizenship or immigration status: U.S. citizen, permanent resident, or qualifying non-permanent resident alien per first-mortgage product overlays
  • First-time homebuyer required (waived in IHCDA-designated federal targeted areas). Minimum 660 FICO for conventional, 640 for FHA. Max 45% DTI. Property must be primary residence. Household income at or below IHCDA published county limits (top tier ~$156,520). Purchase price at or below IHCDA county-specific acquisition limit. CANNOT be combined with First Step, Next Home, or any other IHCDA DPA program.

The program excludes

  • Manufactured homes
  • Purchases above the $594,770 price cap
  • Households above $156,520

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

Step Down 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?

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

  • Eligible property types include Single-family detached, condominium, townhouse, PUD.
  • New construction is eligible.
  • Manufactured homes are not eligible.

Is there eligibility for specific groups?

Step Down 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?

Step Down serves buyers purchasing in Statewide, Indiana.

  • The program targets specific areas: IHCDA designates federally qualified target areas where income/acquisition limits and FTHB rules are relaxed.

How do you apply?

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

  1. Take a homebuyer education course

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

  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 are subject to availability.

  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.

Other programs in Statewide, Indiana

See every program in Statewide, Indiana →

90-second match

Not sure which you qualify for?

Answer 9 questions and we'll match you to every program you can actually use — in about 90 seconds. No SSN, no credit pull.

Find my programs