Indiana’s first-time buyer help comes mostly as forgivable second mortgages — money written off over time that behaves like a grant if you stay in the home — delivered through the state housing authority and its programs.
This guide covers what actually counts as grant money for first-time buyers in Indiana in 2026 — the help that does not have to be repaid, the truth about the federal grant everyone asks about, and how to find and qualify for it.
Are there really first-time home buyer grants in Indiana?
Here is the honest answer most sites skip: a true grant is money you never repay, but the majority of what gets marketed as a “first-time home buyer grant” is actually a forgivable loan — a second mortgage that is written off over time as long as you stay in the home. The practical difference is small if you plan to stay put, but it matters if you might sell or refinance early. Indiana’s housing authority (IHCDA) offers forgivable down payment assistance rather than outright grants, so the help is effectively free if you keep the home through the forgiveness period.
For the full difference between grants, forgivable seconds, and deferred loans, our national guide to down payment assistance breaks it down.
Indiana grant and forgivable-money programs
Here is the grant-equivalent money available in Indiana:
- First Step down payment assistance — a forgivable second of roughly 5–6% of the purchase price, written off over time — behaves like a grant if you stay (verify the current percentage)
- Next Home down payment assistance — a forgivable second of up to 3.5% of the price, open to repeat buyers as well
- Helping To Own (H2O) — additional forgivable / grant-style down payment help for eligible buyers
This page focuses on the no-repay and forgivable money. For the full menu — including deferred loans, below-market mortgages, and the Mortgage Credit Certificate — see our complete guide to Indiana first-time home buyer programs.
The $25,000 first-time buyer grant — is it real?
You have probably seen ads for a “$25,000 first-time home buyer grant” or a “$15,000 first-time buyer tax credit.” Here is the truth as of 2026: both come from proposed federal bills (the Downpayment Toward Equity Act and the First-Time Homebuyer Tax Credit Act) that have not become law. No one can give you that $25,000 federal grant today, in Indiana or anywhere else, because it does not exist yet — so be cautious with any site or “lender” that promises it. We track the real status on our explainer of the $25,000 first-time home buyer grant. The good news: the Indiana programs above are real, available now, and often just as valuable.
How to qualify for a grant in Indiana
Grant and forgivable programs in Indiana share a familiar set of rules:
- Income limits. IHCDA sets income limits by county and program.
- First-time status. First-time status is required for some programs (First Place) and waived in targeted areas and for veterans; Next Home allows repeat buyers.
- Homebuyer education. Nearly every grant program requires a short course, usually free and often online.
- A participating lender. Grants are delivered through approved lenders, not the agency directly, so ask which programs a lender offers — and check our guide to credit score requirements to be sure you qualify for the underlying loan.
- Primary residence. The home must be the one you live in, not an investment property.
How to find down payment grants in Indiana
Indianapolis buyers often start with a nonprofit like the Indianapolis Neighborhood Housing Partnership, which pairs assistance with advising — and IHCDA-participating lenders can layer the state forgivable help.
Several Indiana cities also run their own grant and forgivable programs on top of the state help — see our city guides for Indianapolis.
And before you count on any figure, remember that grant funding runs in cycles and can be exhausted, so always confirm current availability with the program. Our first-time home buyer checklist keeps the rest of your purchase on track.
Indiana first-time buyer grants FAQ
Do first-time home buyer grants in Indiana have to be repaid?
Indiana’s IHCDA down payment assistance is forgivable — you do not repay it as long as you keep the home through the program’s forgiveness period. Sell or refinance early and you may repay a prorated share. So while it is technically a second mortgage rather than an outright grant, it functions like a grant for buyers who stay.
Is there a $25,000 grant for first-time buyers in Indiana?
Not currently. The $25,000 figure comes from a proposed federal bill (the Downpayment Toward Equity Act) that has not become law, so it is not available in Indiana or any state today. What is available are Indiana’s real grant and forgivable programs described above, plus the statewide options in our Indiana programs guide.
Who qualifies for down payment grants in Indiana?
First-time status is required for some programs (First Place) and waived in targeted areas and for veterans; Next Home allows repeat buyers. IHCDA sets income limits by county and program. You will also complete a homebuyer education course and use a participating lender.
Are Indiana’s down payment programs grants or loans?
They are forgivable second mortgages, which land somewhere in between. You receive the money as a lien on the home, but it is written off over time — so if you stay through the forgiveness period, you never repay it, just like a grant. IHCDA’s First Step (roughly 5–6%) and Next Home (up to 3.5%) are the main options, plus Helping To Own. A participating lender can confirm the current terms.