Down Payment Options in Indiana: 2026 Update for Indy Buyers

Buying your first home in Indianapolis can feel like a big hurdle — especially when it comes to saving for a down payment. But in 2026, there are more tools than ever to help Hoosiers bridge that gap, whether you’re right outside downtown or exploring neighborhoods like Irvington or Broad Ripple.

Below, we break down down payment assistance programs and options available to Indiana buyers this year, including state-level resources, local help in Indianapolis, and creative strategies that make homeownership more affordable.

We’ll also link to helpful Roots guides like First-Time Homebuyer Guide for Indianapolis in 2026 and How to Budget for Closing Costs in Indiana (2026 Edition) later in the post.

What Down Payment Assistance Really Means

Down payment assistance programs provide funds up front to help cover your down payment (and sometimes closing costs), often with no monthly payments or interest if you meet requirements. These can be grants, deferred loans, or forgivable second mortgages — and they’re designed to help buyers who might otherwise struggle to save tens of thousands of dollars.

Statewide Indiana Programs (Great Starting Point)

IHCDA Down Payment Assistance Programs

The Indiana Housing & Community Development Authority (IHCDA) offers several strong programs for first-time Indiana buyers:

First Place Program

• Offers up to 6% of the purchase price as DPA (second mortgage).

• No monthly payments or interest — forgiven after 9 years if you stay in the home.

• Works with FHA or conventional 30-year loans.

• Great choice for many first-time buyers who meet income, credit, and property requirements.

Next Home Program

• Offers 2.5%–3.5% DPA toward the purchase price.

• Forgivable after 2 years if you stay in the home.

• Can often be paired with a Mortgage Credit Certificate (MCC) to save on taxes.

✅ These can be combined with FHA or conventional lending, making them flexible for Indianapolis buyers.

Local & Community Programs in Indianapolis

INHP Down Payment Assistance

The Indianapolis Neighborhood Housing Partnership (INHP) offers down payment funds for buyers who work with its lending programs — a useful route if you want hands-on guidance.

INHP helps with:

• Down payment support

• Guidance through pre-qualification and application

• Education on eligibility and income limits

This can be especially helpful if you’re new to homebuying or navigating assistance programs for the first time.

Federal & Regional Assistance Programs You Should Know

Launch – Down Payment Assistance (FHLBank Indianapolis)

• Helps qualified first-time buyers with down payment, closing, and counseling assistance.

• For 2026, the program opens April 14 — planning ahead is key.

• Participate through approved lenders; it’s not a direct application from homebuyers.

💡 Some lenders (like community banks) offer Launch funds up to ~$20,000 for down payment and closing cost help.

HomeBoost & Other Community Support

If you fit certain criteria (e.g., first-generation or minority homebuyer), programs like HomeBoost can offer additional DPA funds when paired with an approved lending partner — typically kicked off in summer 2026.

Other Helpful Options for Hoosier Buyers

FHA, VA, USDA & Conventional Low-Down Loans

Even with assistance programs above, some buyers pair them with flexible loan products:

• FHA loans let you buy with as little as 3.5% down, and gifts from family or assistance programs can cover that gap.

• VA loans offer 0% down and no mortgage insurance for eligible veterans.

• USDA loans also offer zero down in qualifying rural/suburban areas.

• Conventional loans with PMI can require as little as 3% down with certain programs like Fannie Mae HomeReady or Freddie Mac Home Possible.

These aren’t grants, but when coupled with DPA, they drastically lower the upfront cash you need.

How to Make These Programs Work for You

Here’s a quick checklist to stay on track:

1. Get pre-approved with a lender who knows Indiana DPA — not all lenders offer these programs.

2. Ask about combining assistance programs with your loan type (FHA, conventional, etc.).

3. Complete any required education/counseling early — many programs require this before closing.

4. Check income & purchase price limits — every program has its own thresholds.

5. Plan around key application dates, like the Launch opening in April 2026.

Q&A: Down Payment Assistance in Indiana 2026

What counts as a first-time homebuyer?

Usually someone who hasn’t owned a home in the last 3 years or meets targeted area requirements for specific programs.

Can I use assistance for closing costs too?

Many programs (like Launch and IHCDA options) allow funds for closing costs, but always confirm with your lender.

Do I have to repay down payment assistance?

Often no monthly payments or interest, especially on forgivable second mortgage programs like First Place — but if you sell or refinance early, repayment may be required.

Does Indianapolis have city-specific DPA?

Some local organizations (like INHP) offer assistance tied to their lending products.

Should I wait to buy until assistance opens?

Programs like Launch have specific windows — but many (like IHCDA’s First Place) are continuous. Connect with a loan officer early to time it right.

Final Thoughts: Make 2026 the Year You Buy

Down payment programs are not one-size-fits-all, but 2026 is shaping up to be one of the most supportive years yet for Indiana first-time buyers. Between state assistance, community programs, and smart loan strategies, you have the tools to make homeownership more affordable.

To make your plan even stronger, check out:

• First-Time Homebuyer Guide for Indianapolis in 2026 (Roots guide)

• How to Budget for Closing Costs in Indiana (2026 Edition) (Roots guide)

Ready to explore your options and figure out which down payment programs you qualify for?
Reach out and let’s map out your home-buying strategy together!

👉 Roots buyer resources: https://rootsrealty.co/buy