First Place Program First-Time Homebuyer Assistance Programs

Indiana’s First Place Program: The Springboard First-Time Buyers Need

Picture this: You finally find a bungalow on a leafy Indianapolis street, but the down payment still feels like scaling Mount Everest. That’s where the First Place Program swoops in with up to 6% down payment assistance and a competitive fixed rate mortgage. Indiana created the initiative to turn “someday” into moving day for thousands of first-time homebuyers.

The following guide breaks down every facet of the First Place Program, from eligibility rules to insider tips that help your application shine. You’ll also find real-life numbers, a micro-story from past buyers, and answers to the most Googled questions—so you can step into open houses with confidence, not doubt.

What Is the First Place Program in Indiana?

The First Place Program—sometimes listed as the IHCDA First Place loan program—pairs a 30-year fixed-rate FHA, VA, or USDA mortgage with forgivable down payment assistance (DPA). The program is administered by the Indiana Housing & Community Development Authority (IHCDA) and is designed exclusively for first-time buyers or those purchasing in a federally targeted area.

• Down Payment Help: 6% of the purchase price (capped by loan type) delivered as a second mortgage that’s 100% forgiven after nine years in the home.
• Interest Rate: Generally 0.25—0.50% below standard FHA/VA/USDA rates, saving borrowers thousands in lifetime interest.
• Available Statewide: From South Bend to Evansville, any qualifying property in Indiana can leverage the benefit.

How Does the First Place Program Work?

1. Down Payment & Closing Cost Assistance

Indiana’s real estate market has heated up: the median home price touched roughly $240,000 in early 2024, according to regional MLS data. A 3.5% FHA down payment on that price equals $8,400—before you even tally closing costs. The First Place Program can shoulder up to $14,400 on that purchase, dramatically reducing out-of-pocket cash.

2. Forgivable Second Mortgage Structure

The assistance is structured as a silent, 0% second mortgage. Remain in the home nine years, and it evaporates like morning fog. Sell sooner? You’ll repay a prorated amount based on how long you lived there—still far gentler than traditional DPA recapture rules.

3. Competitive Primary Mortgage

Because the IHCDA issues bonds to subsidize the rate, borrowers snag a below-market 30-year fixed loan—often shaving 0.25% off traditional quotes. On a $200,000 loan, that quarter-point drop equates to roughly $10,500 saved over the life of the mortgage (assuming you hold it full term).

Who Is Eligible for the First Place Program?

The First Place Program targets first-time buyers, meaning you haven’t owned a primary residence in the past three years. However, purchase in a federally designated target area, and the three-year rule disappears.

• Credit Score: Minimum 640 for most lenders; some approve FHA with 620 if compensating factors exist.
• Income Caps: Vary by county and household size—ranging from about $99,000 in rural counties to $134,600 in Marion County for a family of three or more.
• Purchase Price Limit: Generally up to $481,176 (for 2024) in non-target areas and $588,104 in target areas.
• Home Type: One- to four-unit primary residences, certain condos, and manufactured homes on permanent foundations.

Pro tip: Lenders must be IHCDA-approved. A quick phone call to confirm can save you hours later.

How Much Down Payment Assistance Can I Get in Indiana?

The First Place Program offers up to 6% of the purchase price or total loan amount—whichever is lower. On a $275,000 home, that means as much as $16,500 in forgivable support. Unlike grants with hard dollar caps, the percentage model ensures help scales with rising Indiana home prices.

Step-by-Step Application Checklist

1. Pull Your Credit – Check for errors that could dip your score below the 640 threshold.
2. Attend Homebuyer Counseling – A HUD-approved course is required; most offer a weekend webinar option.
3. Choose an IHCDA Lender – Ask whether they process the First Place loan program weekly; familiarity speeds approval.
4. Get Pre-Approved – Lock in the discounted interest rate before touring homes.
5. Find a Home & Write the Offer – Include a 45-day closing window to accommodate IHCDA compliance review.
6. Complete Compliance File – Your lender uploads income docs; you sign a second mortgage and note for the DPA.
7. Close & Move In – Then watch that second mortgage evaporate over nine years.

A Micro-Story: Maria & Jordan’s Mortgage Makeover

Maria, a nurse, and Jordan, an HVAC technician, rented a two-bedroom in Fort Wayne for $1,350 a month. They had saved $6,000—barely enough for closing costs on their $220,000 dream home. Their loan officer introduced the Indiana First Place Program. By pairing the 6% DPA with seller credits, Maria and Jordan brought just $1,200 to closing and nabbed a 0.375% lower rate than their peers. Two years later, they’ve built roughly $25,000 in equity—all because of strategic timing and a state-backed tool.

Pros & Cons at a Glance

Five Insider Tips to Strengthen Your Application

1. Pad Reserves: Underwriters love three months of mortgage payments in savings; it can offset a borderline credit file.
2. Mind Overtime Income: IHCDA counts all household income—even that gig-economy side hustle—when measuring caps. Keep paperwork handy.
3. Ask for a Pre-Closing Compliance Review: Some lenders submit documents twice, catching snags before the final clock starts.
4. Time Your Application: Apply early in the month; bond allocations can fill quickly after the 15th when rates reset.
5. Leverage Target Areas: Buying in a HUD-designated zone lifts the first-time-buyer rule and raises income limits—worth mapping before you house-hunt.

First Place vs. Other Indiana Homebuyer Programs

Indiana offers multiple paths to homeownership. Here’s how the First Place Program stacks up:

• Next Home Program: Caters to repeat buyers but only provides 3.5% assistance—half the First Place benefit.
• IHDFS Grants: Non-repayable grants up to $10,000 but targeted to very specific populations such as teachers or first responders.
• Federal Home Loan Bank Grants: Up to $12,500 but subject to annual funding cycles and lender quotas.

For buyers who meet income and purchase limits, First Place remains the most generous statewide option—especially once you factor in its low interest rate.

FAQ: Fast Answers to Remaining Questions

Does the First Place Program require mortgage insurance?
Yes. FHA borrowers pay MIP; VA/USDA have their own guarantees. The assistance doesn’t waive these fees.

Can I combine First Place with seller concessions?
Absolutely. Standard FHA/VA/USDA concession rules apply—up to 6% of the price on FHA and VA, 4% on USDA.

Is the DPA taxable income?
No, because the second mortgage is technically a loan—not a cash gift—so it isn’t counted as income for IRS purposes.

What happens if I refinance before nine years?
Any unpaid balance on the assistance loan rolls into the payoff. Plan to hold the first mortgage or budget for recapture.

Do I need perfect credit?
No. Many borrowers close with scores in the mid-600s, but better credit still lowers overall costs.

Your Next Move Starts Today

If Indiana is home—and you’re ready to swap rent checks for equity—the First Place Program could be the single most powerful line on your mortgage quote. Talk with an approved lender, pull that free credit report, and map out target areas that fit your budget. Every month you wait is another payment building someone else’s wealth.

Ready to see if you qualify? Reach out to our trusted lending partners or schedule a free 15-minute strategy call with a local housing counselor. The keys to your “first place” might be closer than you think.

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