Saving for a down payment can feel like the biggest hurdle between you and a home in Brownsburg. If you are buying in ZIP 46112, Indiana’s Housing and Community Development Authority (IHCDA) offers programs that can lower your upfront costs and help you qualify with confidence. In this guide, you’ll learn how IHCDA assistance works, who qualifies in Hendricks County, how it affects your offer and monthly payment, and how to work with participating lenders. Let’s dive in.
What is IHCDA DPA?
IHCDA down payment assistance (DPA) helps first-time and returning buyers reduce the cash needed to close. Most programs pair with common mortgages and are reserved through approved lenders. The exact terms depend on the program and the loan type you choose.
Types of assistance
- Deferred second mortgage: A second loan that covers part of your down payment or closing costs. Repayment can be deferred or due at sale or refinance, depending on the program.
- Forgivable second: A subordinate lien that is forgiven after you meet a set owner-occupancy period and program rules. Selling or refinancing early may trigger repayment per program terms.
- Grant-style assistance: Less common at the state level and usually limited to pilot offerings. Most IHCDA help is structured as a second mortgage.
- Mortgage Credit Certificate (MCC): A federal tax credit issued through state programs. It reduces your annual federal income tax liability by a percentage of mortgage interest. It is not cash DPA, but it can improve monthly affordability and sometimes help underwriting.
Typical loan pairings
- IHCDA programs commonly work with FHA, conventional, USDA, and VA loans when program rules allow.
- Some IHCDA products are limited to specific loan types. Your participating lender will confirm which options fit your situation.
Key point: Always verify the current program mix and Hendricks County limits on the official IHCDA site before you make decisions.
Who qualifies in 46112?
Eligibility is program specific, but there are common basics that apply across most IHCDA options. Rules and limits can change, so it pays to check them early and confirm again before you go under contract.
Residency and buyer status
- You must occupy the property as your primary residence.
- First-time buyer status typically means you have not owned a home in the past three years. Some programs waive this in targeted areas or for certain buyer profiles. Verify the definition for your chosen program.
Income and price limits
- Most IHCDA options cap household income based on county and household size.
- Purchase price caps also apply and vary by county. For Brownsburg (Hendricks County), confirm current income and price limits on the IHCDA site.
Credit, loan type, and property
- Minimum credit scores depend on the mortgage product and your lender’s underwriting. Lenders may set higher standards than the program minimums.
- Eligible properties often include single-family homes, certain condos, and some townhomes. Investment properties are not eligible.
- The home must meet appraisal and condition standards for the underlying loan program.
Homebuyer education
- IHCDA commonly requires a counselor-led education course for DPA users and many first-time buyers.
- You will need a certificate of completion before closing. Approved providers and timing are available on the IHCDA site.
How DPA impacts your offer
Down payment assistance can make buying more affordable, but it also adds a few details to your strategy. Understanding these up front helps you write cleaner offers and close on time.
Cash to close
- DPA reduces the amount of cash you need for your down payment and closing costs, which can widen the range of homes you consider in Brownsburg.
- Because DPA adds documentation, disclose your use of assistance early to the seller so everyone can align on concessions and timelines.
- Your lender must reserve DPA funds with IHCDA. Build in time for reservation and approval so your closing date is realistic.
Underwriting and LTV
- A DPA second mortgage sits behind your primary loan. The primary mortgage may cover a smaller share of the purchase price, which can help meet certain loan-to-value thresholds.
- Lenders follow specific guidance on how DPA is treated in underwriting. Your participating lender will explain how your chosen program fits their investor rules.
Monthly payment and insurance
- If your DPA is forgivable or deferred with no interest and no monthly payment, it typically will not add to your monthly housing payment.
- If your DPA is an amortizing second that carries interest, that payment is included in your monthly debt-to-income ratio and increases your total housing cost.
- Conventional loans with less than 20 percent down usually require private mortgage insurance (PMI). FHA loans require mortgage insurance premiums (MIP) regardless of DPA.
Appraisal, title, and resale
- The property still must appraise at or above the purchase price, and it must meet condition standards.
- The DPA second mortgage is recorded as a lien. Any HOA or title matters must be cleared at closing.
- Forgivable assistance may be recaptured if you sell or refinance before the forgiveness period ends. Confirm the timeline with your lender.
Working with participating lenders
You access IHCDA programs through approved lenders. Choosing the right partner and following a simple process can keep your purchase on track.
How to find a lender
- Use the IHCDA website to review homebuyer programs, county limits, and the list of participating lenders. Start with lenders who regularly close IHCDA loans in Hendricks County.
Step-by-step process
- Get preapproved: Share income, assets, and credit details. Confirm the lender’s IHCDA experience and expected timelines.
- Complete education: Finish the required homebuyer education course and obtain your certificate.
- Reserve DPA: Your lender reserves funds with IHCDA and gathers any program forms.
- Underwriting and appraisal: Standard loan processing runs in parallel with the DPA paperwork.
- Close: The primary loan and the DPA second close together, and the subordinate lien is recorded.
Documents checklist
- Income documents such as pay stubs, W‑2s, and tax returns
- Bank statements and ID
- Purchase agreement and any gift letters
- Homebuyer education certificate and IHCDA forms
Timeline tips
- DPA reservations often have expiration windows. Align your contract and closing date with the reservation period.
- Communicate early with the seller about any extra documentation needs and appraisal timing.
- Program funds can be limited. Availability may change during the year, so begin early.
How to compare lenders
- Experience with IHCDA programs in Hendricks County
- Clarity on fees and DPA terms, including whether the second is forgivable, deferred, or amortizing
- Speed of reservations and closings
- Ability to pair your preferred mortgage type with the DPA
Next steps for Brownsburg buyers
If you are planning a purchase in 46112, take these focused steps to set yourself up for success:
- Review current IHCDA homebuyer programs, county income and price limits, lender lists, and education providers on the official IHCDA site.
- Learn about your underlying loan options. See FHA basics at the U.S. Department of Housing and Urban Development, check USDA Rural Development for rural loan details if applicable, and explore the U.S. Department of Veterans Affairs for VA loans.
- Brush up on mortgage shopping best practices with the Consumer Financial Protection Bureau. This helps you compare offers and understand fees.
- Ask each participating lender whether your DPA would be forgivable, deferred, or amortizing. Request a payment estimate that includes any second-mortgage terms and mortgage insurance.
- Share your DPA plan with your agent so your offer reflects the right concessions, timelines, and financing contingencies.
Buying your first home in Brownsburg does not have to be overwhelming. With the right DPA program, a participating lender, and a clear plan, you can lower your upfront costs and write offers with confidence. If you want a local guide to help you compare options and negotiate strong terms, connect with Scott Harmeyer for tailored next steps.
Ready to move forward in Brownsburg? Book a consultation with Scott Harmeyer to map your financing path and your offer strategy.
FAQs
Do IHCDA programs limit my ability to negotiate with sellers?
- No. They lower your cash to close, but some programs limit seller concessions and add documentation. Share your DPA plan early so timelines and terms align.
Will down payment assistance increase my monthly mortgage payment?
- Only if the assistance is an amortizing second or carries interest. Forgivable or deferred assistance without payments typically does not raise your monthly payment, though lenders may still consider it in DTI.
Can I use IHCDA assistance with FHA, VA, or USDA loans?
- Often yes, but it depends on the specific IHCDA program. Confirm compatibility with a participating lender before you write an offer.
Is a Mortgage Credit Certificate the same as down payment help?
- No. An MCC is a federal tax credit that reduces your annual tax liability. It can boost affordability but does not provide cash for your down payment or closing costs.
Where can I find Hendricks County income and purchase price limits?
- Check the current county limits and program pages on the IHCDA website. Verify figures before you make decisions or submit an offer.
