What Help Is Available to First-Time Buyers in New Albany?

First-time buyers in New Albany can often get help from the Indiana Housing and Community Development Authority (IHCDA), the state's housing agency. Its First Step program pairs a 30-year fixed-rate home loan with down payment help, and you apply through an IHCDA participating lender, not through the state.

Who Counts as a First-Time Buyer?

More people qualify than you might think. IHCDA says a first-time buyer is someone who has not owned their main home in the last three years.

So if you sold a house years ago and have rented since, you may still count. Some IHCDA programs also let you qualify by buying in a "targeted census tract." That is an area marked to encourage home buying.

What Kind of Help Is It?

Most of the help is for the down payment. That is the cash you put toward the price of the home at closing.

IHCDA's February 2026 program guide says First Step offers down payment help equal to 5% of the purchase price. It comes as a second mortgage. A second mortgage is a smaller loan that sits behind your main home loan.

The help is "non-forgivable." That means you pay it back. It comes due when you sell, refinance, or stop living in the home as your main home.

IHCDA also offers Next Home, which gives smaller down payment help and does not require you to be a first-time buyer. Programs and amounts change, so ask a participating lender what is available the day you apply.

What New Albany Buyers Should Know

New Albany is in Floyd County, Indiana. That matters because IHCDA sets its income limits by county and household size. A New Albany buyer is checked against the Floyd County limit, not the limit for Clark County next door or for Louisville across the river. Shopping both counties? Ask your lender to check both.

A few more rules to know:

• The home must be your main home. These programs are not for rentals or second homes.
• First Step requires a homebuyer education class. IHCDA accepts online courses from Fannie Mae and Freddie Mac.
• Your lender reserves the funds for you. IHCDA lists a $250 reservation fee for First Step.

You can read the full details on IHCDA's Homeownership Programs page.

How Do You Get Started?

1. Find an IHCDA participating lender. IHCDA keeps a lender list on its website.
2. Get pre-approved. Tell the lender you want to be checked for IHCDA programs.
3. Take the homebuyer class early so it does not slow down your closing.
4. Shop for homes in your approved price range.

Learn more in our New Albany, Indiana real estate guide.

A Tip From a Local Agent

Ask two or three lenders the same question: "Am I eligible for First Step, and what is my monthly payment with it and without it?" The help gets you in the door, but that second mortgage still has to be paid back when you sell or refinance. Seeing both numbers side by side helps you choose what fits your budget, not just what gets you to closing. Also tell your agent early, so your offer has a realistic closing timeline.

Related Questions

Do I have to be a first-time buyer to get down payment help in Indiana?

Not always. IHCDA's Next Home program offers down payment help without a first-time buyer rule, though income and other limits still apply.

How do property taxes work in Floyd County, Indiana?

The county assessor sets your home's assessed value, and local tax rates are applied to it. Indiana caps taxes on a main home at 1% of its gross assessed value, and you must file for the homestead deduction to get the lower bill.

How do I choose a Realtor in New Albany, Indiana?

Talk with two or three agents who work in Floyd County often. Ask how they help first-time buyers and how they work with lenders on assistance programs.

Have a question about buying your first home in New Albany? Summit Edge Realty is always happy to help you sort it out, with no pressure.

Rob Gaines, Summit Edge Realty | Keller Williams Realty Consultants
Updated October 2026