First Time Home Buyer – Down Payment Assistance Program

Down Payment Assistance Program (DPA)

Through the Homeownership Opportunity Network (HON), the primary objective of the First Time Homebuyer Program is to improve and revitalize neighborhoods, restore function, character and pride by providing homeownership opportunities. This program makes HOME program funds available in the form of forgivable loans for down payment, principal reduction, and closing costs associated with the purchase of a home. Assistance will be made to eligible individuals and families on a first-come, first-serve and one-time basis, purchasing a single-family structure home in the City of Gary. Applicants must provide total household and financial information prior to a formal approval for assistance. *The program will use 95% of the current HOME Home Ownership Value Limits for a single-family dwelling as ceiling for down payment processing.

Income Requirements

Maximum Income Level for 2021

Persons in HouseholdIncome

Assistance Determination

The maximum amount of assistance will be limited to 10% of the purchase price or $10,000, whichever is less. Down payment assistance will be provided to qualified applicants based on the following criteria:

80% to 70% of area median incomeCan receive up to $4,000 towards purchase price.
69% to 60% of area median income.Can receive up to $5,000 towards purchase price.
59% to 50% of area median income.Can receive up to $6,000 towards purchase price.

Any property located in the Target Areas must be New Construction in order to receive the maximum amount of 10% or $10,000 whichever is less of the purchase price. Existing properties in these areas can receive up to $7,500.  Also, all applicants must successfully complete the City of Gary Homeownership Opportunity Network Homebuyer Education Workshop and Counseling session(s). Contact the Community Development Department at (219) 881-5075 for information on scheduled dates. Certificates accepted from other HUD-certified and approved agencies (dated within 12 calendar months of application).

Lead Based Paint Inspection

All properties built pre-1978 must have a visual inspection for defective surfaces. If lead is found, no DPA funds can be used until stabilized by a Certified Lead Abatement Contractor at the expense of Homebuyer/Seller before close of sale.

Recapture Provision

HOME regulations state that the homebuyer maintains the PROGRAM assisted property as a principal residence during the affordability period. Since the primary goal of this program is the revitalization of neighborhoods, this residency requirement will be enforced and evidenced by the recording of the appropriate document. The down payment assistance must be returned to the PROGRAM if the following conditions occur:

  • The property is sold or transferred during the affordability period. (Temporary subleasing of the property is not allowed.)
  • A home buyer fails to provide proof annually of primary residence on assisted property as requested.

A recorded Down Payment Assistance Agreement, with the City of Gary assuming a junior lien position, will be used as the enforcement vehicle for this program. This lien shall be duly recorded in the appropriate office of county government.

Recapture provisions shall be pro-rated based on HOME assistance per unit and the affordability period (up to 15 years). The table below is based on assistance under $15,000 for a 5 year affordability period.

Affordability Period

The periods of affordability for this program will range from five (5) to fifteen (15) years, commencing on the day of the signing of the down payment assistance agreement and/or closing on the property, for the amounts listed below:


First Time Home Buyer:

The applicant must not have owned a home as their principal residence within a period of 3 years prior to applying for assistance. All applicants are required to contribute a minimum of 1% of their own funds toward the purchase price of an existing property; and, a minimum of 2% toward a new construction purchase. In addition, the applicant must have three (3) months of mortgage payments saved in an account.  The applicant must be eligible through the FTHB program to qualify for any DPA programs.

Click for the First Time Home Buyer Education and Counseling Sessions

Principal Residence

The home purchased must be the place where the applicant lives and not a second home.  An Independent home inspection is required on property at Home Buyer’s expense.

Recapture Provision:
The owner who is subject to recapture is required to repay all or a portion of the direct subsidy provided from the net proceeds of the sale during the affordability period.

Affordability Period:

Restrictions for certain lengths of time, depending upon the amount of  assistance invested.  The period of affordability will commence on the day activity is completed in the Integrated Disbursement  & Information System. (IDIS)

Amount of
Under $15,0005
$15,000 - $40,00010
Over $40,00015

The Gary Target Areas, as declared by the City of Gary Five Year Consolidated Plan, include the following (specific boundaries in these areas also apply):

Target Areas

  • Aetna
  • Midtown
  • University Park
  • Emerson
  • Horace Mann/Downtown West
Down Payment Assistance Secure (20%)

This program provides mortgage assistance to qualifying first time homebuyers. Maximum assistance is 20% of the purchase price, up to $15,000, of an existing home, based on the strength of applicant’s credit history.

Download PDF for Home Buyer Flyer (rev. 02/21)

Download PDF for Home Buyer Registration Form

Download PDF for the First Time Home Buyer Brochure (rev. 06/21)  Click here for HBW Checklist. English.  

Download PDF for the First Time Home Buyer Brochure (rev. 06/21)  Click here for HBW Checklist. Spanish.


Download PDF for CD’s HUD Approved Counseling Agency

Download PDF for IFPN/HHF Foreclosure Program

The Down Payment Assistance Program provides a subsidy for the purchase of  decent & safe housing for eligible low to moderate income families, the elderly and persons with disabilities.

The U.S. Department of Housing and Urban Development {HUD} administrators Federal Funding to local governmental agencies that provide assistance for low-income residents. HUD furnishes technical and professional assistance in planning, development and managing these developments.