First Time Home Buyer Programs in Pennsylvania 2023
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The Pennsylvania Housing Finance Agency (PHFA) is a non-profit organization created by the Pennsylvania legislature that provides several mortgage programs to help home buyers. PHFA aims to provide affordable housing to all residents of Pennsylvania. Their home buyer programs target a variety of situations, which gives home buyers several options. PHFA mortgages and programs offer financial benefits that include competitive mortgage rates, fewer fees, and down payment assistance.
First-Time Home Buyer Eligibility Calculator
Pennsylvania State Programs | |||
|---|---|---|---|
| No | Program | Type | Jurisdiction |
| 1 | HFA PreferredTM | Main Programs | Pennsylvania State |
| 2 | Keystone Home Loan Program | ||
| 3 | Keystone Advantage Assistance Loan Program | Optional Add-Ons | |
| 4 | Mortgage Tax Credit Certificate | ||
| 5 | HOMEstead Downpayment and Closing Cost Assistance | ||
| 6 | Employer Assisted Housing (EAH) | ||
| 7 | Programs for Persons with Disabilities | Restricted Eligibility to Persons with Disabilities | |
Federal Programs | |||
| No | Program | Type | Jurisdiction |
| I | Conforming Loan | Fannie Mae and Freddie Mac | Federal |
| II | FHA Loan | Federal Housing Association | |
| III | VA Loan | US Department of Veterans Affairs | |
| IV | USDA Loan | U.S. Department of Agriculture | |
Pennsylvania State Programs
Main Programs
PHFA offers mortgage programs with competitive mortgage rates and lower fees: HFA PreferredTM, Keystone Home Loan Program, and Keystone Government Loan Program.
1. HFA PreferredTM
The HFA PreferredTM program offers a 30-year fixed-rate loan that is similar to a conventional loan. If you make less than a 20% down payment, you will have to buy private mortgage insurance (PMI) to protect the lender from default risk. The mortgage rate and minimum down payment will depend on your financial circumstance, the lender, and the current benchmark rates like the Prime Rate, which is linked to the Federal Funds Rate.
- The mortgage loan cannot be for a two-unit property
- Supply a down payment of at least $1,000 using your own money (no down payment assistance programs)
- Your household income must be lower than your county’s maximum income limit
- Complete a home buyer education course through the PHFA or Framework. You can also complete a Pre-Purchase education course offered by PHFA-Approved Agencies, which will fulfill your education course requirement and provide a $300 credit toward your closing costs.
For more information, visit the PHFA Home Purchase Loans page and to apply, talk to a PHFA-approved lender.
2. Keystone Home Loan Program
The Keystone Home Loan Program offers loans with lower borrower requirements to first-time home buyers, which are insured by the Pennsylvania Housing Insurance Fund (PHIF). Your mortgage rate will depend on your financial circumstance, the lender, and the current benchmark rates like the Prime Rate.
- First-time home buyer (You have not owned a home within the last 3 years)
- Minimum down payment of 3% - 5%
- Minimum credit score of 660
- Your household income must be lower than your county’s maximum income limit
- The price of your home must be lower than your county’s maximum purchase price limit
For more information on this program and extra eligibility details, visit the PHFA Home Purchase Loans page. To apply, talk to a PHFA-approved lender.
PHFA offers several purchase assistance programs that act as optional add-ons to your primary mortgage. These programs include:
- Keystone Advantage Assistance Program
- Mortgage Tax Credit Certificate
- HOMEstead Downpayment
- and Closing Cost Assistance
- Employer Assisted Housing (EAH)
3. Keystone Advantage Assistance Loan Program
The Keystone Advantage Assistance Loan Program offers a second mortgage to help meet your minimum down payment or pay for closing costs. With this program, you can receive the minimum of 4% of the purchase price, or 4% of the market value, or $6,000. This second mortgage has no mortgage rate but it is paid back through monthly payments over a 10-year mortgage term. Other than the Access Modification Loan program, you cannot use this program with any other PHFA Assistance Program.
- Minimum credit score of 660
- Minimum loan amount of $500
- Your liquid assets must not exceed $50,000 after deducting closing costs (includes cash, checking accounts, savings accounts, stocks, bonds, certificates of deposit, and other liquid assets)
Only available with the following primary mortgages:
- HFA PreferredTM Loan
- Keystone Home Loan
- Keystone Government Loan
4. Mortgage Tax Credit Certificate
The Mortgage Tax Credit Certificate (MCC) program offers the option to use 20% - 50% of your annual mortgage interest payments as a federal tax credit. This program has a maximum total annual claim of $2,000. Mortgage interest is the portion of your monthly payment that does not go toward paying off the mortgage’s principal amount and is determined by your mortgage rate. This program can be used with the Keystone Advantage Assistance Program but it cannot be used with the Keystone Home Loan Program. You can continue to benefit from your MCC for as long as you pay interest on the primary mortgage you used to obtain it.
- Have an HFA PreferredTM Loan or Keystone Government Loan
- First-time home buyer (You have not owned a home within the last 3 years)
- Your household income must be lower than your county’s maximum income limit
- The price of your home must be lower than your county’s maximum purchase price limit
- Complete the PHFA Mortgagor’s Affidavit, reaffirm it at closing, and sign the Recapture Tax Notice
- Complete an education course if your credit score is below 680
For more information about getting an MCC and to calculate how much you can benefit from having an MCC, visit PHFA’s official website.
5. HOMEstead Downpayment and Closing Cost Assistance
The HOMEstead Downpayment and Closing Cost Assistance program offers a forgivable second mortgage of up to $10,000 to help meet your minimum down payment or pay for closing costs. This loan has no mortgage rate and 20% of the principal amount is forgiven each year throughout its 5-year mortgage term. That means that you do not need to make any payments on this loan and after 5 years, it will be forgiven as long as you do not sell your house, refinance, repay, or end your mortgage contract in any way. If you do end your mortgage contract, you must pay the remainder of the loan as one lump sum payment.
- Minimum loan amount of $1,000
- Your household income must be lower than your county’s maximum income limit
- The price of your home must be lower than your county’s maximum purchase price limit
- The home must be within a county listed in the above limits
For more information and further details about eligibility, visit PHFA’s Official Assistance Loans page.
6. Employer Assisted Housing (EAH)
The Employer Assisted Housing (EAH) Initiative allows participating employers to offer a monetary home purchase benefit to employees. Eligible employees can receive a Keystone Advantage Assistance Loan of up to $8,000 for down payment and closing cost assistance, which is $2,000 more than the original Keystone Advantage Assistance Loan Program. This loan has no mortgage rate and is repaid through monthly payments over a 10-year mortgage term.
Unlike the original program, there are no eligibility requirements other than working for a participating employer.
To apply for this program, talk to a PHFA-approved lender.
Restricted Eligibility to Persons with Disabilities
PHFA offers buyers with disabilities or household members with disabilities an exclusive program to help with home purchases: Programs for Persons with Disabilities.
7. Programs for Persons with Disabilities
The Programs for Persons with Disabilities offers several add-on benefits to home buyers that are eligible for one of PHFA’s other mortgage programs.
- Up to a $15,000 no-interest assistance loan if the buyer’s household income does not exceed 90% of the statewide family median income. This may not be used with other assistance programs
- Eligible for the HOMEstead program. This may not be used with other assistance programs.
- Eligible for the PHFA’s Access Home Modification Program, which offers a no-interest loan between $1,000 and $10,000 if you have a PHFA Keystone Home Loan or Keystone Government Loan. This program is used to help you make modifications to your home to accommodate a disability. This loan does not require repayment if the property is your principal residence.
If you choose to take advantage of PHFA’s Access Home Modification Program, you must provide the lender with a contract. To learn more about the Programs for Persons with Disabilities and for details on how to apply for the Access Home Modification Program, visit PHFA’s Official Assistance Loans page.
First-Time Home Buyer Programs by County, PA
Different counties in Pennsylvania have their own programs that provide financial assistance to first-time home buyers. There are 67 counties in PA, and most of them have first-time homebuyer assistance that may come in handy with a government-insured loan such as FHA, VA, or USDA. These loans may be used for covering the mortgage while the local support may provide assistance with the down payment. Usually, this assistance comes in the form of a forgivable loan.
First Time Home Buyer Programs in Philadelphia
Philadelphia has one assistance grant that aims at providing down payment assistance to income-qualifying people. This program covers the whole county of Philadelphia and is funded by the City of Philadelphia.
This program provides a down payment assistance grant to first-time homebuyers or people who have not owned a home for at least 3 years. Philly First Home provides the lower of $10,000 or 6% of the purchase price to cover a down payment or closing costs. This program provides necessary assistance in the form of a grant, but there are some requirements that a buyer has to meet before applying for this grant.
Requirements
- First Time Home Buyer (Or Have Not Owned a Home for 3 Years or More).
- Homeownership Counseling Must Be Completed.
- Household Income Is No More Than 100% of Area Median Income (AMI).
First Time Home Buyer Programs in Allegheny County
Allegheny County has a Mortgage Financing Assistance program that is temporarily closed due to lack of funding. It will keep operating once they have sufficient funds to provide assistance.
This program provides a low-cost mortgage opportunity to qualifying individuals looking to buy a house in Allegheny County. This program provides a 30-year fixed mortgage with a 3.5% down payment requirement. Mortgage Financing Assistance covers all cities of Allegheny County except for the City of Pittsburgh. The interest rate is set at 3.75%, but it can be lowered to 3.60% with mortgage discount points. To be eligible, a buyer must meet the following requirements.
Requirements
- First-Time Home Buyer (Or Have Not Owned a Home for 3 Years or More).
- Must Use Home as a Primary Residence.
- Debt-to-Income (DTI) Ratio Must Be No More Than 41%.
- Household Income Is No More Than 100% of AMI.
First Time Home Buyer Programs in Montgomery County
Montgomery County has a Montgomery County First Time Homebuyers Program in the form of a grant that provides assistance that does not require repayment unless the house bought is sold or otherwise transferred, vacated or abandoned within 15 years from the date of purchase, or used as an investment property.
This program is a forgivable grant of 10% of the estimated affordable sales price, and it cannot exceed $10,000. The interest rate on this grant is 0%, and it does not need to be repaid if the buyer meets the conditions for the house. There are some requirements for Montgomery County First Time Homebuyers Program a buyer must meet to be eligible for this grant.
Requirements
- First-Time Home Buyer (Or Have Not Owned a Home for 3 Years or More).
- Household Income Is No More Than 100% of AMI.
- Purchased Property Used as a Primary Residence.
- Able to Qualify for Conventional Loan at or Below the Market Current Rates.
- Reside or Be Employed in Montgomery County.
- Have a Minimum of $3,000.00 in Liquid Assets.
- Homeownership Counseling Must Be Completed.
First Time Home Buyer Programs in Bucks County
Bucks County, just like the other counties mentioned above, has its own first-time home buyer program that provides a grant to qualifying individuals. Their assistance is repayable at the time of transfer, which means that the borrower will have to repay the assistance provided when the property is sold or transferred otherwise, is refinanced, or is not used as a principal residence anymore.
First Time Home Buyer Program in Bucks County is a deferred loan with 0% interest, which means that the borrower does not have to pay anything for this loan until the borrower transfers the property, refinances it, or changes the primary residence. The loan provides assistance of up to $10,000 that can be used for closing costs and down payment. There are certain requirements that a borrower must meet to be eligible for this program.
Requirements
- First-Time Home Buyer (Or Have Not Owned a Home for 3 Years or More).
- Household Income Is No More Than 100% of AMI.
- Purchased Property Used as a Primary Residence.
First Time Home Buyer Programs in Delaware County
Delaware County has a first-time home buyer program that assists the new home buyers by providing down payment and closing costs assistance. Delaware County also has other programs for future and existing homeowners, such as housing rehabilitation and lead hazard programs.
This program provides a down payment and closing costs assistance in the form of a forgivable loan. It can provide assistance for up to $5,000 with a 0% interest rate and can be forgiven after 5 years. On the other hand, it must be paid off if the property purchased is sold or transferred to another person. This program is generally available to low to moderate-income households, so there are some requirements that must be met to be eligible for this program.
Requirements
- Must Be First Time Home Buyer.
- Household Income Is No More Than 80% of AMI.
- The Price of the Property May Not Exceed $237,000.
- Purchased Property Used as a Primary Residence.
- Able to Qualify for Conventional Loan at or Below the Market Current Rates.
First Time Home Buyer Programs in Largest Cities
In addition to the county and state first-time homebuyer programs, many municipalities also provide assistance to first-time home buyers. They usually cover the area of the municipality, which means that a municipal program can be applied only to a house located in the municipality. This list does not include the City of Philadelphia because it is the same as Philadelphia County, which means that they have the same programs.
First Time Home Buyer Programs in Pittsburgh PA
Pittsburgh is located in Allegheny County, and the first-time home buyer program in Allegheny County does not cover the City of Pittsburgh. On the other hand, the City of Pittsburgh has its own programs that support people looking to buy a house, need money for repairs, or even need assistance with rent. This assistance is funded by the Urban Redevelopment Authority of Pittsburgh.
This program is designed for first-time homebuyers who are looking to buy a residential unit within the City of Pittsburgh. Qualifying individuals can receive up to $7,500 to cover the down payment and closing costs. This assistance is provided in the form of a deferred loan with a 0% interest rate. There are two products available in this program, and they target different income levels.
- First-time homebuyers who earn less than 80% AMI may be eligible to receive up to $7,500 as a 5-year deferred loan with a 0% interest rate.
- First-time homebuyers who earn between 80% AMI and 115% AMI may be eligible to receive up to $5,000 as a 10-year deferred loan with a 0% interest rate.
Requirements
- Must Be First Time Home Buyer.
- Household Income Is No More Than 115% of AMI.
- The Price of the Property May Not Exceed $237,000.
- Purchased Property Used as a Primary Residence.
- The Buyer Must not Have Any Outstanding Taxes to the City, School, or County.
First Time Home Buyer Programs in Allentown PA
Allentown does not have that many programs that may be used by future and current homeowners, but they have a first-time home buyer program that may benefit some home buyers. The difference between first-time home buyer programs in Allentown to other cities is that it is not funded by the municipal government but by certain community agencies.
This program allows qualifying home buyers to purchase a property with a down payment as low as 3% of the sale price. This loan will require a buyer to take a homeownership class before being eligible for a mortgage. To understand whether you qualify for this program, you should contact the Housing Department of the City of Allentown.
First Time Home Buyer Programs in Reading PA
The City of Reading is one of the largest cities in Pennsylvania, but it is not located in the top 5 largest counties. The City of Reading on its own does not have any first-time home buyers programs, but the Berks County has many different programs that may benefit first-time home buyers as well as current homeowners. These programs are offered by the HomeOwnership Center, which is a part of Neighborhood Housing Services of Greater Berks. In addition to the lending services, the HomeOwnership Center provides homebuyer education classes and counseling. The center provides the following resources:
- Homebuyer Education Seminars
- Individualized Pre-Purchase Counseling
- Home Inspection Requirement Guidelines
- Affordable First-Mortgage Resources
- Nhs Down Payment And Closing Cost Assistance Loans
- Information About How To Find a Realtor
- How To Buy Homeowners’ Insurance
- Rehab Assistance With Home Purchase
- Act 91 Foreclosure Intervention
- Post-Purchase Counseling
HomeOwnership Program Financing (HOP)
This program offers a unique loan product that can provide financial opportunities to the first-time home buyer. This program is available to eligible low to moderate-income households that earn up to 105% AMI. To see whether you are eligible, you should contact the HomeOwnership Center.
FHA Closing Cost Assistance Loan Program
This program provides closing costs assistance to people who are eligible for an FHA loan. This program has received approval from the HUD, which means that the lenders who issue FHA loans can assist borrowers with this program.
First Time Home Buyer Programs in Erie PA
Erie PA has one first-time home buyer program that may be useful for qualifying home buyers. This program is funded by the Erie Federal Credit Union, and it has other programs that may benefit current and future homeowners.
The First Front Door Program
This program is funded by the Erie Federal Credit Union, and it provides a grant for up to $5,000 to eligible first-time home buyers. This program looks at the borrowers on a case-by-case basis, which means that they do not have clear requirements about who is eligible for this program. If you are planning to purchase a home within the City of Erie, then you should contact an agent regarding the First Front Door Program.
Federal Programs
Federal programs are available in every state and provide different benefits to improve housing affordability. In Pennsylvania, loans insured by federally-backed agencies (FHA, VA, and USDA) are provided through the Keystone Government Loan Program (K-Gov). The loans include the FHA loan, VA loan, and USDA loan.
I. Conforming Loan
Conforming loans are always available and are privately insured. Conforming loans are insured by federally-backed associations like Fannie Mae and Freddie Mac. Since these loans can be taken off the balance sheet of the lender, lenders are more willing to offer them, compared with non-conforming (jumbo) loans. These entities have specific programs, which aim to make housing more affordable. Fannie Mae has the HomeReady program, which has a lower minimum down payment of 3%. Freddie Mac has the HomePossible program, which has low minimum down payment requirements, low mortgage rates, and no credit score requirements.
II. FHA Loan
The Federal Housing Administration (FHA) uses FHA-approved lenders to guarantee mortgages that aim to help low to moderate-income earners. These loans only require a minimum down payment of 3.5% and a minimum credit score of 500 but still have competitive FHA mortgage rates. The mortgages come as fixed and adjustable-rate loans with mortgage terms of 15 or 30 years. FHA Loans incur FHA Mortgage Insurance Premiums (MIP); you can use an FHA Loan calculator to see how this impacts your monthly payments. For more information about FHA Loans, visit the FHA Loans page.
III. VA Loan
The United States Department of Veterans Affairs (VA) uses VA-approved lenders to guarantee mortgages that aim to help certified veterans. There is no minimum credit score or minimum down payment requirement. VA Loans typically have lower VA mortgage rates and do not require mortgage insurance payments. To see the breakdown of your monthly payment for a VA Loan, use a VA Loan calculator. For more information about VA Loans, visit the VA Loans page.
IV. RD Home Loan
The United States Department of Agriculture (USDA) uses USDA-approved lenders to guarantee mortgages that aim to help home buyers in rural areas with low to moderate incomes. Rural Development (RD) areas are set by the USDA and you can use the USDA Eligibility Map to see if you qualify. There is no credit score requirement but lenders will make sure your debt-to-income ratio is less than 41%. There are multiple loan programs offered by the USDA, which you can find on the USDA Loans page.