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Pennsylvania First-Time Home Buyer Programs of 2018

Finding the Right Mortgage, Mortgages
Pennsylvania First-Time Home Buyer Programs
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The Pennsylvania Housing Finance Agency offers down payment and closing cost assistance to first-time home buyers in the Keystone State. The PHFA also provides mortgage loan programs, refinancing and home-improvement loans.

To be considered a first-time home buyer, you must not have owned your primary residence during the past three years. Veterans or buyers in certain target counties don’t have to meet first-time home buyer restrictions to take advantage of PHFA programs.

PHFA highlights and eligibility requirements


  • Down payment and closing cost assistance
  • Programs for borrowers with disabilities
  • Tax credits may apply
  • Programs for purchase and refinancing
  • 30-year fixed-interest loans
  • Employer-assisted housing available through participating employers


  • Borrowers’ liquid assets, including investment accounts, must be no greater than $50,000 after payment of closing costs (retirement accounts may be excluded with certain restrictions)
  • You should plan to use no more than 30% of your income to make your monthly payment
  • Household income and purchase price cannot exceed county limits
  • The home must be your primary residence
  • Minimum credit score of 660 for some programs
  • Borrowers with FICO scores lower than 680 must complete home buyer education

» MORE: 25 tips for first-time home buyers

Pennsylvania home buyer assistance programs

HFA Preferred Risk Sharing

This program eliminates the typical requirement that borrowers who put down less than 20% must pay mortgage insurance premiums. Your monthly mortgage payment is usually lower, though your loan’s interest rate may be slightly higher. There is no first-time buyer restriction for this program.

HFA Preferred

This loan includes mortgage insurance for borrowers with less than 20% down. There is no first-time buyer restriction for this program.

Keystone Government Loan Program

If you do decide to go the government-loan route, the PHFA offers mortgages backed by the Federal Housing Administration, the Rural Development program of the USDA, and the Department of Veterans Affairs. There may be fewer conditions to meet to qualify for the program compared to the Keystone Home Loan Program, which is covered next. However, government loans have their own specific benefits and limitations that vary by provider.

Keystone Home Loan Program

This program is suited for first-time home buyers, discharged veterans of the Armed Forces or buyers interested in properties in certain targeted Pennsylvania counties. The loans can be conventional, FHA- or VA-backed mortgages, or rural development loans. Purchase price and income limits apply.

Keystone Advantage Assistance Loan Program

This is a second mortgage loan that helps with the down payment and closing costs. Qualified borrowers can receive up to 4% of the purchase price or market value of the home or $6,000, whichever is less. Repayment of the cash assistance is calculated over a 10-year period with 0% interest.

Mortgage Credit Certificate

A mortgage credit certificate is available for eligible buyers that allows a tax credit of 20% to 50% of the mortgage interest you pay annually, up to $2,000. A tax credit is a dollar-for-dollar discount applied to the federal taxes you owe. As long as you own and occupy the home as your primary residence, you can use the tax credit each year for the life of the loan.

Programs for Persons with Disabilities

Home buyers with a disability or who are living with a household member with a disability may qualify for up to $15,000 in a no-interest down payment and closing costs loan to make accessibility modifications to the home they’re purchasing.

First-time buyers with disability qualifications may also be eligible for an additional $10,000 loan at 0% interest, as a part of the Homestead program noted below. Income and property limitations, including the home’s location, may apply.

Homestead Down Payment and Closing Cost Assistance

Eligible buyers may be able to receive up to $10,000 in assistance in the form of a forgivable loan. Homestead assistance is forgiven at a rate of 20% per year over five years. The program is available in certain areas of Pennsylvania, but it excludes most major cities and seven counties, which offer their own federally sponsored assistance.

Employer Assisted Housing

You may work for a company that participates in this initiative. Participating employers — which include banks, health systems, universities and others — offer home buyer assistance of up to $8,000. The benefit is structured as a 10-year, interest-free loan.

Your next step

Keep in mind, the lender you work with may have additional borrower requirements than those stated in any state assistance program. That can include credit score minimums or other credit qualifications. Find out all you can about the programs you’re interested in, then talk to a few lenders about your options.

For full details on any Pennsylvania Housing Finance Agency program, visit the PHFA website.

You also can find Pennsylvania lenders who participate in PHFA programs.

National first-time home buyer programs to consider

The PHFA offers a lot of loan and down payment assistance programs, but you also have additional resources to consider. There are national programs aimed at low-to-moderate income prospective homeowners, with low — and even no — down payment requirements.

FHA-backed loans allow down payments as low as 3.5% and cater to borrowers with lower credit scores. Not all lenders offer FHA loans, so be sure to shop around.

» MORE: Learn about FHA loan requirements

VA loans are a benefit offered to military veterans and active-duty service members. These popular mortgages require no down payment.

USDA mortgages are part of a rural development package to spur homeownership in small communities. It’s another no-down-payment option. And no, you don’t have to have an agricultural business affiliation.

Conventional loans with more relaxed borrowing standards for first-time buyers are now available. Down payments can be as low as 3%.

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