Pennsylvania First-Time Home Buyer Programs of 2023

The Pennsylvania Housing Finance Agency (PHFA) 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

The following programs are specifically tailored to Pennsylvania residents. While each program has its own qualifying standards, a PHFA-approved lender can help you navigate the details.

» MORE: Tips for first-time home buyers

Highlights

• Down payment and closing cost assistance.

• Programs for borrowers or household members with disabilities.

• Programs for purchase and refinancing.

• Employer-assisted housing benefits available through participating employers.

Eligibility

• 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).

• 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.

PHFA first-time home buyer loan programs

Keep in mind, the lender you work with may have borrower requirements on top of 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.

You can find Pennsylvania lenders that participate in PHFA programs.

HFA Preferred (Lo MI)

Best for:

Help with mortgage insurance

What you need to know:

This program helps borrowers who put down less than 20% find lower mortgage insurance premiums. There is no first-time buyer restriction for this program.

Keystone Government Loan

Best for:

Help in securing government-backed loans

What you need to know:

If you do decide to go the government-loan route, the PHFA offers mortgages backed by the Federal Housing Administration (FHA), the USDA Rural Development program and the Department of Veterans Affairs (VA). There may be fewer conditions to meet to qualify for the program; however, government loans have their own specific benefits and limitations that vary by provider.

Keystone Home Loan Program

Best for:

First-time buyers and discharged service members

What you need to know:

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 Flex with K-FIT

Best for:

Several loan options with cash assistance that isn’t paid back

What you need to know:

FIT in this program stands for "Forgivable In Ten Years," and it’s a second mortgage that can be used for closing costs and down payment for a home purchase when paired with a conventional loan or one of several government-backed mortgages. The loan is forgiven at a rate of 10% over 10 years.

Keystone Flex-Purchase & Improvement with K-FIT

Best for:

Conventional loan and home improvement with cash assistance that isn’t paid back

What you need to know:

Also forgivable in 10 years, the second mortgage in this program provides closing cost and down payment assistance for a home purchase and up to $30,000 for improvements when paired with a conventional mortgage. Homes allowed in the program include single-family residences, duplexes, manufactured housing and others. The loan is forgiven at a rate of 10% over 10 years.

Keystone Advantage Assistance Loan Program

Best for:

Low-interest loan repaid over time

What you need to know:

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.

PHFA Grant

Best for:

Cash assistance that isn’t repaid

What you need to know:

The PHFA Grant offers $500 to be used for down payment and closing costs for a home purchase when combined with a loan from the HFA Preferred (Lo MI) program. The grant doesn't have to be repaid and can be used with the Keystone Advantage Assistance Loan Program.

HOMEstead Downpayment and Closing Cost Assistance Loan

Best for:

Cash assistance in certain areas

What you need to know:

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.

Programs for Persons With Disabilities

Best for:

No-interest loan for home buyers with a disability

What you need to know:

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.

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

Additionally, borrowers may receive a zero-interest loan of up to $10,000 to cover modifications through the PHFA's Access Home Modification Program. No payments are required while the home is your primary residence.

» MORE: The best homeowners insurance in Pennsylvania

Employer-Assisted Housing Initiative

Best for:

Buying yourself back time to repay an interest-backed low-interest loan

What you need to know:

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.

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

» MORE: Pennsylvania lenders that participate in PHFA programs

First-time home buyer programs near Pennsylvania

• Delaware first-time home buyer programs.

• Maryland first-time home buyer programs.

• New Jersey first-time home buyer programs.

• New York first-time home buyer programs.

• Ohio first-time home buyer programs.

• West Virginia first-time home buyer programs.