Down Payment Assistance And Mortgage Programs In Pennsylvania - First Time Buyers

If you are a low to moderate income individual or family looking to buy a home in Pennsylvania, the Pennsylvania Housing Finance Agency (PHFA) may have some home purchase mortgage and down payment and closing costs assistance programs to fit your needs.

All mortgages associated with the PHFA’s homebuyer programs are obtained through PHFA approved and participating lenders. Any homebuyer seeking to utilize a PHFA homebuyer program must apply for the program along with their mortgage application at a participating lender.

First Time Home Buyer And Other Mortgage Loan Programs In Pennsylvania

• Keystone Home Loan – The Keystone Home Loan program is a low interest 30 year mortgage available to first time homebuyers and second time homebuyers who have sufficient funds for Downpayment and closing costs.
  
  All homebuyers using this program must meet certain income and home purchase criteria depending on whether the home they are buying is located in a targeted area or a non targeted area. (see below for What is a Targeted Area?)
  
  
  The Keystone Home Loan program has six basic qualifications that a homebuyer must meet to be eligible for the program:
  
  
  1. Are you a First time home buyer buying a home in a targeted or non-targeted area? Or, are you are buying a home in a targeted area?
  
  
  
  2. Does your income fall under the fall under the prescribed area median family income limit for the size of your household per the area where the home that you want to buy is located?
  
  
  
  3. Does the home price that you are purchasing fall under the home price limits for the area (targeted or non-targeted) where the home is located?
  
  
  
  4. You qualify for an FHA, VA, RHS, or Conventional loan with Fannie Mae and Freddie Mac.
  
  
  
  5. Do you have sufficient funds to cover your own closing costs without needing assistance?
  
  
  
  6. Do you have sufficient funds to cover the down payment requirements of the mortgage program you are using?


• Keystone Home Loan Plus – The Keystone Home Loan Plus program is limited to First Time Home Buyers who plan to occupy the home they are purchasing for at least one year. The 6 qualification criteria for the Keystone Home Loan Program from above apply for applicants of the Plus program. Income limits and home purchase limits are lower for this program than the Keystone Home Loan Program.
  
  Additionally, applicants to the Home Loan Plus program cannot have household liquid assets greater than $5,000 after funds have been deducted for closing costs and down payment requirements of the mortgage loan program that the homebuyer is getting. Funds from retirement accounts such as 401(k)s, IRAs, and pension funds will only be considered if they can be withdrawn without a penalty due to borrower meeting age requirement and/or being retired.
  
  If you have a FICO Credit Score of less than 660 you will be required to complete a homebuyer education course prior to closing your loan and your home purchase. First time home buyers with credit scores higher than 660 are not required to attend a homebuyer education course, but PHFA strongly recommends it.



• Purchase Improvement Loan - PHFA's Purchase Improvement loan allows homebuyers using a Keystone Home Loan or a Keystone Home Loan PLUS to purchase and improve/repair a home with one mortgage. Eligible buyers may include between $1,000 and $15,000 for repairs and/or improvements in the loan amount. This loan amount increase is provided as long as an appraisal reflecting the proposed improvements will support a higher home value respective to the loan amount increase.

Downpayment And Closing Cost Assistance Programs In Pennsylvania

• Keystone PLUS Assistance Program – Homebuyers using the Keystone Home Loan Plus program to purchase a home may be eligible for the Keystone Plus Assistance Program. This program provides a zero-interest loan of up to $2,000 in assistance to be applied to costs associated with buying a home.



• Downpayment and Closing Cost Assistance Loan (HOMEstead Program) – The HOMEstead Program provides up to $14,999 in Downpayment and closing cost assistance to eligible homebuyers using either the Keystone Home Loan Program or the Home Loan Plus Program.
  
  Interest rates for the program are based on the interest rates for the Home Loan Plus Program. A homebuyer using this program will have to provide a minimum of $1,000 up to 3% of the purchase price of their own money. The funds for this loan are completely forgivable after a homeowner lives in the property for more than 5 years.



• Programs For People With Disabilities – For buyers with a disability or who have a disabled household member PHFA has several programs that enhance the availability of money for Downpayment and closing cost assistance. PHFA also provides a program for homebuyers using a disability home buying program to allow the homebuyer to get money for making property modifications if necessary to enhance the lifestyle and living needs of the disabled person.
  
  These program names are: Access Downpayment and Closing Cost Assistance Program, Access Home Modification Program. Check with PHFA or a participating lender for more information on these programs.

What Is A Targeted Area?