Guide to Pennsylvania First-Time Home Buyer Programs

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The state of Pennsylvania offers first-time homebuyers special benefits to help them become homeowners. The assistance includes down payment assistance and closing cost assistance, making it more affordable for first-time homebuyers to own a home.

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If you need closing cost or down payment assistance, the Keystone Advantage Assistance Loan Program may help. As the name suggests, it’s a mortgage, but it’s a second mortgage. You can receive the lesser of up to 4% of the purchase price of the home or $6,000. The loan is amortized over 10 years with no interest charged.

In order to be eligible for the Keystone program, you must:

  • Have at least a 660 credit score
  • Not have liquid assets that exceed $50,000 after paying the closing costs

You can use the closing cost/down payment assistance program along with any of the first-time homebuyer mortgage programs.


You can choose from any of the following loan programs to finance the home purchase:

  • Preferred Risk Sharing – This loan doesn’t require mortgage insurance even if you put less than 20% down on the home. Rather than mortgage insurance, you’ll pay a slightly higher interest rate.
  • Preferred (LO MI) – This loan does include mortgage insurance, but it’s lower than your conventional loans. Your lender can help you find the most affordable premium.

In order to qualify for either program, you must:

  • Meet the PHFA income guidelines
  • Buy a primary residence
  • Put down at least $1,000 of your own money
  • Have a housing ration less than or equal to 30%
  • Undergo housing counseling

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  • 640 credit score
  • No down payment
  • 29% maximum housing ratio
  • 41% maximum total debt ratio
  • Stable income/employment
  • Total household income must not exceed the limits for the area
  • Purchase a home in a rural area


  • 580 credit score
  • 5% down payment (can be from an alternate source)
  • 31% housing ratio
  • 41% total debt ratio
  • Stable income/employment


  • 620 credit score
  • No down payment
  • No maximum housing ratio
  • 43% total debt ratio
  • Stable income/employment
  • Eligibility for the VA program


You can also choose from loans backed by the FHA, VA, or USDA. The guidelines you must follow are those that any borrower must follow that gets an FHA, VA, or USDA loan. You must follow the standard down payment and qualifying guidelines, which are as follows.


Borrowers with a disability can use any of the above loan programs. They are also eligible for a loan with no interest for up to $15,000 to make changes to the home to make it accessible. The loan has no interest, down payment, or closing cost requirements. First-time homebuyers (disabled) may also receive another $10,000 Homestead down payment loan. This loan is forgivable at 20% per year over a 5-year term. This assistance is only available in certain counties.

If you are interested in any of the PHFA programs, you must find a PHFA approved lender. They can walk you through the programs and put you in contact with the right agency to help you with counseling or additional resources to help you as a first-time homebuyer.

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