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Pennsylvania First-Time Home Buyer Programs

Updated Dec 14, 2020   |   8 mins read

Buying your first home can be an expensive (not to mention, daunting) task. From the down payment and closing costs to the insurance premiums and monthly mortgage payments, real estate expenses can add up fast—leaving many Pennsylvania first-time home buyers stressed, overwhelmed, and just a little bit worried.

Fortunately, there are a number of first-time home buyer programs in PA and beyond that can help minimize this financial stress and help you more easily afford a new home. Want to learn more? This guide will walk you through your options.

In this guide:

Pennsylvania First-Time Home Buyer Programs

First-time homebuyer programs in PA are offered by the Pennsylvania Housing Finance Agency, also known as the PHFA. The PHFA aims to make homeownership (and housing in general) more affordable for Pennsylvania residents. 


  • Help with down payments and closing costs
  • Reliable monthly payments via 30-year, fixed-rate loans
  • Special terms for veterans and borrowers with disabilities
  • Additional assistance available through certain area employers
  • Tax credits may be available

HFA PreferredTM (Lo MI)

If you don’t have a 20% down payment, the HFA Preferred (Lo Mi) mortgage loan can help you minimize the private mortgage insurance costs you’ll have to pay as a result. These loans can be used to finance or refinance a Pennsylvania property and are not limited to just first-time homebuyers.


  • You must fall under the household income limits for your county. These are $113,500 for Bucks, Chester, Delaware, Montgomery, and Philadelphia counties; and $95,620 for all other counties.
  • The property must be your primary residence.
  • You must put down at least $1,000 of your own funds.
  • You must complete a HUD-approved homebuyer education course if you’re purchasing a home. 
  • The property must be a single-unit home. 
  • You have sufficient funds to cover your mortgage application fee, closing costs, and down payment.

Keystone Home Loan Program

The Keystone Home Loan Program offers conventional, FHA, USDA, and VA loans with reduced interest rates for eligible buyers. Both first-time and experienced buyers are eligible, though experienced buyers must be purchasing a property in designated areas of the state. One- and two-unit properties are allowed.


  • Your income and the purchase price of your home must fall under the limits for your county. 
  • If you’re not a first-time buyer, you will need to purchase a home in a “targeted” county, marked with a “T” on this list.
  • You have sufficient funds to cover your mortgage application fee, closing costs, and down payment. Note: Putting down less than 20% will require private mortgage insurance (PMI) on some loans.
  • You meet the credit score requirements for your desired loan. Most mortgage lenders require a FICO score of at least 620 for conventional, VA, and USDA loans, and a score of 500 to 580 for FHA loans. 

Keystone Government Loan Program

The Keystone Government Loan Program, also called K-Gov, allows you to leverage low-cost, government-backed mortgage options, including FHA, USDA, and VA loans. Utilizing these loans can minimize the down payment you’ll need to pay. FHA loans require just a 3.5% down payment, while VA and USDA loans require no down payment at all. The Keystone program is open to both first-time and repeat homebuyers.


  • There are no purchase price or income limits, though there may be loan limitations depending on where you live and the loan type you’re using.
  • You meet the credit score requirements for your desired loan. Most participating lenders require at least a 620 for conventional, VA, and USDA loans, and a 500 to 580 for FHA loans. 
  • You have sufficient funds to cover your mortgage application fee, closing costs, and down payment. 

Keystone Advantage Assistance Loan Program

This program offers up to 4% of your home’s purchase price to be used toward your down payment and/or closing costs. The maximum benefit is $6,000, and the funds are provided via a no-interest, second mortgage loan, which must be repaid monthly over the course of 10 years.


  • These can be used with HFA Preferred, Keystone Home Loans, and Keystone Government Loans. 
  • You must have a credit score of 660.
  • Your liquid assets must not exceed $50,000.

Mortgage Tax Credit Certificate

A Mortgage Credit Certificate allows you to claim a dollar-for-dollar tax credit based on your paid mortgage interest every year. The maximum benefit is $2,000 and can be used in conjunction with HFA Preferred or Keystone Government Loans, as well as with the Keystone Advantage Assistance program.


Programs for Persons with Disabilities

Buyers who are disabled or have a disabled household member may be eligible for down payment, closing cost, and home modification assistance through the PHFA’s Access programs.

Eligible buyers can get up to $15,000 in down payment and closing cost help and up to $10,000 toward home modifications. These must be used in conjunction with one of PHFA’s Keystone loans.


  • You or a household member has a permanent disability.
  • You’re using a Keystone Home or Government Loan.
  • Your annual household income does not exceed 80% of the median income for the state.
  • You’re not using other closing cost or down payment assistance programs.

HOMEstead Downpayment and Closing Cost Assistance

The HOMEstead program offers between $1,000 and $10,000 toward your down payment and closing costs. The funds are provided via a no-interest, second loan, which is forgiven if you live in the home for at least five years.


  • You must pay the minimum portion of your down payment, as required by the loan type you’ve chosen. 
  • You must meet certain income and purchase price limits.
  • The home must meet federal property guidelines.

Employer Assisted Housing (EAH)

The PHFA has partnered with various employers across the state to ease home buying costs for eligible workers. Pennsylvania buyers who work for a participating employer can receive up to $8,000 in closing cost and down payment assistance via a zero-interest loan paid across 10 years.


  • You must work for a participating EAH employer.
  • You must meet be eligible for the Keystone Advantage Assistance program.

Federal First-Time Home Buyer Programs

Though Pennsylvania has its fair share of first-time buyer programs, there are also national loan programs you can utilize, too. If you qualify, they could mean lower interest rates, fewer up-front closing costs, and a smaller down payment.

>> Read More: Best Mortgage Lenders for First-Time Buyers

FHA Loans

FHA loans are mortgages that are backed by the Federal Housing Administration. They’re ideal for first-time homebuyers and buyers with low to moderate incomes. They have low credit score requirements and have a low down payment requirement of just 3.5%.

>> Read More: Best FHA Loans: Get Help Buying Your First Home

VA Loans

VA loans are backed by the Department of Veterans Affairs and are available to veterans and active military members. They require no down payment, limit the amount of closing costs you pay, and come with competitive interest rates.

>> Read More: Best VA Lenders: 0% Down Payments for Veterans

NADL Loans

Native American Direct Loans are mortgages designed for Native American veterans. Guaranteed by the VA, they require no down payment, no mortgage insurance, and offer low interest rates. They can be used to purchase, build, or renovate a property on designated Federal Trust Land.

USDA Loans

USDA loans are mortgages that are guaranteed by the U.S. Department of Agriculture and are intended for use on properties in rural areas. They require no down payment and come with competitive interest rates. They’re best for buyers with a low to moderate income who are willing to buy in more remote parts of the country.

The Good Neighbor Next Door Program

This assistance program is designed for public servants, including police officers, educators, EMTs, and firefighters. It offers a 50% discount on single-family homes located in certain parts of the state. Eligible Pennsylvania properties can be found at

Fannie Mae or Freddie Mac Loans

Also called conventional loans, mortgages from Fannie Mae and Freddie Mac are for buyers with good credit. They typically require at least a 620 credit score and a 3% down payment. If you’re unable to make a 20% down payment, you’ll need to pay for private mortgage insurance until the loan-to-value ratio on your home reaches 80%.

Bottom Line: You Can Find Down Payment Assistance In PA

If you’re worried about affording your down payment or any other costs associated with buying a home, you have options. Both the state of Pennsylvania and the federal government have assistance programs that can help.

>> Read More: Current Pennsylvania Mortgage Rates