First-Time Home Buyer Programs in Pennsylvania

Pennsylvania Housing Finance Agency (PHFA) Programs:

PHFA Keystone Home Loan:

Eligibility: Targets first-time homebuyers (no homeownership in the past three years) or buyers in targeted areas; exceptions for veterans or those in certain counties.
Offerings: Provides a 30-year fixed-rate mortgage (FHA, VA, USDA, or conventional) with competitive rates; can be paired with down payment assistance.
Requirements:

• Income must not exceed county-specific limits (e.g., $126,500 for a 1-2 person household in Allegheny County as of 2025).
• Minimum credit score of 620 (varies by loan type).
• Debt-to-income ratio capped at 45% (50% with compensating factors).
• Homebuyer education course required.
• Purchase price limit of $349,525 (non-targeted areas) or $427,198 (targeted areas).

Keystone Advantage Assistance Loan:

Benefits: Offers up to 4% of the purchase price or $6,000 (whichever is less) as a 0% interest second loan (repayable over 10 years) for down payment and closing costs; available with PHFA mortgages.
Eligibility: Must use a PHFA first mortgage; income and purchase price limits apply (same as Keystone Home Loan).

HOMEstead Downpayment and Closing Cost Assistance:

Description: Provides up to $10,000 as a 0% interest second loan (forgivable after 5 years if home remains owner-occupied) for first-time buyers in specific counties.
Requirements: Income capped at 80% AMI (e.g., $66,750 in Lancaster County for a family of four); must pair with a PHFA mortgage; limited to designated areas.

Local Programs:

Philadelphia

Philly First Home: Offers up to $10,000 as a non-repayable grant for down payment and closing costs; income must be at or below 120% AMI (e.g., $103,200 for a family of four); homebuyer counseling required.

Pittsburgh

Pittsburgh Down Payment Assistance: Provides up to $15,000 as a deferred loan (0% interest, due upon sale) for down payment and closing costs; income capped at 80% AMI; targets revitalization areas.

Harrisburg

Harrisburg First-Time Homebuyer Program: Offers up to $12,000 as a 0% interest deferred loan (repayable upon sale) for down payment and closing costs; income must be below 80% AMI.

Additional Information:

• Mortgage Credit Certificate (MCC): Provides a federal tax credit of up to 50% of annual mortgage interest (max $2,000 yearly) for first-time buyers; fee applies; combinable with PHFA loans.
• FHA Loans: Minimum 3.5% down payment, suitable for credit scores as low as 580 (10% if below 580).
• USDA Loans: Zero-down payment for rural Pennsylvania areas; income limits apply.
• VA Loans: Zero-down payment for eligible veterans or active military.