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Pennsylvania First-Time Homebuyer Programs

Written by: Jody Adams
Last updated: January 31, 2024

Buying a new home is an exciting venture, but it can also be quite an investment. If you plan to purchase your first property in Pennsylvania, you may get a helping hand from statewide and local first-time home-buying programs.

These assistance programs offer various modes of financial support to help families or individuals work toward the purchase price. However, with different monthly payments and payment requirements, lenders have various eligibility requirements, so you must research carefully.

In this article, learn more about first-time home buyer grants PA, as well as loan programs that are worth considering.

How First-Time Home Buyer Grants PA Work

How First-Time Home Buyer Grants PA Work

First-time homebuyer grants offer opportunities to gain homeownership, especially for buyers who need extra support toward paying for their first house. These grants vary in their guidelines and application process, but they have some essential similarities.

Here are some steps you may expect to take when you apply for a first-time homebuyer grant PA:

1. Review Grant Requirements

All first-time homebuyer grants come with a specific set of eligibility criteria. Some of these requirements include homeownership status, income levels, annual household income, and household income limits. Before you begin any application, make sure you confirm the program requirements so that you won't waste time and resources.

2. Find A Home In An Eligible City

Homebuyers should also consider the location of the house they are planning to buy. For statewide mortgage programs, you should ensure that the house you aim to buy is located in the cities, communities, or counties listed in the grant.

3. Meet The Ownership Restrictions

For most home purchase assistance programs, there is a length of ownership requirement. This means that you have to stay in the house for a specific amount of time in order to gain the financial benefit of the program. The moment that you decide to refinance or sell your home, you may be required by the mortgage lenders or grantors to repay the aid you received.

4. Undergo Homeownership Education

Finally, you must enroll in a homeownership education course to qualify for financial support. This counseling ensures that you know the proper way to handle the responsibilities of homeownership and the ins and outs of monthly mortgage payments.

First-Time Home Buyer Programs PA

The Pennsylvania Housing Finance Agency (PHFA) allows qualified homebuyers to connect with mortgage lenders and brokers and acquire a mortgage loan with competitive interest rates and low fees. Here are some of the 30-year, fixed-rate mortgages worth considering:

HFA Preferred Loan

The HFA Preferred Loan helps home buyers with small down payments access lower-cost private mortgage insurance. This program is open to all home buyers in Pennsylvania who are purchasing or refinancing a single-unit house. However, to qualify for this program, the buyer must contribute at least $1,000 toward the down payment and take a homebuyer education course.

Keystone Home Loan Program

The Keystone Home Loan Program is open to first-time home buyers, veterans, and homebuyers in certain counties in Pennsylvania. It provides funding for conventional mortgages, USDA loans, VA loans, or FHA loans. However, you should verify whether the loan meets the purchase price limits.

Keystone Government Loan (K-Gov)

The Keystone Government Loan (K-Gov) is a government-backed loan program based on FHA, VA, or USDA financing. The difference between this loan program over the Keystone Home Loan Program is that there are no requirements for first-time home buyers, no sale price limitations, and no income requirements. This assistance program allows a second mortgage up to $6,000 for a down payment or closing cost assistance.

First-Time Home Buyer Grants PA

Pennsylvania residents have grants that help them find the best mortgage rates, down payment assistance solutions, and manageable closing costs. Here are some of the programs monitored by the PA Housing Finance Agency:

Keystone Forgivable In Ten Years Loan Program (K-FIT)

K-FIT is a forgivable loan that offers a second loan with a forgivable rate of 10% over ten years. With K-FIT, 10% of the loan is forgiven each year. So, if you move after the first year, you must pay back 90% of the borrowed sum. However, you'll owe nothing if you're still in primary residence after the tenth year.

In this program, a homebuyer can borrow up to 5% of the home's market or appraised value, assuming they meet the terms. The requirements are a FICO score of 660 and less than $50,000 in liquid assets.

Keystone Advantage Assistance Loan Program

The Keystone Advantage Assistance Loan Program allows a zero-interest loan which the homebuyer must pay within ten years. Eligible borrowers can borrow up to 4% of the house's market or appraised value, whichever is lower, or up to $6,000.

HOMEstead Down Payment And Closing Cost Assistance Loan

First-time homebuyers in Pennsylvania may also consider applying for a HOMEstead Down Payment and Closing Cost Assistance Loan. This program allows qualified borrowers to borrow up to $10,000 in a zero-interest loan.

Similar to K-FIT, this program forgives year-by-year; however, the loan balance drops 20% each year even though you make no loan payments. If you still own the home as your primary residence after five years, you will no longer be required to make a payment.

Frequently Asked Questions:

What are some popular first-time homebuyer programs available in Pennsylvania?

Pennsylvania offers several first-time homebuyer programs to help individuals and families purchase their first homes. Some popular programs include the Pennsylvania Housing Finance Agency (PHFA) Keystone Home Loan Program, the Keystone Advantage Assistance Loan Program, and the HOMEstead Downpayment and Closing Cost Assistance Loan Program.

What benefits do these Pennsylvania first-time homebuyer programs offer?

These programs offer a variety of benefits for first-time homebuyers in Pennsylvania, such as competitive interest rates, down payment and closing cost assistance, affordable housing options, and reduced mortgage insurance premiums. They are designed to make homeownership more accessible and affordable for eligible buyers by providing financial support and resources.

How can I apply for a first-time homebuyer program in Pennsylvania?

To apply for a first-time homebuyer program in Pennsylvania, start by researching the eligibility requirements and benefits of each program. Next, gather the necessary documentation, such as proof of median income, credit history, and tax records. Contact a participating lender, who will guide you through the application process and help you determine which type of loan is the best fit for your financial situation. Be prepared to attend a homebuyer education course, as many programs require this as part of the application process.

Move Into Your First Home Today!

Buying your first house can be possible through the homebuyer assistance grant programs offered by the federal and state governments. If you find that you qualify for first-time home buyer grants PA, you should make the most of the opportunity and start your application.

If you want to learn more about how to find landlords that accept housing vouchers, check out this article from Gov Relations today!

Jody Adams
Jody Adams is an accomplished editor-in-chief with a deep understanding of social care and government benefits issues. With a background in journalism and a master's degree in Public Policy, Jody has spent her career shaping the narrative around social policies and their impact on society. She has worked with renowned publications, effectively bridging the gap between complex policy analysis and public understanding. Jody's editorial expertise ensures that vital information on social care and government benefits reaches a broad audience, empowering individuals to make informed decisions.

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