This blog has compiled a list of assistance programs for you as a first-time home buyer in Pennsylvania. With so many programs across the country, it can be challenging to know which one has the best chance of helping you. Don’t worry though —Hanfincal is here to help! We’ve done our best to make the decision easier by showing you which programs are available and their eligibility requirements so that you’ll know what kind of help you qualify for.
1. First-Time Home Buyer Down Payment Assistance in Pennsylvania
1.1. 1st-Time Homebuyer Programs
Home buying is a very stressful experience, especially if you’re just getting started. This can be especially true if you’re a first-time home buyer in Pennsylvania, where there has been a continuous increase in home purchase prices.
If you have been thinking about researching assistance programs, but the process has left you feeling confused and frustrated, it might be time to reach a professional consultant.
1st-Time Homebuyer Programs is such a service that will navigate the best assistance program available for you in Pennsylvania. Its team of experts in housing and the up-to-date database has been helpful for many across the United States.
Start today by submitting a few pieces of your information and get your consultant instantly!
1.2. Keystone Advantage Assistance Loan Program – PHFA
This program is a second mortgage that can be utilized to pay for the down payment or closing costs on a home. It allows combination with the HFA Preferred (Lo MI), Keystone Home purchase programs, or Keystone Government Loan. Also, this program provides up to 4% of the home purchase price ( $6000 as maximum).
Here are the highlights of the Keystone Advantage Assistance Loan Program:
- Credit score is at least 660.
- A $500 minimum loan is needed.
- Your cash, bank accounts, stocks, and other liquid assets must not exceed $50,000 after closing.
- The funds must be used for a down payment or closing costs.
- The repayment period for the interest-free loan is ten years.
1.3. HOMEstead Down Payment & Closing Cost Assistance
This financial help program is only accessible in a few areas in Pennsylvania. If you live in Philadelphia and Pittsburgh, as well as seven counties, you cannot benefit from this program. If you believe you can qualify, you might want to look at the purchase price limits and income limits required by this program.
Here are the highlights of HOMEstead Down Payment & Closing Cost Assistance:
- Second mortgage of up to $10,000 in closing cost and down payment assistance with zero interest.
- Forgivable funds at 20% yearly if you own the house for a minimum of five years.
- The minimal down payment required for HOMEstead borrowers depends on who is guaranteeing or insuring the loan.
1.4. First Front Door Down Payment Assistance | FHLBank of Pittsburgh
If you’re on the lookout for first time home buyer programs Pittsburgh PA, you should opt for First Front Door. This program is accessible even if you live in any area of Pennsylvania and don’t have enough savings for a down payment. Whether you live in Erie, Allentown, or Pittsburgh, this assistance program is for you.
It provides up to $5000 in down payments and closing costs. Also, with this program, you contribute $1 and receive $3 in return.
Here are the highlights of First Front Door Down Payment Assistance:
- To qualify, you must be a first-time home buyer.
- You’ll work with a participating lender to obtain a mortgage.
- If you are a student, you must work more than 30 hours a week.
- It provides a comprehensive homeowner education you’re required to complete.
- You won’t have to repay as long as you live in the house for five years.
2. First-Time Home Buyer Loans in Pennsylvania
2.1. HFA Preferred (Lo MI)
The PHFA provides a standard house loan called the HFA Favorable Loan (Lo Mi). You don’t need to be a first-time home buyer to qualify.
Additionally, partner lenders provide this 30-year fixed mortgage. However, the provider of the lending service will still be PHFA. With some of the qualifications listed below, any first time home buyer in Pennsylvania who pays less than 20% may be qualified to participate.
Here are the highlights of HFA Preferred (Lo MI):
- Your household income must be under these limits, varying among PA counties.
- You must pay out a minimum of $1,000 (as your own money) for the down payment.
- Your credit history and ability can prove your possibility to repay.
- The home purchase serves your primary residence.
- You must finish a homebuyer training course.
2.2. Keystone Government Loan (K-Gov)
You can qualify for the Mortgage Credit Certificate or the Keystone Advantage Help loan for up to $6,000 in down payment assistance with the K-GOV loan. This isn’t only for first-time home purchasers in Pennsylvania.
Furthermore, the K-GOV option offers PHFA first home loan funding on FHA, VA, and USDA loans. Aside from the requirements for government-backed loans, the PHFA imposes no extra requirements. Besides, working with PHFA to obtain an FHA loan may benefit Pennsylvania first-time home buyers by providing down payment assistance and tax credits.
2.3. Keystone Home Loan (KHL)
This PHFA loan option is primarily intended for first-time home buyers. Nevertheless, those who are not first-time buyers may be eligible if they are discharged US veterans or purchase in a Targeted Area.
Here are the highlights of Keystone Home Loan (KHL):
- Income limits and home price limits vary among counties.
- If you put less than 20% down, mortgage insurance is a must.
- Down payment ranges from 0% to 5%.
2.4. Mortgage Credit Certificate
Mortgage Credit Certificate (MCC) provides a tax credit that decreases your federal tax burden by up to $2,000 each year for the duration of your mortgage. We can tell that it is one of the most effective first time home buyer programs in PA. With a bad credit score, you may also be able to qualify for this program.
Also, the credit is worth 20% to 50% of your annual mortgage interest. It is determined by your original loan amount:
- 50% credit: loan of up to $100,000
- 40% credit: loan of $100,001 to $150,000
- 30% credit: loan of $150,001 to $200,000
- 20% credit: loan of $200,001+
There are purchasing and income criteria for this program. To qualify, you must be a first-time buyer.
Additionally, with a Keystone Government or HFA Preferred (Lo MI) mortgage, you can qualify for the MCC. Also, It can be paired with the Keystone Advantage Assistance loan but not with the Keystone Home Loan program.
3. First-Time Homebuyer In Pennsylvania Stats for 2022
Pennsylvania’s median sales price for homes shows a 10% increase from the previous year. According to the Pennsylvania Association of Realtors, an average home in Pennsylvania cost $197,790 in 2022.
- Average Home Sale Price in PA: $197,790
- Minimum Down Payment in PA (3%): $5,930
- Average Credit Score in PA2: 723
- 20% Down Payment in PA: $39,560
- Maximum PA Home Buyer Grant: Forgivable loan of 5% of the home’s value with no top dollar limit (PFHA Keystone)
The most recent average house sale price for the state is used to calculate down payment requirements. Besides, a standard mortgage with a “minimum” credit score of 620 requires a 3% down payment. You might not need any down payment if you qualify for a VA loan or a USDA loan.
The programs listed above represent a wide range of assistance options for you as a first time home buyer in Pennsylvania, yet they are not just limited to first-time home buyers. Some of these programs may also be available to buyers in other states, so you may want to keep them in mind if you’re planning on buying a new home in the near future. Hanfincal hopes this article has been helpful.