Pennsylvania First-Time Home Buyer Programs

The future looks bright for first time home buyers in Pennsylvania in 2025 because there are attractive offers for down-payment assistance, home buying grants and affordable housing.

Today, the Pennsylvania housing market continues to challenge first-time home buyers with a median home sale price of $275,000 and an average down payment of approximately $38,062 for new house buyers.

Despite rising prices, particularly in metro areas like Philadelphia (5.64% year-over-year increase) and Pittsburgh (5.87% increase), Pennsylvania offers a robust array of first-time home buyer programs to make homeownership more accessible.

These programs provide PA home buyer grants, competitive home loan rates, and tax credits to ease the financial burden and are administered primarily by the Pennsylvania Housing Finance Agency (PHFA) and supplemented by local initiatives,

We published this guide so Pennsylvania first time home buyers could secure the top state and local down-payment assistance and programs available in 2025, with detailed eligibility criteria, official reference links, and two case studies illustrating their real-world impact.

First-Time Home Buyer Programs in Pennsylvania Perspective

Pennsylvania defines a first-time home buyer as someone who hasn’t owned a principal residence in the past three years. Veterans and buyers in designated target areas may also qualify for certain programs without meeting this requirement.

The PHFA oversees most statewide programs, offering fixed-rate home mortgages, down payment assistance, and accessibility modification loans.

Local programs, often funded by federal Community Development Block Grants or county resources, provide additional support tailored to regional needs.

These PA first time buyer programs typically target low- to moderate-income households and require homebuyer education to ensure long-term success.

Statewide PA Down Payment Assistance Programs

1. Keystone Home Loan Program

The Keystone Home Loan Program, offered by the PHFA, provides 30-year fixed-rate mortgages (conventional, FHA, VA, or USDA) for first-time home buyers, veterans, or those purchasing in targeted counties. It includes low-cost mortgage insurance for down payments below 20% and can be paired with down payment assistance programs. In 2024, this program supported over 3,000 home purchases statewide.

Eligibility:

• Must be a first-time home buyer, veteran, or purchasing in a targeted area.

• Household income and purchase price limits vary by county (e.g., $126,400 income limit for a family of four in Allegheny County).

• Minimum credit score of 660 for loans insured by the Pennsylvania Housing Insurance Fund (PHIF).

• Minimum down payment of 3%–5% for conventional loans, 3.5% for FHA loans.

• Homebuyer education required for credit scores below 680.

Link: Keystone Home Loan Program

2. Keystone Advantage Assistance Loan Program

This program provides up to 4% of the home’s purchase price or appraised value (maximum $6,000) as a zero-interest second mortgage to cover down payment or closing costs. The loan is repaid monthly over 10 years and can be combined with PHFA’s Keystone Home Loan, HFA Preferred, or Keystone Government Loan programs.

Eligibility:

• Must qualify for a PHFA first mortgage program.

• Minimum credit score of 660.

• Liquid assets cannot exceed $50,000 after closing costs.

• Home must be a primary residence.

• Homebuyer education required.

Link: Keystone Advantage Assistance Loan

3. Keystone Forgivable in Ten Years Loan Program (K-FIT)

The K-FIT program offers up to 5% of the purchase price or appraised value (no maximum dollar limit) as a second mortgage for down payment and closing costs. The loan is forgiven at 10% per year over 10 years, provided the buyer remains in the home. It can be used with the Keystone Home Loan, FHA, VA, or USDA loans but not with other PHFA assistance programs except the Access Home Modification Loan.

Eligibility:

• Must qualify for a PHFA first mortgage program.

• Minimum credit score of 660.

• Liquid assets cannot exceed $50,000 after closing costs.

• Home must be a primary residence in Pennsylvania.

• Homebuyer education required.

Link: Keystone Forgivable in Ten Years Loan

4. ACCESS Down Payment and Closing Cost Assistance Loan

Designed for buyers with disabilities or those living with a disabled household member, this program provides up to $15,000 as a no-interest second mortgage for down payment and closing costs. It can be combined with PHFA’s first mortgage programs and the Access Home Modification Loan.

Eligibility:

• Must qualify for a PHFA first mortgage program.

• Buyer or household member must have a disability.

• Minimum credit score of 660.

• Home must be a primary residence.

• Homebuyer education may be required.

5. HOMEstead Down Payment and Closing Cost Assistance Loan

The HOMEstead program, funded through the federal HOME Investment Partnerships Program, offers up to $10,000 in down payment and closing cost assistance as a no-interest second mortgage, forgiven over five years if the buyer remains in the home. It is available in select counties and administered by local agencies.

Eligibility:

• Must be a first-time home buyer or purchasing in a targeted area.

• Income must be at or below 80% of the area median income (AMI).

• Home must be a primary residence.

• Homebuyer education required.

Link: HOMEstead Down Payment Assistance

6. Mortgage Credit Certificate (MCC)

The PHFA’s MCC program provides a federal tax credit of up to 50% of mortgage interest paid annually, capped at $2,000 per year, reducing federal tax liability. It can be combined with PHFA mortgage programs but not with other PHFA assistance programs.

Eligibility:

• Must be a first-time home buyer or purchasing in a targeted area.

• Income and purchase price limits apply (varies by county).

• Home must be a primary residence.

• Homebuyer education required.

Link: Mortgage Credit Certificate

Local Down Payment Assistance and Incentive Programs

1. Philly First Home Program (Philadelphia)

The Philly First Home program offers a grant of up to $10,000 or 6% of the purchase price (whichever is less) for down payment and closing costs. The grant is repayable only if the buyer moves or refinances within 15 years. Condominiums are not eligible.

Eligibility:

• Must be a first-time home buyer or not have owned a home in the past three years.

• Income at or below 120% of Philadelphia’s AMI.

• Home must be a single-family home or duplex in Philadelphia.

• City-funded homeownership counseling required before signing a sales agreement.

Link: Philly First Home

2. Montgomery County First-Time Homebuyers Program

Montgomery County provides up to $10,000 in down payment and closing cost assistance, with an additional $30,000 available for households below 80% AMI through American Rescue Plan Act (ARPA) funds. The assistance is a zero-interest loan, repayable if the home is sold or used as an investment within 15 years.

Eligibility:

• Must be a first-time home buyer.

• Income at or below 80%–100% of AMI, depending on the program tier.

• Home must be a primary residence in Montgomery County.

• Homebuyer counseling required.

Link: Montgomery County First-Time Homebuyers

3. Upper Darby Township First-Time Homebuyer Program

This federally funded program offers up to $10,000 in down payment and closing cost assistance as a forgivable loan. The home must comply with federal lead paint regulations, and a full home inspection is required.

Eligibility:

• Must be a first-time home buyer, displaced homemaker, or single parent per HUD definitions.

• Income at or below 80% of AMI.

• Home must be vacant or new construction within Upper Darby Township.

• Homebuyer education required.

Link: Upper Darby First-Time Homebuyer

4. Delaware County Homeownership First Program

Delaware County offers up to $5,000 in down payment and closing cost assistance, covering up to 2% of the purchase price, as a zero-interest loan, repayable upon sale or refinance.

Eligibility:

• Must be a first-time home buyer.

• Income at or below 80% of AMI.

• Home must be a primary residence in Delaware County.

• Homebuyer education required.

Link: Delaware County Homeownership First

5. Pittsburgh Urban Redevelopment Authority First-Time Homebuyers Program

This program provides up to $90,000 in down payment and closing cost assistance for income-eligible first-time buyers, funded by Community Development Block Grants. The assistance is a deferred loan, repayable upon sale or refinance.

Eligibility:

• Must be a first-time home buyer.

• Income at or below 80% of Pittsburgh’s AMI.

• Home must be a primary residence in Pittsburgh.

• Homebuyer education required.

Link: Pittsburgh First-Time Homebuyers

Top 3 Local Pennsylvania Lenders for Home Buyer Grants

Here are four top local Pennsylvania mortgage lenders for accessing these programs.

1. Quaint Oak Mortgage: A PHFA-approved lender offering the Keystone Forgivable in Ten Years Loan (K-FIT) with up to 5% of the purchase price (no cap), forgiven over 10 years.

2. Philadelphia Federal Credit Union (PFCU): Provides up to $20,000 via the First Front Door program for minority or first-generation buyers, requiring a $1,000 contribution.

3. Total Mortgage: Pairs PHFA’s HFA Preferred loan with the $500 grant and Keystone Advantage ($6,000 max).

These lenders streamline access to PHFA and local grants, requiring a 660+ credit score and homebuyer education. Contact them to confirm eligibility and funding availability.

Case Studies: Real-Life PA 1st Time Home Buyer Success Stories

Case Study 1: Aisha Patel, Philadelphia

Aisha Patel, a 29-year-old nurse in Philadelphia, became a first-time homeowner in 2024 through the Philly First Home program. Earning 70% of the city’s AMI, Aisha struggled to save for a down payment while paying high rent. She received a $10,000 home buying grant to cover closing costs and part of the down payment for a $200,000 rowhome, paired with an FHA loan and the PHFA’s MCC for a $1,500 annual tax credit. The mandatory homeownership counseling helped her budget for maintenance costs, ensuring long-term affordability. Aisha plans to stay in the home for at least 15 years to avoid repaying the grant, building equity in a stable neighborhood.

Case Study 2: Michael Torres, Pittsburgh

Michael Torres, a 34-year-old teacher and veteran in Pittsburgh, used the Keystone Home Loan and K-FIT programs to purchase a $180,000 home in 2024. As a veteran, Michael qualified despite owning a home over three years ago. He received $9,000 from K-FIT (5% of the purchase price) for his down payment, fully forgivable over 10 years, and secured a VA loan with no down payment. The PHFA’s homebuyer education course helped him navigate the process, and he now enjoys a fixed-rate mortgage with no private mortgage insurance, saving hundreds monthly.

How to Apply for Pennsylvania First Time Home Loans and Maximize Benefits

To access these programs:

1. Verify Eligibility: Check income, credit, and location requirements using PHFA’s website or local program guidelines.

2. Contact a PHFA-Approved Lender: Find participating lenders at PHFA Lenders.

3. Complete Homebuyer Education: Enroll in a HUD-approved course, often free through PHFA or local agencies.

4. Combine Programs: Pair PHFA mortgages with K-FIT or local grants where allowed.

5. Work with a Housing Counselor: HUD-approved counselors can identify additional resources and streamline applications.

Considerations

While Pennsylvania’s programs are robust, challenges include limited funding (e.g., HOMEstead funds vary by county), income and purchase price caps that may exclude buyers in high-cost areas like Philadelphia, and repayment obligations if homes are sold early. In 2024, 68 of 73 homebuyer assistance programs had available funding, but buyers should apply early to secure funds. Comparing program terms and consulting lenders can help navigate these hurdles.

Pennsylvania’s first-time home buyer programs, from the PHFA’s Keystone Home Loan and K-FIT to local initiatives like Philly First Home and Pittsburgh’s $90,000 grants, provide critical support for low- to moderate-income buyers, veterans, and those with disabilities. By leveraging these resources, completing required education, and working with approved lenders, first-time buyers can overcome financial barriers to homeownership. Visit the linked program websites and contact local housing authorities to start your journey toward owning a home in the Keystone State.

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