Are you a first-time homebuyer in Pennsylvania? The Pennsylvania Housing Finance Agency programs offer down payment and closing cost assistance for first-time Keystone State homebuyers. They also provide programs for new mortgage loans, for refinancing, and for home improvement loans.
What is a first-time homebuyer?
To be considered as a first-time homebuyer, the rules include that you must not have owned your primary residence during the past three years. However, in certain target counties, Veterans or buyers will not have to meet these first-time home buyer restrictions in order to take advantage of these PHFA programs.
First-time homebuyer national programs
The PHFA offers several loan and down payment assistance programs for first-time homebuyers. But find below additional resources to consider. Some national programs directed at low- to moderate-income potential homeowners include options for low — and even no — down payment requirements.
- A conventional mortgage is a home loan that is not guaranteed or insured by the federal government. But, conventional mortgages that conform to the requirements set by Fannie Mae and Freddie Mac often allow down payments as low as 3% for first-time buyers or lower-income home buyers.
- The Federal Housing Administration mortgage is the program many first-time home buyers utilize. This is especially true if you have a lower credit score. An FHA loan lets you purchase with down payments as low as 3.5% for buyers with a credit score of 580 or higher. Mortgages through the FHA program are insured by the federal government for borrowers with scores as low as 500. But to do so requires a 10% down payment. *Note, the “insurance” is not for you. It is for your lender if you default on the loan.
- The U.S. Department of Veterans Affairs assists service members, veterans and their surviving spouses to buy homes. VA loans are particularly generous. They provide very competitive interest rates. They often require no down payment or mortgage insurance. And, there is no official minimum credit score, although most VA-approved lenders require scores of at least 640.
- A USDA home loan is a zero-down-payment mortgage. These loans are for eligible rural and suburban home buyers in specified areas. USDA loans are issued by the U.S. Department of Agriculture through its USDA Rural Development Guaranteed Housing Loan Program. Loan qualifications include income limitations. And these vary by region. Applicants with credit scores of 640 or higher receive a streamlined process, while those with lower scores are required to meet more stringent underwriting standards.
PHFA eligibility for a first-time homebuyer
These programs are specifically tailored to first-time homebuyers in Pennsylvania. And while each program has its own qualifying standards, your PHFA-approved lender will help you work out all the details.
- HFA Preferred Risk Sharing
- HFA Preferred
- Keystone government loan program
- Keystone home loan program
- Keystone Advantage Assistance loan program
- Mortgage credit certificate
- Programs for persons with disabilities
- Homestead down payment and closing cost assistance
- Employer-assisted housing
Some of the highlights of these programs include sown payment and closing cost assistance. There are specific programs for borrowers with disabilities. Other programs are directly for purchase and refinancing and most of these loans include a 30-year fixed-interest mortgage. Additionally, tax credits may apply and there are some employer-assisted housing available through participating employers.
Eligibility for first-time homebuyers in Pennsylvania
- Credit Score: A minimum credit score of 660 is required for some programs. But borrowers with FICO scores below 680 can complete home buyer education.
- Assets: The borrowers’ assets, including investment accounts, must be no greater than $50,000 after payment of closing costs (retirement accounts may be excluded with certain restrictions).
Income: Plan to use no more than 30% of your income for your monthly payment. Your household income and purchase price cannot exceed county limits.
Residence: The home must be your primary residence.
2021 PHFA first-time homebuyer programs
- HFA Preferred Risk Sharing home loan with no mortgage insurance requirement.
- Programs for persons with disabilities to help with down payment and closing costs.
- Keystone government loan program for borrowers of FHA, USDA and VA loans.
- HFA Preferred home loan with mortgage insurance.
- Keystone home loan program for purchasing property in certain targeted areas.
- Mortgage credit certificate providing annual tax credit.
- Keystone Advantage Assistance loan program providing down payment and closing cost assistance.
- Homestead forgivable loan for down payment and closing cost assistance.
- Employer-assisted housing program providing assistance to employees of participating companies and institutions.
Remember that the lender you work with might have additional borrower requirements in addition to those stated in any state assistance program. These requirement may include credit score minimums and other credit qualifications.
For full details on any Pennsylvania Housing Finance Agency program, visit the PHFA website.
Also check out these Pennsylvania lenders that participate in PHFA programs.
We can help you find a home
Here at White Diamond, we are committed to helping you find a home that fits into your budget. If you have qualified for any of these first-time homebuyer programs, let us help you find that first home. Check out our other articles for new homeowners here. You can see some available homes in Fayette and Greene counties here:
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