PHFA First-Time Home Buyer Programs: Pennsylvania Down Payment Help Explained

The Pennsylvania Housing Finance Agency (PHFA) offers several programs for first-time buyers statewide, including the Keystone Home Loan (below-market 30-year mortgages), Keystone Advantage Assistance (a 0% interest second loan of up to 4% of the purchase price for down payment and closing costs), and a PHFA Grant of $500 for qualifying buyers. These programs are available to buyers in all 11 counties of North Central Pennsylvania, and eligibility is based on income limits, purchase price limits, and credit score requirements set by PHFA.

Most first-time buyers in North Central Pennsylvania never hear about PHFA until they're already deep into a home search. Some never hear about it at all. That's a problem, because Pennsylvania's state housing finance agency offers meaningful down payment assistance that can make the difference between buying this year and waiting another two.

Here's what PHFA actually offers, who qualifies, and how to use it when buying in Lycoming, Clinton, Tioga, or any of the other counties in our service area.

PHFA stands for the Pennsylvania Housing Finance Agency. It's a state agency created to expand homeownership access for Pennsylvania residents. PHFA doesn't lend directly to buyers. Instead, it partners with approved lenders across the state, who originate PHFA-backed mortgages on PHFA's terms.

For buyers, this means you apply through a participating lender, and if you qualify, you get access to loan products and assistance programs that aren't available on the open market.

This is PHFA's core first mortgage product. It offers a competitive, fixed-rate 30-year mortgage with an interest rate that is set by PHFA (typically at or below market rates at time of application). The Keystone Home Loan is available for primary residences across Pennsylvania and is the foundation most buyers use to stack additional PHFA assistance on top of.

To qualify for the Keystone Home Loan, buyers generally need:

This is the down payment help most buyers come looking for. The Keystone Advantage Assistance Loan provides up to 4% of the purchase price (or appraised value, whichever is lower) as a second loan, with a minimum of $500 and a maximum of $6,000.

The terms: 0% interest, repaid over 10 years in equal monthly payments. There's no balloon payment and no early payoff penalty. This money can be applied toward your down payment, closing costs, or both.

To be eligible, you must be using a PHFA first mortgage (such as the Keystone Home Loan) and meet the income and purchase price limits for your county.

For buyers using a Keystone Home Loan with an FHA, VA, or USDA loan type, PHFA offers a $500 grant. Unlike the Keystone Advantage Assistance Loan, this is a grant, not a loan. It does not need to be repaid.

$500 won't cover a full down payment on its own, but when stacked with the Keystone Advantage Assistance Loan, it reduces your upfront cash requirement at closing.

PHFA sets income and purchase price limits by county. These change periodically, so the numbers below are reference ranges rather than guaranteed current figures. Your PHFA-approved lender will confirm the exact limits for your county at the time of application.

Income and purchase price limits are set by PHFA and subject to change. These ranges are approximate and for general reference only. Contact a PHFA-approved lender or visit phfa.org for current limits before making financing decisions based on these figures.

In most of the North Central PA market, the purchase price ceiling is well above the median home price, which means the vast majority of homes in our service area are eligible properties for PHFA programs.

Not necessarily. PHFA defines "first-time buyer" as anyone who has not owned a home as their primary residence in the past 3 years. This means someone who sold a home 4 years ago and has been renting qualifies.

Additionally, PHFA waives the first-time buyer requirement for:

If you've owned before, it's still worth asking your lender whether you qualify. The answer might surprise you.

PHFA (Pennsylvania Housing Finance Agency) is a state agency that offers affordable mortgage programs for Pennsylvania buyers. Key programs for first-time buyers include the Keystone Home Loan (below-market-rate 30-year mortgages), Keystone Advantage Assistance (a second loan of up to 4% of the purchase price for down payment and closing costs), and a PHFA Grant of $500 for buyers using certain loan types. Programs are available across all 11 counties in North Central PA.

Not always. PHFA's definition of "first-time buyer" includes anyone who has not owned a home as a primary residence in the past 3 years. Some PHFA programs waive this requirement for veterans and for buyers purchasing in targeted census tract areas. Buyers in many rural North Central PA counties may also qualify under targeted area exceptions.

Most PHFA programs require a minimum credit score of 660 to 680, depending on the loan type and program. FHA-backed PHFA loans may accept scores as low as 620 in some cases. Your PHFA-approved lender will pull your credit and determine which programs you qualify for based on your full financial picture.

The Keystone Advantage Assistance Loan provides up to 4% of the purchase price (or appraised value, whichever is lower) as a second loan with a 10-year repayment term at 0% interest. The minimum is $500 and the maximum is $6,000. This money can be used toward down payment, closing costs, or both.

Yes. PHFA programs are available statewide, including across all 11 counties in Hodrick Realty's service area: Lycoming, Clinton, Tioga, Potter, Sullivan, Bradford, Union, Snyder, Northumberland, Columbia, and Montour. Our team works with buyers using PHFA financing in all of these markets regularly.

Find Out Which PHFA Programs You Qualify For

PHFA programs can reduce how much cash you need to bring to closing, but you have to know they exist and connect with the right lender. Our team at Berkshire Hathaway HomeServices Hodrick Realty works with first-time buyers across all 11 counties and can connect you with PHFA-approved lenders who know this process. Schedule a free consultation and we'll help you map out your options.

Call or text 570-321-7000, or visit bhhshodrickrealty.net to connect with our team.