HOMEstead Downpayment and Closing Cost Assistance Loan

Financial Assistance for Homebuyers in Pennsylvania

The Pennsylvania Housing Finance Agency (PHFA) offers eligible homebuyers assistance in meeting the upfront costs of homeownership through different programs, one of which is the HOMEstead Downpayment and Closing Cost Assistance Loan.

Available Assistance
The program provides homebuyers with up to $10,000 (and a minimum of $1,000) in down payment and closing cost assistance in the form of a no-interest, second mortgage loan. HOMEstead funds are forgiven at 20 percent per year over five. The first mortgage is provided by PHFA at the same rate as the Keystone Home Loan program.

Eligibility Requirements
In order to qualify for the HOMEstead program, borrowers must meet the minimum down payment requirement based on whoever is insuring or guaranteeing the mortgage. HOMEstead funds may provide the remainder of the down payment and the closing costs. In certain cases, based upon family need, the funds may provide additional money to make the property affordable to the buyer.

Borrowers participating in PHFA’s Keystone Home Loan Program are eligible to apply if they meet the HOMEstead Program income and purchase price limits that vary by county. Most major cities and seven counties are wholly excluded from the program because they receive their own federal allocation. The home must also meet other property guidelines specified by federal rules. Federal regulations for Lead-Based Paint Hazard Reduction (24 CFR Part 35) are applicable to HOMEstead Second Mortgage Program applicants. Therefore, most homes built prior to 1978 are not eligible for HOMEstead assistance.

PHFA has a network of lenders and brokers throughout the state who will process and close your loan, after which PHFA will buy the loan immediately. After the settlement, borrowers will make mortgage payments directly to PHFA for the life of your loan.

Down payment assistance programs and/or grants were researched by the team at FHA.com. Please note that all programs listed on this website may involve a second mortgage with payments that are forgiven, deferred, or subsidized in some manner until resale of the mortgaged property.

FHA.com's compilation is not a complete list, but it can serve as a starting point in your search for the down payment assistance program or grant for your situation. It is up to the consumer to contact these entities and find out the specifics of each program.

Down Payment Grants in Pennsylvania

Beaver County First Time Buyer Program

The First Time Buyer Program allows for a down payment and closing cost assistance grant if an applicant’s income is at or below 80% of the area’s median income.

Chester County First Time Home Buyer Program

The Housing Partnership of Chester County (HPCC) offers low-moderate income individuals and families the First Time Home Buyer Program to assist them in buying a new home within Chester County.

Cumberland County Affordable Housing Trust Fund First-Time Homebuyer’s Program

The Cumberland County Affordable Housing Trust Fund First-Time Homebuyer’s Down Payment and Closing Cost Assistance Program provides up to $5,000 in assistance to qualified first-time homebuyers.

Delaware County Homeownership First Program

The Delaware County Homeownership First Program offers down payment and closing cost assistance to eligible homebuyers. The total assistance is not to exceed $5,000; this will cover up to 2 percent of the down payment of the new home.