Pennsylvania Down Payment Assistance

Pennsylvania, also known as the Keystone state, is home beautiful countrysides and wonderful history. However, rising real estate prices can make home ownership in Pennsylvania difficult. Luckily, local and national programs exist that offer down payment assistance and grants to qualified applicants. The Pennsylvania Housing Finance Agency is one organization that offers such programs.

If you're thinking about purchasing a home in Pennsylvania, you may have options to help with the down payment or closing costs. Read below to learn more about any program and see if it can help with your home purchase!

Delaware County Homeownership First Program

Eligible applicants in Delaware County can receive up to $5,000 in funds to put towards the down payment and closing costs of a home purchase. The funds must be used for the down payment first, to pay up to 2% of the down payment; any remaining funds can then be put towards closing costs.

In order to be eligible for the program applicants must be first-time homebuyers and have not owned a home in the previous three years. They must also contribute at least $1,000 of their own funds towards the home purchase.

Applicants must also finish 8 hours of homeownership group counseling sessions, as well as 1 hour of an individual homeownership counseling session. Once the applicant completes the sessions, maintains good credit, and finishes their Action Plan, they will receive a Certificate of Achievement.

As of 2020, the income limits for this program are as follows:

  • 1 person household - $39,200
  • 2 person household - $44,800
  • 3 person household - $50,400
  • 4 person household - $56,000
  • 5 person household - $60,500
  • 6 person household - $64,950
  • 7 person household - $69,450
  • 8 person household - $73,900

In order for a property to be eligible, it must be a residential, owner-occupied, single-family house, which includes detached, twin, rowhouse, townhouse, or condominium, and must be located within Delaware County. The house must be compliant with the county housing quality standards. The sale price cannot exceed $218,000 as of 2020.

This program also offers homeownership counseling both before and after closing.

HOMEstead Downpayment and Closing Cost Assistance Loan

Offered through the Pennsylvania Housing Finance Agency (PHFA), qualified applicants can receive between $1,000 and $10,000 in assistance towards the down payment and closing costs of a home purchase. This assistance is offered in the form of a second mortgage with no interest, and forgiven at the rate of 20% per year, which means that after 5 years, the loan is 100% forgiven.

To be eligible for HOMEstead Downpayment and Closing Cost assistance, applicants must match the minimum down payment required by the insurer or guarantor of their mortgage. After the requirement is paid, assistance can be used to cover the rest of the down payment and closing costs. However, in certain situations, it’s possible that additional assistance will be provided to help with further costs of the property.

Applicants must also fall within certain income and purchase price limits; however, as these limits vary by county, they should be verified by the consumer. However, because certain cities and counties receive federal funding, this program is not available in those areas.

The purchase property must be inspected for lead-based paint and pass the inspection in order to be eligible.

Keystone Advantage Assistance Loan Program

This is another program offered by PHFA (Pennsylvania Housing Finance Agency). Through the Keystone Advantage Assistance Loan Program, eligible applicants can receive assistance in the form of a 10-year, no interest second mortgage to put towards down payments and closing costs. The amount of assistance depends on the market value or purchase price of the property, but homebuyers can receive as much as 4% of the purchase price or market value (or up to $6,000; whichever amount is smaller). The minimum loan amount applicants can receive is $500. Because this assistance is a loan, it needs to be paid back monthly.

In order to qualify, applicants must have a credit score of at least 660, and cannot have more than $50,000 in liquid assets after closing on their mortgage.

This assistance program can also be combined with other PHFA mortgage loans.

Lancaster Housing Opportunity Partnership DPA Program

The Lancaster Housing Opportunity Partnership Down Payment Assistance (DPA) Program is offered by the Lancaster Housing Opportunity Partnership (LHOP). By offering a 0% interest loan with no monthly payments, LHOP can offer up to $7,000 in down payment and closing cost assistance. Whether or not the loan is approved is dependent on the availability of funds. Interested applicants must be working with one of LHOP’s partner lenders and must be purchasing a property in Lancaster County. As of 2020, these partners include BB&T, Caliber Home Loans, Ephrata National Bank, First National Bank, Fulton Bank N.A., First Citizens Community Bank, HomeSale Mortgage LLC, M&T Bank, Mortgage Network, New American Funding, PeoplesBank, PNC Mortgage LLC, RMS Mortgage, Santander Bank, Sierra Pacific Mortgage, and USDA Rural Development.

In order to qualify, individuals must be first-time home buyers and cannot have owned a home in the previous three years. There can be no non-occupant co-borrowers on the loan. Applicants must contribute a minimum of $1,000 of their own funds towards the home purchase. All borrowers and co-borrowers must finish a LHOP Home Buyer Course and have to use the house as their year-round primary residence within 60 days of closing. All borrowers and co-borrowers must also have a most recent permanent address that is located in Lancaster County, and must be US Citizens, permanent resident aliens, or non-permanent resident aliens with valid Social Security Numbers who are eligible to work in the United States. Applicants will have to have a meeting with a qualified Budget Counselor before settlement.

Interested applicants have to fall within certain expected annual household income limits, which as of 2020 are as follows:

  • 1 member - $42,700
  • 2 members - $48,800
  • 3 members - $54,900
  • 4 members - $60,950
  • 5 members - $65,850
  • 6 members - $70,750
  • 7 members - $75,600
  • 8 members - $80,500

As of 2020, the purchase price limit is $187,000 for existing homes and $230,000 for new construction. Manufactured homes are not eligible for this program, unless they are attached to a permanent foundation and the lot is a part of the sale. All properties must have a house inspection, a wood-destroying insect inspection, an appraisal, and comply with 24 C.F.R. Part 35 (Lead-Based Paint Poisoning Prevention in Certain Residential Structures) requirements. The sales agreement must also have an executed LHOP Addendum.

These requirements may change and the consumer should verify all information prior to proceeding with the program.

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