A Comprehensive Guide to Pennsylvania’s First-Time Homebuyer Grants and Assistance Programs

Purchasing your first home can feel financially daunting because of the many expenses associated with the transaction. And saving up enough money to pay for these expenses often takes time and discipline. But if you can start setting aside money in small (or large) chunks each month, there are multiple first-time homebuyer grants and assistance programs that can help you reach your goal faster.

In this post, we’ll do a deep dive into the grants and assistance programs available to first-time homebuyers in Pennsylvania. These programs are administered by local governments, nonprofits, and lenders and may have different eligibility criteria as well as different levels of financial assistance they offer. Most offer counseling and homeowner education in addition to financial assistance to help your homeownership journey be as successful as possible.

Let’s dig in.

Philly First Home Program

The Philly First Home Program provides first-time homebuyer’s assistance up to $10,000 or 6% of the purchase price (whichever is less), to help pay for the down payment or closing costs.

Who is Eligible?

To be eligible for this program, you must be a first-time homebuyer or someone who hasn’t owned a home in the last three years. Your household must fall within the income eligibility parameters, which are based on the number of people in your household. For example, a family of four can have a maximum household annual income of $114,400 to be eligible to participate.

What Types of Properties are Eligible?

Single-family homes or duplexes in Philadelphia.

How Does it Work?

Participants must first complete a home-ownership counseling program through a Philadelphia-sponsored housing counseling agency. Participants must complete this program before they sign a purchase agreement. However, these counseling programs are available to all Philadelphia residents, regardless of whether they’re participating in a first-time homebuyer assistance program.

The counseling program will cover:

• Financial aspects of buying a home, including: developing your budget, arranging a mortgage, building credit, and how to avoid foreclosure.
• Legal aspects of buying a home, including your homeownership rights (and responsibilities) and legal documents like the home’s title.

When you contact the agency to sign up for a counseling program, make sure you have the following information available:

• Your household’s total annual income
• All of your income sources. These can include wages, social security income, disability income, etc.
• The number of people in your household

Is it a Grant or a Loan?

The money you receive from the Philly First Home Program is an interest-free loan that will be forgiven if you stay in your home (without refinancing) for at least 15 years. If you move or refinance your loan before the 15th anniversary of your home purchase, you will have to repay the loan.

Philadelphia residents who meet the income and property eligibility requirements could receive up to $10,000 toward the purchase of their home, which is among the highest possible awards available to Pennsylvania homebuyers. If they stay at their home for at least 15 years, they don’t have to pay this loan back.

In addition, this program doesn’t have any specific credit score or first mortgage requirements, which may make it easier for some homebuyers to become eligible for assistance.

Delaware County Homeownership First Program

The Delaware County Homeownership First Program provides first-time homebuyers’ assistance up to $10,000 for the down payment and closing costs on the purchase of a first home. The assistance can be used for up to 2% of the required down payment, and the rest will be allocated to pay for closing costs.

Who is Eligible?

First-time homebuyers, anyone who hasn’t owned a home in three years or more, and divorced homemakers who were displaced from their homes are eligible. Program participants must meet maximum income eligibility requirements that are based on the number of people in their household. For example, the maximum annual household income for a family of four is $89,250.

In addition, the program participant must contribute at least $1,000 toward the home purchase. Additionally, their liquid assets at the time of their application submission and directly after the home sale has been finalized must not be more than $15,000 (excluding any retirement savings).

Applicants must also secure a mortgage loan that:

• Is a fixed-rate, 30-year loan
• Carries an interest rate that is at or below-market interest rates
• Carries a maximum of three points in fees
• Has a minimum loan-to-value ratio of 90%

What Types of Properties are Eligible?

Eligible properties for down payment and closing cost assistance are single-family, owner-occupied homes that are being used as residences. The maximum sale price for the home can be $290,000.

How Does it Work?

Before qualifying for the first-time homebuyer’s assistance program, an applicant must complete eight hours of group homeownership counseling and at least one individual counseling session. Once these sessions are complete, and the applicant has established “good” credit and completed all of the items in their action plan, they will be eligible to receive the down payment and closing cost assistance.

Is it a Grant or a Loan?

This is an interest-free loan that is repayable when the homeowner:

• Sells the home
• Transfers the title of the property, or
• Refinances their home mortgage for the purposes of debt consolidation.

If the homeowner refinances their home mortgage to achieve a lower interest rate, they do not have to repay the loan.

If the home is in a Revitalization Area (see more in the following section), the loan will be forgiven if the homeowner stays in the home for at least five years. The communities in Delaware County that are considered revitalization areas can be found on the list in the following section: “Revitalization Program in Delaware County.”

What’s Good About This First-time Homebuyer Program?

This is an interest-free loan that is only repayable once the homebuyer sells or transfers the title of their property or if they refinance their loan for debt consolidation purposes. Like the Philly First program, this down payment and closing cost assistance program is among those offering the most financial assistance to homebuyers.

Revitalization Program in Delaware County

To be eligible to participate in the Revitalization Program in Delaware County, the purchased home must be in one of the following communities:

• Aldan Borough
• Millbourne Borough
• Chester Township
• Morton Borough
• Clifton Heights Borough
• Norwood Borough
• Collingdale Borough
• Parkside Borough
• Colwyn Borough
• Prospect park Borough
• Darby Borough
• Ridley Township
• Darby Township
• Ridley Park Borough
• East Lansdowne Borough
• Rutledge Borough
• Eddystone Borough
• Sharon Hill Borough
• Folcroft Borough
• Tinicum Township
• Glenolden Borough
• Trainer Borough
• Lansdowne Borough
• Upland Borough
• Lower Chichester Township
• Yeadon Borough
• Marcus Hook Borough

For other program details, including who is eligible, what types of properties are eligible, how it works, whether it’s a grant or loan, and program benefits, please see the appropriate sections under the Delaware County Homeownership First Program.

What’s Good About This Buyer Program?

If homebuyers wish to purchase a home in a revitalization area, they have a dedicated program from which to apply for assistance. They could be eligible to receive up to $10,000 as an interest-free loan, which is among the highest levels of financial assistance available to Pennsylvania homebuyers.

Montgomery County Grants

Montgomery County Grants provide first-time homebuyer assistance for down payment and closing costs up to $10,000 or 10% of the estimated affordable sales price for the program participant.

Who is Eligible?

First-time homebuyers or people who haven’t owned a home in at least three years are eligible. They must have a household income that is below the median area income for the number of people in their household (Ex: the median area income for a family of four is $111,600).

Applicants who have an annual income below 80% of the median area income for their household number may be eligible to receive an additional $15,000 in assistance. Households with an annual income below 60% of the median area income for their household number may be eligible to receive an additional $30,000 in assistance.

In order to qualify for this grant, the homebuyer must:

• Intend to occupy purchased property as their primary residence.
• Currently live and/or work full time in Montgomery County at the time of application and closing.
• Have a minimum of $3,000 in liquid assets. The assets must be their own money; no gifts of cash or equity can be used toward the first $3,000 of the home purchase.
• Qualify for a conventional, FHA, or VA loan at below-market interest rates. That means their credit, employment, and financial background must meet lender’s standards for below-market interest rates.

What Types of Properties are Eligible?

Single-family homes in Montgomery County.

How Does it Work?

Applicants must complete the required homebuyer counseling program prior to signing a purchase agreement or sales contract to buy a home. Applicants must pay a nonrefundable $25 fee when submitting their application. Upon completing their counseling program, applicants will become eligible to receive funds on a first-come-first-served basis.

Is it a Grant or a Loan?

This is an interest-free loan that must be repaid only if the home is:

• Sold or transferred
• Vacated or abandoned as a primary residence, or
• Used as an investment property within 15 years of the purchase date.

What’s Good About This Buyer Program?

This program could greatly benefit Montgomery County home buyers who plan to stay in their homes for at least 15 years. Those with annual incomes below the median area income could potentially qualify for up to $40,000 in down payment and closing cost assistance. If you plan to stay in your home for less than 15 years, it would be beneficial to consider your repayment responsibility when determining how much assistance you want to take.

Upper Darby County Assistance

The Upper Darby County Assistance program is a federally-funded, first-time homebuyer assistance program providing up to $10,000 toward a down payment or closing costs.

Who is Eligible?

First-time homebuyers, people who haven’t owned a home in at least three years, divorced homemakers who were displaced from their homes, and single parents as defined by HUD are eligible. Applicants must be U.S. citizens or permanent resident aliens with at least five years of continual residency in the United States and must be able to show proof of this residency.

Program participants must also fall within the annual household income threshold based on the number of people in their household. For a family of four, that threshold is $89,250. Note: The household income will be calculated using all income (wages, social security, alimony, child support, interest, etc.) for everyone on the deed of the home, even if they don’t live at the property.

In addition to this income threshold, the buyer must be able to pay 3.5% of the purchase price as a down payment. If they’re approved for the program, participants can’t use any other grant funding to help them pay for the home.

What Types of Properties are Eligible?

Single-family homes priced at or below $200,000 that are located in Upper Darby Township (not just part of the school district).

The purchased property must be vacant or new construction and intended to be owner-occupied as a principal residence. Rental properties are eligible if they are vacant at the time of sale or if the buyer is the renter.

The property must be located within the township boundaries, not just within the school district.

The property must also be in compliance with federal lead paint regulations. That means no surface can show any signs of paint deterioration. It is actually the buyer’s responsibility to ensure that any chipped or otherwise deteriorating paint (both inside and outside the home) has been remedied before the inspector from the Township makes their visit. If the deteriorating paint hasn’t been remedied, the Township will reject the application for assistance.

How Does it Work?

Buyers must complete and submit the full application prior to signing the final purchase agreement. They will need to obtain a mortgage and have the mortgage lender complete the lender’s certification form.

The seller must complete two forms:

1. One form regarding federal lead paint regulations
2. One form indicating the buyer will be using the Upper Darby Township First-Time Homebuyer Assistance Program to purchase the property

Once the application has been submitted, it will take 3 weeks to process and then schedule the visual inspection. In addition to the visual inspection by the Township, the buyer will be required to arrange for a full home inspection and will need to submit the receipt as well as the contact information for the inspection company to the Township.

The agreement of sale should be contingent on the buyer receiving approval for assistance. If assistance is approved, the Township will send the approved funds to the title company for completion of the sale. Any Township funds that aren’t needed to complete the purchase will be returned to the Township.

Is it a Grant or a Loan?

The Upper Darby First-Time Homebuyer Assistance Program is a forgivable loan. Within the first four years from the home purchase date, the homebuyer must pay back the loan in full if any of the following occur:

• Sale or transfer of ownership of the property
• Property is converted to a non-residential use
• Property becomes a rental property
• The owner(s) die
• The property is destroyed by fire (or other means)
• The homeowners default on their first mortgage

Starting in year five, the loan is forgiven by 16.67% per year. After year 10, the loan will be completely forgiven.

What’s Good About It?

Since the loan is forgiven incrementally starting in year five, homeowners have a little more flexibility in terms of what they can do with the home and when. It may also be easier for homebuyers with lower credit scores to receive approval for this type of assistance over other programs that have a minimum credit score requirement.

Lupert IDA Program from United Way

The Lupert IDA Program from United Way helps working people purchase a home by doubling their savings. For example, if you save $2,000, the program will give you $4,000, so that you have $6,000 toward buying a home. In order for their savings to be counted toward the program match, participants must open an account for a minimum of three months and up to two years prior to the purchase of their home.

Who is Eligible?

Anyone with earned income, and who is a resident of Philadelphia; Montgomery; Delaware; or Chester County, PA. Applicants must not have purchased a home in the last three years and have an annual income at or below the maximum income requirement, based on the number of people in their household. For example, a four-person household can have a maximum annual income of $111,000.

What Types of Properties are Eligible?

Single-family homes in Philadelphia; Montgomery; Delaware; or Chester County, PA.

How Does it Work?

Contact the United Way at 215-748-8800 for more detailed program information.

What’s Good About This Buyer Program?

Hands down, the matched savings. The money awarded from the program is considered a grant and the homebuyer does not need to repay it. The program also includes homebuyer education courses to help ensure participants are successful in their homeownership journeys.

Neighborworks LIFT Program

The Neighborworks LIFT Program is a down-payment assistance loan program.

Who is Eligible?

Program participants must meet income eligibility requirements that are based on the number of people in the household. For example, a four-person household can earn a maximum total annual income of $99,550.

Participants must also be able to arrange for a conventional loan or FHA loan with an approved lender partner and have a credit score of at least 620. Homebuyers must be able to contribute at least $1,200 of their own money to the purchase of their home.

What Types of Properties are Eligible?

A single-family home that will be the homebuyer’s primary residence.

The property must be located within one of the following Western Pennsylvania Counties: Allegheny, Armstrong, Beaver, Butler, Clarion, Clearfield, Crawford, Elk, Erie, Fayette, Forest, Greene, Huntingdon, Indiana, Jefferson, Lawrence, McKean, Mercer, Somerset, Venango, Washington, Warren, or Westmoreland.

How Does it Work?

Prior to approval, program participants must:

• Complete an application.
• Complete eight hours of homeowner education.
• Meet for one hour in person with one of the NeighborWorks counselors prior to approval.

After closing on the home purchase, program participants must continue to meet with their NeighborWorks counselor for six months after closing and then continue to meet once per year for seven years.

Is This a Grant or Loan?

This is a loan! It is a second mortgage that is paid back over a set term. The interest rate on the second mortgage is 2% over the first mortgage lender’s interest rate.

What’s Good About It?

There is no pre-prescribed ceiling for the amount of assistance a borrower can receive from this program. Borrowers will be assessed individually and their second mortgages approved based on their ability to repay. That means borrowers could potentially qualify for more assistance through this program than through others.

PA Housing Finance Agency Programs

There are several programs available through the PA Housing Finance Agency.

PHFA Grant

The PHFA Grant provides up to $500 for a down payment or closing cost assistance when obtaining a HFA Preferred (Lo MI) first mortgage or a loan through the Keystone Advantage Assistance Loan Program. There is no first-time home-buying requirement for this grant or for an HFA Preferred (Lo MI) first mortgage.

Who is Eligible?

People who are obtaining an HFA Preferred (Lo MI) first mortgage.

What Types of Properties are Eligible?

Single family homes that will be used as a primary residence.

How Does it Work?

Applicants for the grant must first apply and receive approval for an HFA Preferred (Lo MI) first mortgage. Once they receive their approval, they can apply for the PHFA grant. You can apply for this grant through a participating lender.

Is this a Grant or Loan?

Grant. It doesn’t need to be repaid.

What’s Good About It?

This grant doesn’t need to be repaid and is available to any qualifying homebuyer, regardless of when they last bought a new home.

Keystone Advantage Assistance Loan Program

The Keystone Advantage Assistance Loan Program allows for a second mortgage of up to 4% of the purchase price or $6,000 (whichever is less) to help with the down payment or closing costs of purchasing a home.

The minimum loan amount is $500. It can be used in conjunction with a PHFA Grant as well as an HFA Preferred (Lo MI) first mortgage, a Keystone government loan and a Keystone Home Loan. It can also be paired with a conventional, FHA, VA, or RD loan. It can’t be paired with another type of PHFA assistance other than the Access Modification Loan Program.

Who is Eligible?

Borrowers who are eligible for this down payment and closing cost assistance must:

• Qualify for one of the above-mentioned loans
• Have a credit score of at least 680
• Have no more than $50,000 in liquid assets (after deducting the expenses needed to close the loan).

What Types of Properties are Eligible?

Single-family homes that will be used as a primary residence.

How Does it Work?

You can apply for this program through a participating lender.

Is This a Grant or Loan?

An interest free loan that is paid back over the course of 10 years.

What’s Good About It?

This assistance program is open to all qualifying homebuyers regardless of when they last purchased a house and can be paired with a variety of different first mortgage options.

Keystone Forgivable in 10-years Loan Program (K-FIT)

The Keystone Forgivable in 10-years Loan Program (K-FIT) is a second mortgage to help eligible homebuyers with down payment and closing costs. The minimum loan amount is $500. Buyers can receive up to 5% of the purchase price or appraised value of the home (whichever is lower), and there is no maximum dollar amount of assistance. This can be used in conjunction with a Keystone Home Loan as well as conventional, FHA, RD and VA loans. It may not be used with any other assistance program other than the Access Home Modification Loan Program.

Who is Eligible?

Homebuyers with a credit score of at least 660 and liquid assets that total no greater than $50,000 (after the costs to close the loan have been deducted), are eligible for the program.

What Types of Properties are Eligible?

Single-family homes that will be used as a primary residence.

How Does it Work?

You can apply for this loan program through a participating lender.

Is This a Grant or Loan?

This is a forgivable loan that is forgiven incrementally at a rate of 10% per year. After 10 years, it is 100% forgiven.

What’s Good About It?

This loan has no ceiling for the amount homebuyers can be awarded, so homebuyers with higher credit scores who are looking to purchase a more expensive home may qualify for more assistance through this program than through another one.

Access Downpayment and Closing Cost Assistance Program

The Access Downpayment and Closing Cost Assistance Program is a down payment and closing cost assistance loan for up to $15,000 for persons with disabilities who are using the Access Home Modification Program and also qualify for the Keystone Home Loan program, the HFA Preferred (Lo MI) first mortgage, or the Keystone Government Loan Program.

Who is Eligible?

Disabled persons who are using the Access Home Modification Program and have an annual income that is 80% of the statewide median income or less (as determined by HUD). They must also arrange a first mortgage through either the Keystone Home Loan Program, the Keystone Government Loan Program, or an HFA Preferred (Lo MI) first mortgage.

What Types of Properties are Eligible?

There are no home eligibility requirements.

How Does it Work?

You can apply for this program through a participating lender.

Is this a grant or loan?

A no-interest loan.

What’s Good About It?

This program is specifically focused on ensuring disabled persons have access to financial assistance when purchasing a home that may require modifications to make it functional for them.

Access Home Modification Loan

An Access Home Modification Loan is a zero-interest loan of between $1,000 and $10,000 to be used in conjunction with a Keystone Government Loan or the Keystone Home Loan Program. The loan is intended for persons with disabilities so they can make necessary modifications to the home they are purchasing in order for the home to meet their needs.

Who is Eligible?

Disabled persons who are arranging a Keystone Government Loan or a Keystone Home Loan to purchase their home.

What Types of Properties are Eligible?

There are no home eligibility requirements.

How Does it Work?

You can apply for an Access Home Modification Loan at a participating lender. Prior to receiving your home modification loan, you must provide your lender with a contract for the modifications. If your home modification loan has been approved, the funds will be held in escrow until your home sale closes. An initial payment of one-third of the contracted amount will be released to the contractor on or just after your closing date.

Is This a Grant or Loan?

This is a zero-interest loan that does not need to be repaid as long as you occupy the home as your primary residence.

What’s Good About It?

This program helps disabled persons pay for the home modifications necessary to make the home livable for them.

HOMEstead Downpayment and Closing Cost Assistance Program

The HOMEstead Downpayment and Closing Cost Assistance Program provides down payment and closing cost assistance of between $1,000 and $10,000 in the form of a zero-interest second mortgage.

Who is Eligible?

People who meet the income requirements that have been determined by county and household size. They must also meet the down payment requirement by the lender that is guaranteeing the loan.

What Types of Properties are Eligible?

Homes built after 1978 and that meet federal lead paint standards are eligible as long as they are located within an eligible geographic area.

How Does it Work?

You can apply for this program through a participating lender.

Is This a Grant or Loan?

This is a zero-interest loan that is forgivable at a rate of 20% per year. After five years, the loan is 100% forgiven.

What’s Good About It?

This loan is forgiven in five years, which gives home buyers more flexibility than other programs.

Employer Assisted Housing Initiative

The Employer Assisted Housing Initiative is a program that partners with employers to match the money employers give toward their employees’ efforts to buy a home. Homebuyers can receive up to $8,000 for down payment or closing cost assistance.

Who is Eligible?

Homebuyers whose employers participate in the program and meet the eligibility requirements for the Advantage Program are eligible.

What Types of Properties are Eligible?

There are no property requirements for this assistance.

How Does it Work?

The employer gives the employee a no-interest second mortgage at closing to help with the down payment and closing costs. The Employer Assisted Housing Initiative matches employer contributions up to $8,000, and it’s forgiven after 10 years as long as the employee is still with the company.

Is This a Grant or a Loan?

This is an interest-free loan that is amortized over 10 years.

What’s Good About It?

If a homebuyer has a participating employer, they could potentially receive more assistance through this program than through others, depending on how much assistance their employer gives. It’s also open to all employees of participating employers, which could mean more people are eligible for this type of assistance than for other programs.

The Bottom Line

If you’re purchasing a home in Pennsylvania, whether it’s for the first time or you’ve done it multiple times, there are down payment and closing cost assistance programs that can help. The key is to find the best program to fit your financial situation and your future plans.