Pennsylvania First-Time Home Buyer Programs 2026: PHFA Guide

PHFA Programs Overview

The Pennsylvania Housing Finance Agency (PHFA) is the state housing finance agency, offering first mortgage loans, down payment assistance, and tax credits for first-time and repeat home buyers. PHFA works through a network of approved lenders across all 67 Pennsylvania counties.

PHFA programs can be layered — you can combine a Keystone first mortgage with Keystone Advantage or K-FIT down payment assistance. Each program has its own eligibility rules, and you must qualify for all programs you combine.

Keystone Home Loan: Below-Market First Mortgage

The Keystone Home Loan is PHFA's flagship first mortgage program. It offers 30-year fixed-rate FHA, VA, USDA (RD), and conventional HFA Preferred loans at rates that are typically 0.25-0.50% below market. On a $280,000 loan, that rate discount saves roughly $50-90 per month.

The program requires a minimum 660 credit score for conventional loans (640 for FHA/VA/RD in most cases) and is open to first-time buyers statewide. Repeat buyers can qualify if purchasing in a targeted area or if they have not owned a home in the past 3 years.

Income and purchase price limits apply and vary by county. See our FHA vs conventional guide to pick the right loan type for your situation.

• 30-year fixed-rate FHA, VA, USDA, or conventional loans
• Rates typically 0.25-0.50% below market
• Minimum 660 credit score (640 for government loans)
• First-time buyer requirement — waived in targeted areas
• Income and purchase price limits vary by county
• Can be combined with Keystone Advantage or K-FIT DPA

Keystone Advantage Assistance: $6,000 DPA Loan

Keystone Advantage provides a 0% interest second loan for down payment and closing costs. You can borrow up to 4% of the purchase price or $6,000, whichever is less. The loan is repaid over 10 years in monthly installments — on the maximum $6,000, that is just $50 per month.

Because it is a loan (not a grant), there is no forgiveness period and no repayment penalty if you sell early — you simply pay off the remaining balance at closing. This makes it more flexible than forgivable programs if you might move within 5-10 years.

On a $250,000 home with an FHA loan, $6,000 covers about two-thirds of the 3.5% down payment ($8,750), dramatically reducing your out-of-pocket cost.

• Up to 4% of purchase price or $6,000 (whichever is less)
• 0% interest second loan, repaid over 10 years
• About $50/month on the maximum amount
• No forgiveness period — repay balance when you sell or refinance
• Can be combined with Keystone Home Loan first mortgage
• Minimum 660 credit score required

K-FIT: Forgivable Down Payment Assistance

The Keystone Forgivable in Ten (K-FIT) program provides a second loan equal to 5% of the lesser of the purchase price or appraised value. The loan is forgiven at 10% per year over 10 years — stay in the home a decade and you owe nothing.

On a $280,000 purchase, K-FIT provides $14,000 — enough to cover a full FHA down payment plus most closing costs. If you sell or refinance before year 10, you repay only the unforgiven portion.

K-FIT has no monthly payment and no interest. It is the best option for buyers who plan to stay in their home long-term and want maximum upfront assistance.

• 5% of purchase price or appraised value (whichever is less)
• Forgiven 10% per year over 10 years
• No monthly payment, no interest
• On a $280K home: ~$14,000 in assistance
• Repay only unforgiven balance if you sell early
• Must be paired with a PHFA first mortgage

PHFA Income and Purchase Price Limits 2026

PHFA income limits vary by county and household size. Purchase price limits also apply. Here are the approximate 2026 limits for major Pennsylvania counties — always verify current figures at PHFA.org.

• Income limits based on gross annual household income
• Higher limits for households of 3 or more
• Purchase price limits apply to total price, not loan amount
• Targeted areas have higher limits and no first-time buyer requirement
• Verify current limits at PHFA.org before applying

PHFA Eligibility Requirements

To qualify for PHFA programs, you must meet these requirements. First-time buyer status means no ownership interest in a primary residence during the past 3 years — waived for targeted areas and for Keystone Advantage when paired with certain loans.

Credit score: minimum 660 for conventional, 640 for FHA/VA/RD. DTI ratio: maximum 45% for most programs, up to 50% with strong compensating factors. See our DTI ratio guide for ways to lower your DTI.

Occupancy: the home must be your primary residence within 60 days of closing. Homebuyer education: required for all first-time buyers using PHFA programs — free online courses are available.

• First-time buyer (no ownership in past 3 years) — waived in targeted areas
• Credit score: 660+ conventional, 640+ FHA/VA/RD
• DTI: 45% max (50% with compensating factors)
• Primary residence only — no investment properties
• Complete PHFA-approved homebuyer education course
• Must use a PHFA-approved lender

How to Apply for PHFA Programs

You cannot apply directly to PHFA — you must work through a PHFA-approved lender. Here is the process.

Step 1: Find a PHFA-approved lender using the lender directory at PHFA.org. Step 2: Get pre-approved — the lender checks your credit, verifies income, and determines which programs you qualify for. Step 3: Complete the required homebuyer education course. Step 4: Shop for a home within the purchase price limit for your county. Step 5: Close — PHFA assistance funds are delivered at settlement.

• Step 1: Find a PHFA-approved lender at PHFA.org
• Step 2: Get pre-approved and confirm program eligibility
• Step 3: Complete homebuyer education (free online options)
• Step 4: Find a home within county purchase price limits
• Step 5: Close — DPA funds provided at settlement
• Tip: Compare 2-3 PHFA lenders — rates and fees vary

Local Pennsylvania DPA Programs

Many Pennsylvania cities and counties offer their own assistance on top of PHFA programs.

• Local programs often stack with PHFA assistance
• Philadelphia and Pittsburgh have the largest city programs
• Income limits for local programs are usually lower than PHFA
• Ask your lender which local programs can combine with Keystone loans