2026 Pennsylvania First-Time Homebuyer Programs and Loans

Pennsylvania first-time homebuyer programs can help reduce the upfront cost of buying a home through down payment assistance and grants. This guide breaks down the main programs available, who qualifies and how to apply, so you can find the best option in the Keystone State.

First-time homebuyer programs in Pennsylvania

Several first-time homebuyer programs in Pennsylvania are offered through the Pennsylvania Housing Finance Agency (PHFA), which provides loans, down payment assistance and grants to help make homeownership more affordable.

Here are some of the main programs available across the state and who they target:

HFA Preferred (Lo MI)

The HFA Preferred™ (Lo MI) loan is a 30-year fixed-rate mortgage designed for low- to moderate-income buyers in Pennsylvania. It offers low down payments and can be combined with other PHFA assistance programs. You don’t have to be a first-time homebuyer to qualify.

Requirements

Keystone Home Loan Program

The Keystone Home Loan Program offers a 30-year fixed-rate mortgage for first-time homebuyers in Pennsylvania. It also allows eligible veterans and buyers in targeted areas to qualify, even if they’ve previously owned a home.

The program supports multiple loan types, allowing buyers to choose options with low or no down payment, depending on eligibility.

Requirements

Keystone Advantage Assistance Loan Program

The Keystone Advantage Assistance Loan provides a 0% interest second mortgage to help cover down payment and closing costs. Eligible borrowers can receive up to 4% of the purchase price (max $6,000) and repay the loan over 10 years.

This assistance loan must be paired with a PHFA first mortgage, such as HFA Preferred, Keystone Home Loan or a government-backed loan (FHA, VA or RD).

Requirements

Keystone Forgivable in Ten Years Loan Program (K-FIT)

The Keystone Forgivable in Ten Years Loan Program (K-FIT) provides down payment and closing cost assistance through a second mortgage that is fully forgiven over 10 years. Eligible borrowers can receive up to 5% of the purchase price or appraised value, with no maximum dollar limit, to help cover the minimum required.

Requirements

PHFA Grant

The PHFA Grant provides $500 toward the down payment and closing costs for buyers using the HFA Preferred (Lo MI) loan. This assistance doesn’t need to be repaid and follows the same eligibility requirements as the HFA Preferred program.

Requirements

Pennsylvania first-time homebuyer qualifications

Requirements for Pennsylvania first-time homebuyer programs vary, but most include income limits, purchase price caps and minimum credit score requirements, which are often around 660 depending on the program. Here’s how the application process typically works.

Steps to apply for a first-time homebuyer program in Pennsylvania

Step 1: Compare available programs

Start by reviewing the PHFA’s first-time homebuyer programs, including loans, grants, down payment assistance and programs for buyers with disabilities. Compare options to see which programs best match your financial situation and homebuying goals.

Step 2: Determine your eligibility

Check which programs you qualify for based on your income, credit score, savings and location. Some programs require a minimum contribution (often $1,000), and in some cases, you may be able to combine multiple programs.

Step 3: Complete homebuyer education (if required)

Some PHFA programs require a homebuyer education course. Buyers with a credit score of 680 or higher may complete this online, while those with a score below 680 typically need in-person counseling.

Step 4: Find an approved lender

You’ll need to apply through a PHFA-participating lender. It’s a good idea to compare lenders and get preapproved before starting your home search.

Step 5: Start your home search

Once preapproved, you can begin working with a real estate agent to find a home and submit offers.

Understanding Pennsylvania first-time homebuyer down payment assistance (DPA)

Down payment assistance (DPA) programs can help Pennsylvania homebuyers cover upfront costs like their down payment and closing fees. In fact, 65 out of 76 programs in the state had available funding as of Q4 2025, according to Down Payment Resource’s Homeownership Program Index. Here’s how the most common types of assistance work.

Deferred second mortgage

Requires repayment? Yes

A deferred second mortgage provides funds upfront to help cover down payment or closing costs. It typically has no monthly payments, but must be repaid when you sell, refinance or pay off your first mortgage.

Forgivable second mortgage

Requires repayment? No (if requirements are met)

A forgivable loan doesn’t require repayment if you stay in the home for a set period. If you sell or refinance before that time, you may need to repay some or all of the balance. For example, the Keystone Forgivable in Ten Years Loan Program (K-FIT) is forgiven after 10 years.

Grant

Requires repayment? No

Grants provide funds for your down payment and closing costs and typically don’t require repayment. For example, the $500 PHFA Grant is available to buyers using the HFA Preferred (Lo MI) loan and doesn’t need to be repaid.

Mortgage credit certificate (MCC)

Requires repayment? No (if requirements are met)

A mortgage credit certificate (MCC) provides a federal tax credit based on the mortgage interest you pay each year. You must meet income and purchase price limits to qualify.

How much of a down payment do I need to buy a house in Pennsylvania?

Down payment amounts can vary widely depending on your loan type and financial situation. On average, first-time homebuyers in Pennsylvania put down about $58,677 in Philadelphia and $36,365 in Pittsburgh in 2025, according to LendingTree data.

Can you afford a home in Pennsylvania? Use our home affordability calculator to find out.

Can I qualify for down payment assistance in Pennsylvania?

Most programs require you to meet income limits, purchase price caps and minimum credit score requirements. You’ll also need to qualify for a first mortgage and, in some cases, complete a homebuyer education course.

How do I apply for Pennsylvania first-time homebuyer down payment assistance?

To apply, you’ll need to work with a PHFA-participating lender, apply for a first mortgage and meet program requirements. Some assistance is provided as grants (no repayment), while others come as loans that must be repaid over time.

Other first-time homebuyer loan programs

Here are the home loans to consider when applying for a first mortgage through the state of Pennsylvania.

Conventional loans

Conventional loans aren’t backed by the government and typically require a credit score of at least 620. They allow down payments as low as 3%, but require private mortgage insurance (PMI) if you put down less than 20%.

FHA loans

FHA loans are backed by the Federal Housing Administration (FHA) and are designed for buyers with lower credit scores or limited savings. You may qualify with a score as low as 580 and a 3.5% down payment, but mortgage insurance is required for the life of the loan.

VA loans

VA loans are available through the U.S. Department of Veterans Affairs (VA) to eligible military members, veterans and surviving spouses. They offer 0% down payment and typically have lower interest rates and no ongoing mortgage insurance, though an upfront funding fee applies.

USDA loans

USDA loans are available through the U.S. Department of Agriculture (USDA) and are designed for low- to moderate-income buyers in eligible rural areas. They require no down payment, but income limits and location restrictions apply.

What are the best first-time homebuyer loans?

The best loan for you depends on your credit score, income and savings. Use the chart below to find the option that fits your situation.

Home price trends in Pennsylvania’s major areas

Like much of the country, home prices in Pennsylvania have increased in recent years, though growth varies by region. According to data from the Federal Housing Finance Agency (FHFA), some metro areas have seen stronger gains than others.

In recent metro-area trends, home prices rose 5.13% year over year in Philadelphia, 4.74% in Pittsburgh and 6.78% in Scranton–Wilkes-Barre.

What are the current mortgage rate trends in Pennsylvania?

Mortgage rates in Pennsylvania have remained elevated in recent years, generally tracking national trends. While rates are lower than recent peaks, they are still higher than the historically low levels seen during the pandemic.

LendingTree’s latest forecast suggests rates may ease slightly but remain above 6% through 2026, with gradual stabilization expected over time.