Buying a Home in Pennsylvania? Start Here.

Home of the Liberty Bell and cheesesteaks, Pennsylvania is a place where several individuals find their dream home. If you’re thinking about buying a home in the Keystone State, we want to let you know that the state of Pennsylvania offers several programs that can help people become homeowners. In this post read about how the Pennsylvania Housing Finance Agency can help you achieve homeownership.  

What is the Pennsylvania Housing Finance Agency?

The Pennsylvania Housing Finance Agency (PHFA) was created in 1972. The goal of this agency is to assist those with low-to-moderate income, older adults, and people with special housing needs achieve homeownership. By managing and investing in mortgage programs and multifamily housing developments, the PHFA helps several people achieve homeownership. Over the past 45 years, this program has helped accumulate more than $14 billion in funding for over 150,000 single-family home loans. In addition to their core home buying programs, PHFA encourages counseling and education for homebuyers and renters.

Pennsylvania Housing Homebuyer Program

From those with low-to-moderate income to those with special housing needs and everything in between, the Pennsylvania Housing Homebuyer Program offers an abundance of programs that may help you become a homeowner. To see if you qualify, you have to get approved by a homebuyer counselor and one of their participating lenders. If you are someone who has a FICO score that is lower than a 680 you have to complete a course in-person before the closing of your loan. For those who are eligible for a home loan, below are few of the benefits that are associated with it:

• Down payment and closing cost assistance for qualifying individuals
• 30-year, fixed-rate terms
• Competitive interest rates
• Fewer fees
• Special programs for persons with disabilities

It’s important to note that the PHFA does not deal with the mortgage application process directly. You must go through one of their participating lenders to do so. To help you get into your dream home, PHFA offers several purchase assistance programs, which we cover below.

Keystone Advantage Assistance Loan Program

The Keystone Advantage Assistance Loan Program helps by offering a second mortgage loan. This money can be used to help you cover the the costs associated with the purchase of a home. Here are a few of the requirements you must meet to qualify:

• A minimum credit score of 660
• Only the minimum required down payment and/or closing costs can be used for assistance
• $500 minimum loan amount
• If you’re a borrower(s) your liquid assets cannot be more than $50,000 after deducting the funds needed to close on the loan 
• Aside from the Access Modification Loan Program, the Keystone Advantage Assistance Loan Program may not be combined with other PHFA assistance programs

In addition, the Keystone Advantage Assistance Loan Program can be used in conjunction with the HFA Preferred™(Lo MI), Keystone Government Loan, and Keystone Home loan programs.

Mortgage Credit Certificate

A PHFA Mortgage Credit Certificate (MCC) allows homebuyers to claim a percentage of their tax credit associated with the mortgage interest paid every year. This limit is capped at $2,000 per year and it’s a dollar-for-dollar reduction that goes against your federal tax liability. This assistance program can be used in conjunction with the following PHFA home loan programs: HFA Preferred, Keystone Government Loan, and a Keystone Advantage Assistance Loan. To view a full list of requirements for this purchase assistance option please visit https://www.phfa.org/programs/assistance.aspx.

HOMEstead Downpayment and Closing Cost Assistance

The HOMEstead program was created to help potential homebuyers pay their down payments and closing costs. Those who qualify can receive up to $10,000 in assistance that comes in the form of a no-interest, second mortgage loan. The minimum loan amount one can receive is $1,000. 

Borrowers looking to apply for this loan must meet the minimum down payment requirement based on whoever is insuring or guaranteeing the loan. The funds from this purchase assistance program may provide the remainder of the down payment and the closing costs. PHFA HOMEstead funding is therefore allocated to eligible homebuyers on a first-come, first-served basis.

The PHFA also offers additional purchase assistant programs as well as refinance options certain individuals may be able to take advantage of. To see a complete list of options, please visit https://www.phfa.org/homebuyers/.

Offering several benefits like down payment and closing cost assistance, the PHFA may be the perfect solution for those looking to buy a home in the Keystone state. If you’re considering purchasing a home in Pennsylvania and want to learn more about the PHFA and what they have to offer, contact one of our expert loan officers today!