Pennsylvania first-time homebuyer grants and down payment assistance (2026)

Which PHFA first mortgage unlocks which assistance

PHFA’s March 2026 overview pairs each first mortgage with specific second loans ⁠³:

Scroll the table sideways to see every column.

K-Flex limits are effective July 1, 2026 ⁠⁵. HFA Preferred limits apply to locks made on or after June 13, 2026 ⁠⁶. Keystone Government loan maximum is from the August 2026 Seller’s Guide ⁠⁷.

K-Flex is the route for repeat buyers who want K-DATE or K-FIT. It has no first-time requirement, and its single statewide limit counts only the borrowers’ qualifying income ⁠⁵⁠⁷. HFA Preferred is the only PHFA loan paired with a true grant, but that grant is $500. Buyers who finish in-person pre-purchase counseling before signing an agreement of sale can add a $300 closing-cost credit ⁠⁹.

K-DATE, K-FIT or Keystone Advantage: how each is repaid

PHFA lets you take only one of these three loans. The one exception is the Access Home Modification loan for buyers with disabilities ⁠²⁠⁷.

• K-DATE (deferred loan). The amount is 8% of the lesser of price or appraised value when the first mortgage is $150,000 or less. PHFA marks that tier “subject to availability.” On larger loans the amount is 5%, with no dollar cap. The loan is a 0% second mortgage with a 30-year term and no monthly payment. The full amount is due when you sell, refinance or pay off the first mortgage ⁠¹. PHFA launched it on May 1, 2026 ⁠¹¹.
• K-FIT (forgivable loan). The amount is 5% of the lesser of price or appraised value, with no dollar cap. It is forgiven at 10% a year over ten years. If you sell, transfer or move out early, you repay the unforgiven share ⁠². Refinancing also triggers repayment, because PHFA will not re-subordinate K-FIT or K-DATE. Any unforgiven balance must be paid off ⁠⁷.
• Keystone Advantage Assistance Loan (repayable loan). The amount is 4% of the price or $6,000, whichever is less. It carries 0% interest but is repaid in equal monthly payments over ten years. Lenders count that payment in your front-end ratio ⁠²⁠⁷. It is the only one of the three that also works with HFA Preferred and Keystone Government loans ⁠¹.

Here is a worked example. On a $140,000 home with a $135,000 FHA first mortgage, K-DATE could cover up to $11,200 (8%), while K-FIT would cap at $7,000. If you stay in the home seven years and then sell, you would repay the full K-DATE amount but only 30% of K-FIT ⁠¹⁠². All three loans can be used only for the minimum required down payment and closing costs, never for cash out. PHFA also requires maximum PHFA financing on the first mortgage ⁠⁷.

County income and price limits from July 1, 2026

The Keystone Home Loan uses a county table. In the “T” (targeted) counties and in targeted census tracts, the first-time rule is waived and the limits are higher ⁠⁴⁠⁸. Income counts every adult who will live in the home within a year of closing. Income of household members under 18, and of dependents in full-time undergraduate study, is excluded ⁠⁸.

Scroll the table sideways to see every column.

A duplex may cost up to 10% more than the single-unit cap, with a ceiling of $806,500 ⁠⁴.

To check your county, open Appendix A. Pages 3-6 list targeted census tracts inside non-targeted counties, including tracts in Allegheny, Berks, Dauphin, Erie, Lehigh and York counties. Enter the address in the FFIEC Geocoding/Mapping System to get its tract number ⁠⁴⁠⁸.

Credit score, debt-to-income and cash rules

For the first mortgage alone, PHFA’s floor is a 620 middle score. Conventional loans with PHFA’s own mortgage insurance (the Pennsylvania Housing Insurance Fund) need 660 ⁠³. Every borrower using K-DATE, K-FIT or Keystone Advantage needs 660 ⁠². The maximum debt-to-income ratio is 45% on FHA, VA and RD loans and 50% on conventional loans. On manually underwritten HFA Preferred loans, borrowers scoring 680-699 are capped at 36% ⁠³⁠⁷. Buyers with no credit score on a government loan may qualify with nontraditional credit at no more than 43% DTI ⁠³.

Two cash rules surprise buyers. First, you must put in the lesser of 1% of the loan or $1,000 on conventional and FHA purchases ⁠³. Second, your liquid assets after closing cannot exceed $50,000 if you take any of the three assistance loans ⁠⁷.

Homebuyer education PHFA will accept

PHFA pays for counseling at its approved agencies. The agency may still charge for a credit report ⁠¹⁰. Assistance-loan borrowers must complete education before closing whatever their score ⁠⁷:

• Any borrower with a middle score below 680: an in-person class or counseling session at a PHFA-approved agency. Online courses do not count ⁠⁷.
• All borrowers 680 or higher: only one borrower must complete it. That borrower may use the PHFA Online Homebuyer course, HomeView, a telephone session or an agency class ⁠⁷⁠¹⁰.

The certificate goes in the lender’s file to PHFA ⁠⁷.

What PHFA no longer offers: MCCs and HOMEstead

PHFA does not list a Mortgage Credit Certificate among its homebuyer programs ⁠¹. Its August 2026 Seller’s Guide covers MCCs only for reissuing an existing certificate after a refinance, once, for a $100 fee ⁠⁷. The HOMEstead Downpayment and Closing Cost Assistance Loan was a HOME-funded loan of up to $10,000. It is missing from PHFA’s August 2026 assistance overview and assistance page ⁠¹⁠², and its program page now returns “page not found.” Do not plan on either one. One federal rule still applies to the Keystone Home Loan: a recapture tax can be due if you sell within nine years. PHFA reimburses that tax for borrowers who applied on or after January 1, 2004 ⁠⁷.

Philadelphia and Pittsburgh programs that stack on top

• Philadelphia, Philly First Home (grant). Up to $10,000 or 6% of the price, whichever is lower, for a single-family home or duplex in the city (no condos). You must be a first-time buyer or not have owned a home in three years. You must finish one-on-one counseling at a city-funded agency before signing an agreement of sale. The income cap is $85,900 for one person, $122,700 for four and $162,000 for eight. The page does not post an open or closed notice, so your counselor confirms funding ⁠¹². The Turn the Key program adds up to $75,000 in mortgage buydown assistance on new homes built on city-owned land. It uses the same income table (100% of AMI), and several of its neighborhoods are marked sold out ⁠¹³.
• Pittsburgh, URA Down Payment and Closing Cost Assistance Program (deferred loan). First-time buyers under 80% of AMI can get up to $7,500 on a 0%, 5-year deferred loan. Buyers at 80% to 115% of AMI can get up to $5,000 on a 10-year term. No payments are due during the term as long as you meet the residency rules. The 2026 caps for four people are $88,300 (80%) and $126,960 (115%). Other rules: no more than $20,000 in liquid assets after closing, a HUD-certified first-time homebuyer course, and a closing fee of 2% of the URA loan. Its current application form is dated Sept. 25, 2026 ⁠¹⁴.

Check with your counselor that a city award is compatible before you combine it with a PHFA second mortgage ⁠¹².

Getting a PHFA loan with assistance, step by step

1. Pick the first mortgage first

   If you have owned a home in the last three years, use K-Flex or HFA Preferred, unless you are a veteran or are buying in a targeted area ⁠³⁠⁷.

2. Check limits for your county

   Use Appendix A (Keystone Home Loan), Appendix F (K-Flex) or Appendix B (HFA Preferred). Look up the property’s census tract if you are near the cap ⁠⁴⁠⁵⁠⁶.

3. Pull your credit and count your cash

   You need a 660 middle score for any assistance loan and $50,000 or less in liquid assets after closing ⁠²⁠⁷.

4. Book counseling

   Choose a PHFA-approved agency in your county. Go in person if any borrower is below 680 ⁠¹⁰. Philadelphia buyers should use a city-funded agency so the same session also qualifies for Philly First Home ⁠¹².

5. Choose a PHFA participating lender

   Find one on PHFA’s county lender list. The loan officer reserves the first mortgage and the assistance loan together in PHFA’s system ⁠⁷⁠¹⁵.

6. Gather documents

   Expect pay stubs, W-2s, bank and retirement statements (for the asset test), your counseling certificate, and discharge papers if you use the veteran exemption ⁠⁷.

7. Wait for PHFA’s pre-closing review

   PHFA’s Pre-Closing Package Review Results tell your lender whether the assistance was approved and for how much. Pittsburgh’s URA needs its application at least 21 business days before closing ⁠⁷⁠¹⁴.

8. Close and keep the second-mortgage note

   You will need it when you sell or refinance ⁠⁷.

PHFA does not publish processing times. If one lender declines you, you can apply through another participating lender. Call PHFA’s Customer Solutions Center at 1-855-827-3466 with questions ⁠¹. Rules in other states are on the first-time homebuyer grants page, and other Pennsylvania guides are on the Pennsylvania page.