Programs, Resources Available for Prospective Homebuyers in Pennsylvania

Written by: Alan Nochumson

As the real estate market continues to rapidly change, many prospective homebuyers are wondering if it is a good time to acquire real estate with rising interest rates and inflation.

However, for prospective homebuyers in Pennsylvania there are many governmental programs and resources that can assist them with the real estate acquisition. These programs and resources described in this article require a combination of an approved homeownership course, financial counseling, meeting income guidelines, and a program application before closing can occur or even prior to the signing of the agreement of sale.

The following governmental programs exist in Pennsylvania:

PHFA Grant

Down payments and closing costs can be the biggest hurdle many homebuyers face when they purchase a personal residence for themselves.

To assist homebuyers with this issue, the Pennsylvania Housing Finance Agency (PHFA) offers grants of $500 to help with a down payment and closing costs when obtaining a loan through PHFA’s preferred home purchase loan program.

This grant does not require repayment and is currently offered year-round.

Keystone Advantage Assistance Loan Program

The Keystone Advantage Assistance Loan Program provides a second mortgage loan to help with the costs associated with the purchase of a personal residence.

Qualified homebuyers can receive a loan up to the lesser of 4% of the purchase price or personal residence’s market value or $6,000 that can then be applied toward a down payment or closing costs.

This mortgage loan must be repaid monthly and will amortized over a 10-year term at a rate of interest of 0%.

Under this governmental program, the prospective homebuyer must meet the following requirements:

  • A minimum credit score of 660.
  • Assistance under this program can only be used for the minimum required down payment or closing costs.
  • The minimum loan amount is $500.
  • The liquid assets of the prospective homebuyer may not be greater than $50,000 after deducting the funds needed to close on the mortgage loan.
  • The mortgage loan may not be combined with any other PHFA-assistance programs, with the exception of the Access Modification Loan Program.
  • The mortgage loan may be used on conventional, FHA, VA or RD loans, with all applicable underwriting requirements applying, including, but not limited to, loan-to-value and down payment requirements.

Keystone Forgivable in 10 Years Loan Program

The Keystone Forgivable in 10 Years Loan Program (K-FIT) is available for qualified homebuyers to provide assistance toward down payment and closing costs.

This governmental program provides a second mortgage loan up to 5% of the lesser of the purchase price or the property’s appraised value with no maximum dollar limit toward assistance of the down payment and closing costs.

A loan administered under K-FIT is forgiven over 10 years at a rate of 10% per year.

The eligibility requirements under K-FIT are the same as the Keystone Advantage Assistance Loan Program. In addition, a homebuyer obtaining loan proceeds from K-FIT must complete homebuyer education counseling regardless of their credit score.

Mortgage Tax Credit Certificate

A PHFA Mortgage Credit Certificate (MCC) allows homebuyers to claim a tax credit of 20% to 50% of their mortgage interest paid per year capped at $2,000 annually. This limited tax credit is an offset against ordinary income, permitting qualified homebuyers to reduce, on a dollar-for-dollar basis, their federal income tax liability.

The MCC is a potential annual credit for the life of the original mortgage so long as the property remains owned and occupied by individuals who utilize the property as their principal residence. The credit cannot exceed the amount of federal tax owed after all other credits and deductions have been taken into account.

In order to be eligible under this program, the homebuyer and all other adults who intend to live in the property within 12 months from closing must be first-time homebuyers.

Furthermore, the gross annual household income for all adults who intend to occupy the property within 12 months from closing must adhere to the income limits set forth under the Keystone Home Loan Program. To illustrate, as of Aug. 1, in Philadelphia, the income limit for a one- or two-member household is $126,000 while the income limit for a three- or more-member household is $147,500.

Additionally, the purchase price of the property cannot exceed the purchase price limit set forth under the Keystone Home Loan Program. To illustrate, as of Aug. 1, the purchase price limit in Philadelphia is $484,600 for a single-family dwelling.

To claim the credit, the homeowner must complete and submit IRS Form 8396 along with their federal tax returns.

Employer Assisted Housing Initiative

PHFA offers the Employer Assisted Housing Initiative (EAH) to help address the lack of affordable housing for low- to moderate-income households.

Participating employers, who offer a monetary home purchase benefit to their employees, partner with PHFA to make home-buying more realistic for their employees. Although the participating employer’s benefits do not have to be contingent on a mortgage loan through PHFA, if the employee is approved for such a mortgage loan, the employee receives substantial financial advantages at no cost to the participating employer.

Homebuyers working at a participating employer can receive a Keystone Advantage Assistance Loan of up to $8,000 to assist in down payment and closing costs in the firm of an interest-free loan amortized over 10 years.

These are the following governmental programs available in Philadelphia:

Philly First Home Program

This governmental program offers an assistance grant of up to $10,000 or 6% of the purchase price, whichever is less, to help first-time homebuyers reduce the principal, cover down payment and closing costs.

To be eligible for this governmental program, the prospective homebuyer must be a first-time homebuyer (which is defined as also not owning a personal residence in the past three years) and complete a homeownership counseling program before signing the written agreement of sale for the property.

The property must not only be located in Philadelphia but is limited to a single-family dwelling or a duplex (but may not consist of a condominium).

There are income limits for this governmental program depending upon the family size. To illustrate, the maximum annual household income ranges from $73,800 for a family size of one to $139,500 for a family size of eight (with $8,450 added per person for a family size that exceeds eight individuals).

According to the city’s website, if the homebuyer “moves or refinances before living in the home for 15 years, the grant must be repaid.”

Philadelphia Home.Buy.Now Program

According to the website of the city of Philadelphia’s Division of Housing and Community Development (DHCD), “Philadelphia Home.Buy.Now provides participating employers a menu of housing-related benefits to offer their employees—the key feature of Philadelphia Home.Buy.Now is the financial assistance an employer provides to their employee, making them eligible for a dollar-for-dollar matching grant up to $4,000 to help cover down payment and closing costs.”

For example, if the employer gives the employee $4,000 to purchase a property, this governmental program will provide the employee with a matching grant of $4,000.

Our law firm, Nochumson P.C., is a participating employer of this governmental program. In doing so, our law firm provides a forgivable loan of $4,000 to eligible employees that loan will be forgiven by $1,000 for each year the eligible employee is employed at our law firm.

Under this governmental program, employees must receive a minimum of $500 from their employer and the property must be located in Philadelphia.

Philadelphia Home.Buy.Now is funded by PHFA and DHCD. The Community & Economic Development (CED) Department of the Urban Affairs Coalition (UAC) administers this governmental program.

Employees seeking a matching grant must be below 115% area medium income as set by DHDC. According to DHCD’s website, this income ranges from $84,850 for a household size of one to $160,000 for a household size of eight.

In addition to the aforementioned governmental programs, many financial institutions in the Philadelphia region also offer incentives to first-time homebuyers:

First Front Door Program

Although funds for the First Front Door Program has been depleted for 2022, this program will be back in 2023.

This program offers first-time homebuyers grants for up to $5,000 in cash for a down payment or closing costs.

To qualify, the prospective homebuyer must:

  • Be a first-time homebuyer obtaining a conventional mortgage (which means the prospective homebuyer has not owned a personal residence within the past three years);
  • Contribute personal funds as part of the down payment and closing costs;
  • Have household income at or below 80% of the area median income at the time of registration;
  • Complete at least four hours of homeownership counseling, including the topic of predatory lending, prior to the purchase of the property;
  • If a student, work at least 30 hours a week; and close the mortgage loan with a financial institution that has received approval from Federal Home Loan Bank for this grant.


The Neighborhood Lift program offers homebuyer education plus $15,000 for eligible homebuyers to use toward their down payment or closing cost on qualified homes.

In order to submit a request for the NeighborhoodLIFT program, the prospective homebuyer must:

  • Complete eight hours of homebuyer education with an agency that is eligible for the program;
  • Meet the income requirements for the program.

According to this program, the homebuyer’s annual income must be at or below $54,000.

The properties eligible under this program include properties not exceeding four dwelling units and may be a part of a condominium, co-op, planned community, land trust or qualified manufactured home.


Victor Adeniran, a second-year law student at Villanova University’s Charles Widger School of Law, who is interning at the firm, assisted in the preparation of this article.

Alan Nochumson is the sole shareholder of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Nochumson is a frequent author and lecturer on issues commonly confronting businesses, individuals and professionals. You can reach him at 215-399-1346 or

Alex Goldberg is an associate attorney at the firm. You can reach him at 215-399-1346 or

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