Pennsylvania’s PHFA is one of the more generous housing agencies in the Northeast, with a standout forgivable assistance loan — K-FIT — that provides 5% of the price with no dollar cap.
This guide covers what is actually available to first-time buyers in Pennsylvania in 2026 — the agency behind these programs, the loans and down payment help on offer, who qualifies, and how to apply. For the wider local picture, see our Pennsylvania first-time home buyer guide.
The PHFA and its home loan programs
Pennsylvania’s first-time buyer programs are run by the Pennsylvania Housing Finance Agency (PHFA). Like most housing finance agencies, it does not lend directly — instead it offers below-market first mortgages, bundled with down payment help, through a network of approved local lenders. Its main first-mortgage options are:
- Keystone Home Loan — 30-year fixed for first-time buyers (waived in target areas and for veterans)
- HFA Preferred — a conventional option with no first-time requirement
- Keystone Government Loan (K-Gov) — FHA, VA, and USDA financing
Most of these can be built on top of an FHA, VA, or USDA loan, or a conventional loan, depending on the product you pick — and the real value comes when you pair one with the down payment assistance below.
Down payment assistance in Pennsylvania
Down payment assistance is the heart of what PHFA offers, and Pennsylvania gives buyers more than one way to get it. PHFA offers a spread of assistance loans, including one forgivable option with no maximum dollar amount.
- K-FIT (Keystone Forgivable in Ten Years) — forgivable second (10% forgiven per year over 10 years), 5% of the lesser of purchase price or appraised value, with no maximum cap.
- Keystone Advantage Assistance Loan — repayable second at 0% interest (10-year term), up to 4% of the price or $6,000, whichever is less.
- HOMEstead Assistance — forgivable second at 0% (20% forgiven per year over 5 years), up to $10,000.
If those terms are unfamiliar, our national guide to down payment assistance explains exactly how grants, forgivable second mortgages, and deferred loans differ — and what each one means when you eventually sell or refinance.
How much help could you get?
On a $250,000 home in Pennsylvania, K-FIT’s 5% works out to about $12,500 — and because there is no dollar cap, the help scales with the price. It is forgiven 10% a year, so after ten years in the home you owe nothing. If you prefer a smaller, structured option, Keystone Advantage lends up to 4% or $6,000 at zero interest over ten years. Confirm current terms with PHFA, since limits shift by county.
Who qualifies in Pennsylvania?
Every program sets its own rules, and they change periodically, but the common requirements in Pennsylvania look like this:
- Income limits. PHFA sets income limits by county and household size.
- First-time status. The Keystone Home Loan requires first-time status (waived in target areas and for veterans); HFA Preferred and K-Gov do not.
- Credit score. Often around 660, though some products and assistance allow 620–640. Our guide to credit score requirements covers what moves the needle.
- Homebuyer education. Homebuyer education is required when using down payment or closing-cost assistance.
- Purchase price limits. PHFA purchase-price limits apply by county.
Pennsylvania programs worth knowing about
Beyond the standard offerings, Pennsylvania aims extra help at specific buyers and places. Watch for:
- HOMEstead — also serves buyers with disabilities
- Access Home Modification & Access Down Payment loans — for buyers with disabilities
- K-Gov — government loans including VA for veterans
Mortgage Credit Certificates in Pennsylvania
PHFA offers a Mortgage Credit Certificate that can be paired with a PHFA home loan. A Mortgage Credit Certificate is a federal tax credit worth a percentage of the mortgage interest you pay every year for the life of the loan, and where it is available it can usually be combined with the assistance above — putting money back in your pocket each tax season.
How to apply for Pennsylvania assistance
- Set your budget first. Our home affordability guide helps you land on a realistic price range before you start shopping.
- Complete a homebuyer education course. Nearly every Pennsylvania program requires one, and it is usually free and available online.
- Find a participating lender. Not every lender originates PHFA loans, so ask directly which PHFA programs a lender offers and have them run your numbers against a few.
- Get pre-approved and lock in the right program for your income, credit, and target home before you make an offer.
One important note: PHFA program funding and terms change from year to year, and some assistance rounds close when the money runs out. Always confirm current amounts and availability directly with PHFA before you count on a specific figure. Our first-time home buyer checklist keeps the rest of your process on track.
Pennsylvania first-time buyer programs FAQ
Do I have to be a first-time buyer to get assistance in Pennsylvania?
The Keystone Home Loan requires first-time status (waived in target areas and for veterans); HFA Preferred and K-Gov do not.
What credit score do I need for PHFA programs?
Often around 660, though some products and assistance allow 620–640. Keep in mind a program’s own minimum can sit above the loan’s floor, so confirm the exact number with your lender.
Can I use Pennsylvania assistance with an FHA, VA, or USDA loan?
Yes. PHFA assistance is built to layer on top of a first mortgage, and FHA, VA, and USDA loans are common partners because their own down payment requirements are already low. Your lender structures both pieces so they close together.
What makes PHFA’s K-FIT program stand out?
K-FIT provides 5% of the lesser of the purchase price or appraised value as a forgivable second, and unlike many programs it has no maximum dollar cap — so on higher-priced homes the assistance is larger. It is forgiven 10% per year over ten years, meaning you owe nothing if you stay the full term. Verify current eligibility and terms with PHFA.
City guides for Pennsylvania
Several Pennsylvania metros run their own local down payment programs on top of the statewide help above. See our city guides for Philadelphia.
More Pennsylvania city guides
Buying in a specific Pennsylvania metro? See our first-time buyer guides for Pittsburgh, each covering the city’s own local down payment programs.
Looking specifically for grants in Pennsylvania?
If you want to zero in on grant and forgivable money — the help you do not pay back — see our focused guide to first-time home buyer grants in Pennsylvania.