12/18/2023
Buying a home for the first time can be exciting but also difficult. First-time homebuyers in Pennsylvania face several important decisions. Not only do they have to choose a home, they also have to learn about loan options and assistance programs.
Therefore, in this article, we are going to explain the different types of help available to first-time home buyers in Pennsylvania. This way, those who are thinking about buying a property will know what options are available to them.
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State programs for first-time homebuyers in PA
If you're looking to buy a home for the first time in Pennsylvania, you're not alone. The state offers a variety of financial assistance programs that can help you make your dream of homeownership a reality.
From mortgage loans with competitive interest rates to tax credits, there are options available to suit your individual needs and circumstances.
Here are some of the most prominent:
Keystone Home Loan Program.
An exclusive product for first-time homebuyers, area buyers and qualified veterans. This program has income limits, maximum purchase price and credit restrictions.
You can learn more about this program and verify your eligibility by visiting the official Pennsylvania Housing Finance Agency (PHFA) website.
Keystone Forgivable in Ten Years Loan Program (K-FIT)
This plan provides a second mortgage to eligible homebuyers for up to 5% of the purchase price or appraised value, whichever is less.
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This loan is used to help with down payment and closing costs. It is important to note that this program can only be used in conjunction with the Keystone Mortgage Loan Program.
Mortgage Tax Credit Certificate
The Mortgage Tax Credit Certificate (MCC) issued by PHFA allows first-time homebuyers to apply for a tax credit. This can range from 20% to 50% of the mortgage interest paid annually, up to a maximum amount of $2,000 per year.
This certificate can be used in conjunction with the HFA Preferred Loan, the Keystone Government Loan, or a Keystone Advantage Assistance Loan. However, it cannot be combined with the Keystone mortgage loan.
Provides up to $10,000 in an interest-free second mortgage loan. This is for first-time homebuyers who participate in PHFA's Keystone mortgage loan program and meet the income and purchase price limits established by the county.
This loan offers the possibility of gradually reducing the debt over a five-year period, with an annual reduction percentage of 20%, provided certain obligations are met. It should be noted that this plan is limited to certain counties that have not yet received their share of allocated federal funds.
Locations with Homebuyer Assistance Programs in PA
These programs vary by location. Below is a list of some locations that offer assistance programs:
Counties
- Allegheny
- Berks
- Bucks
- Chester
- Cumberland
- Dauphin
- Delaware
- Lancaster
- Luzerne
- Montgomery
- Washington
Cities
- Philadelphia
- Pittsburgh
- Scranton
- State College
- Upper Darby
- Williamsport
Who qualifies as a first-time homebuyer in Pennsylvania?
According to the Pennsylvania Housing Finance Agency (PHFA), a person is considered a first-time homebuyer if that person has not owned a home within the past three years, considering it to be his or her primary residence.
However, there are exceptions for repeat buyers purchasing in designated target areas and for certain qualified veterans. It is important to review each program's guidelines for specific eligibility requirements and applicable exceptions.
Credit Report Review and Pre-Approval
Before you begin the home buying process, it is important to review your credit report and correct any errors that may affect your credit rating. You can obtain a free copy of your credit report through the three major credit reporting agencies: Equifax, Experian and TransUnion.
Once you've reviewed your credit report and are confident that it's accurate, consider getting a loan pre-approval. This will give you an idea of how much money you might be able to get and help you determine the price range of homes you can consider.
Also, having a pre-approval can make your offer more attractive to sellers and real estate agents.
Español: Ayudas para primeros compradores de casa en Pennsylvania