First Time Home Buyer Programs in PA: PHFA and Philly First Home

If you are renting in Philadelphia or the suburbs and the down payment is the thing standing between you and a house, there is real money on the table from the state and the City. The catch is that each program has its own rules, and you have to line them up before you sign an agreement of sale, not after.

What first time home buyer programs are available in PA?

The core first time home buyer programs in PA come from the Pennsylvania Housing Finance Agency (PHFA). PHFA offers first mortgages, mainly Keystone Home, Keystone Government, and HFA Preferred, plus down payment and closing cost help: K-FIT, K-DATE, Keystone Advantage, and a $500 PHFA Grant. Philadelphia buyers can also look at the City's Philly First Home grant.

Here is how the main assistance programs compare, using the terms PHFA and PHDC list on their sites as of October 2026. These change, so confirm current terms with a participating lender.

PHFA's assistance loans (K-FIT, K-DATE and Keystone Advantage) can only be used for the minimum required down payment and closing costs, and they require a 660 minimum credit score and cap liquid assets after closing at $50,000. The $500 PHFA Grant has its own rules and goes with the HFA Preferred loan, so check its terms separately.

How does PHFA down payment assistance work?

PHFA assistance is a second loan that sits behind a PHFA first mortgage and covers your minimum down payment and closing costs. You do not apply to PHFA directly. You apply through a PHFA participating lender, who matches you with a first mortgage and the assistance product that fits your price, credit, and savings.

The math matters more than the names. On a hypothetical $250,000 rowhome in Mayfair:

• K-FIT: 5% of $250,000 is $12,500. PHFA forgives it at 10% a year, so after ten years in the home the balance is gone. Read your loan documents for what happens if you sell or refinance before year ten.
• K-DATE: The first mortgage would be over $150,000, so the 5% tier applies, also $12,500, but with no monthly payment and the full balance due when you sell, refinance, or pay off the first mortgage.
• Keystone Advantage: 4% of $250,000 is $10,000, so the $6,000 cap applies. You repay it monthly at 0% over ten years, which is $50 a month.

Keep in mind the assistance is capped at what you actually need for the minimum down payment and closing costs. A bigger number on paper does not mean you get a bigger check.

Who qualifies as a first time home buyer in PA?

For PHFA's Keystone Home Loan, a first time buyer is someone who has not owned, meaning had title to, a principal residence in the previous three years. The rule is waived in a targeted county or area, or for a discharged veteran. Other PHFA loans, like HFA Preferred and Keystone Government, have no first time buyer requirement.

That three year rule surprises people. If you owned a house five years ago and have rented since, you can count as a first time buyer again. Philly First Home uses the same idea: you must be a first time buyer or not have owned a home in the past three years.

Other common requirements:

• Income and price limits. They depend on the loan. Keystone Home and Keystone Flex loans have county based income and purchase price limits that PHFA publishes on its site, while the Keystone Government loan has no PHFA-specific income or price limits (FHA, VA and RD rules still apply). Limits change, so your lender should check the right ones against your household.
• Credit. 660 minimum for the PHFA assistance loans above.
• Homebuyer education. PHFA requires it for HFA Preferred and the Keystone Flex products. Borrowers under a 680 score usually need face to face education from a PHFA approved agency.
• Occupancy. These are programs for a home you will live in, not a rental.

What is the Philly First Home program?

Philly First Home is a City of Philadelphia homebuyer grant run by PHDC. It pays up to $10,000 or 6% of the purchase price, whichever is lower, toward principal, down payment, and closing costs. You must be income eligible, buy a single family home or duplex in Philadelphia, and finish free housing counseling before you sign an agreement of sale.

As of October 2026, PHDC lists maximum household income of $85,900 for one person and $122,700 for a household of four, with higher limits for larger households. Income counts everyone who will live in the home. Condos are not eligible.

The counseling step is where buyers lose this grant. If you sign an agreement of sale first and then call a counseling agency, you may be too late. Start counseling with a City funded agency before you get serious about touring.

On a hypothetical $150,000 rowhome in Kensington, 6% is $9,000, which is lower than $10,000, so the grant would top out at $9,000. On a $200,000 house, 6% is $12,000, so the $10,000 cap applies.

How do I apply for first time home buyer assistance in PA?

You apply for PHFA assistance through a PHFA participating lender at the same time you apply for your mortgage. For Philly First Home, you start with a City funded housing counseling agency. In both cases the work happens before the agreement of sale, so the order of steps is what protects your eligibility.

Here is the order I give buyers:

1. Talk to a PHFA participating lender. Get pre approved and ask which PHFA first mortgage and assistance product fits you.
2. If you are buying in Philadelphia, call a City funded housing counseling agency. Start Philly First Home counseling before you write any offer.
3. Take the required homebuyer education. Your lender will tell you which course counts.
4. Set a price range that fits the program limits. Purchase price and income limits apply.
5. Shop for homes that fit the rules. For Philly First Home, that means a single family home or duplex in the city, no condos.
6. Write the offer with your financing spelled out. Sellers and their agents should see a clean, documented loan plan.
7. Get the house inspected. Assistance does not fix a bad roof. I came from the construction side, and I would rather walk away from a house with a failing foundation than stretch a grant to buy it.

If you are still sorting out where you can afford, my neighborhoods pages compare housing stock and price points across the city and suburbs.

What does assistance not cover?

Down payment assistance does not lower your monthly mortgage payment much, does not cover repairs, and does not remove your own cash needs entirely. Many programs require a minimum contribution from your own funds, such as the $1,000 PHFA lists for HFA Preferred. You still pay for inspections, appraisal, and moving.

Budget for the full cost of buying, not just the down payment. Transfer tax, title, lender fees, and prepaid taxes and insurance all show up at settlement. I walk through all of it in the guide to closing costs in PA. And once you own in Philadelphia, apply for the Homestead Exemption right away, which I explain in the guide to the Philadelphia Homestead Exemption.

The bottom line on first time home buyer programs in PA

First time home buyer programs in PA can cover most of a minimum down payment and closing costs, through PHFA products like K-FIT and K-DATE and, in Philadelphia, the Philly First Home grant. Line up a participating lender and counseling before you sign anything, confirm current limits, and have your lender verify that you qualify.