First-Time Buyer Assistance Programs Available in Pennsylvania

Buying your first home is a major milestone, and Pennsylvania offers a variety of programs designed to make homeownership more accessible and affordable. Whether you need help with a down payment, closing costs, or finding the right mortgage product, there are resources available to help you take that first step. John Smart, AI-Certified Agent with eXp Realty, has guided dozens of first-time buyers through these programs across Philadelphia, Montgomery, Bucks, Chester, Delaware, and Berks Counties.

This guide walks through every major assistance program available to first-time home buyers in Pennsylvania, including eligibility requirements, funding limits, and how to apply. Whether you are looking in Center City Philadelphia or the suburbs of Chester County, understanding these programs can save you thousands of dollars.

Schedule a free consultation with John Smart to discuss which assistance programs fit your situation.

The Pennsylvania Housing Finance Agency (PHFA) is the state's primary provider of affordable home financing. PHFA offers several programs specifically designed for first-time and repeat home buyers with moderate incomes.

PHFA Keystone Government Loan Program (K-GO)

The K-GO program offers FHA and USDA loans with PHFA assistance. Borrowers must meet income limits (typically $105,000 to $137,000 depending on county and household size) and purchase price limits (ranging from $268,000 to $350,000 depending on county). The program includes a 30-year fixed-rate mortgage with down payment and closing cost assistance of up to $10,000 in the form of a forgivable loan.

PHFA HFA Preferred Conventional Program

This program provides conventional loans (backed by Fannie Mae or Freddie Mac) with PHFA assistance. It offers up to $10,000 in down payment and closing cost assistance. Borrowers need a minimum 620 credit score and must complete a home buyer education course approved by PHFA.

PHFA HFA Preferred PLUS Program

The PLUS version offers the same benefits as HFA Preferred but allows for higher loan amounts and additional borrower flexibility. Up to $10,000 in assistance is available as a forgivable loan. No repayment is required if the borrower lives in the home for at least 10 years.

FHA loans are insured by the Federal Housing Administration and are one of the most popular options for first-time buyers. They require a down payment of just 3.5% and have more flexible credit requirements than conventional loans.

FHA Loan Requirements

• ✓ Minimum Down Payment: 3.5% with a credit score of 580 or higher. Borrowers with scores between 500-579 need 10% down.
• ✓ Mortgage Insurance: MIP is required for the life of the loan if the down payment is less than 10%. An upfront MIP of 1.75% of the loan amount is also required.
• ✓ Loan Limits: In Philadelphia and surrounding counties, the 2026 FHA loan limit for a single-family home is approximately $498,000.
• ✓ Property Requirements: FHA requires an appraisal and inspection to ensure the property meets minimum safety, security, and soundness standards.

FHA Loan Advantages

• ✓ Lower down payment than conventional loans (3.5% vs 5-20%).
• ✓ More forgiving credit requirements; scores as low as 580 may qualify.
• ✓ Can be combined with PHFA down payment assistance for even lower out-of-pocket costs.
• ✓ Gift funds from family members can be used for the down payment.

VA loans are available to eligible veterans, active-duty service members, and qualifying surviving spouses. These loans are backed by the U.S. Department of Veterans Affairs and offer some of the most favorable terms available.

• ✓ Zero Down Payment: No down payment required, making homeownership immediately accessible for eligible borrowers.
• ✓ No PMI: Unlike conventional and FHA loans, VA loans do not require private mortgage insurance, saving significant monthly costs.
• ✓ Competitive Interest Rates: VA loans typically offer lower rates than conventional and even some FHA loans due to the government backing.
• ✓ Flexible Credit Requirements: VA loans consider the whole financial picture rather than requiring strict credit score minimums.

USDA loans, backed by the U.S. Department of Agriculture, offer zero down payment financing for homes in eligible rural and suburban areas. Many areas in Pennsylvania qualify, including parts of Bucks, Chester, Montgomery, Delaware, and Berks Counties.

Beyond state and federal programs, many Pennsylvania counties and cities offer their own down payment assistance programs for first-time buyers.

Philadelphia-Specific Programs

The City of Philadelphia offers the Philadelphia Homeownership Program, which provides down payment and closing cost assistance to low- and moderate-income buyers. The program offers up to $15,000 in assistance in the form of a forgivable loan. Eligibility depends on income (typically below 80% of area median income) and completion of a home buyer education course.