First Time Home Buyer PA: Programs, Grants & PHFA Guide

Quick answer: As a first time home buyer in PA, your main options are the Pennsylvania Housing Finance Agency's (PHFA) loans (Keystone Home Loan, Keystone Government, HFA Preferred and Keystone Flex) and its down payment and closing cost help: Keystone Advantage (up to 4% of the price or $6,000, whichever is less), K-FIT (5%, forgiven over 10 years) and K-DATE. In Philadelphia, the Philly First Home program offers a grant of up to $10,000 or 6% of the price, whichever is less. You can also use standard FHA, VA, USDA and low-equity conventional loans. Income limits, price limits and counseling rules apply, and they change, so check the current figures before you count on any of them.

Buying your first home in Pennsylvania can feel like reading a menu in another language. Keystone this, K-something that, a "$10,000 grant" a friend mentioned. This guide sorts it out: what each program actually is, who it's for, the current limits as of November 2026, and how to work out which mix makes sense for you.

One note before we start. MortgageCS is a mortgage broker, not a PHFA or PHDC participating lender. We don't originate PHFA loans or Philly First Home grants, and this guide is purely educational. What we can do is shop FHA, VA, conventional and other loans across multiple lenders, and show you side by side how a PHFA option compares with what we find.

Who counts as a first-time home buyer in Pennsylvania?

Most programs define a first-time buyer as someone who hasn't owned their principal residence in the past three years. That means you can qualify again if you owned a home years ago, sold it and have been renting since.

A few programs don't require first-time status at all. PHFA's HFA Preferred, Keystone Government and Keystone Flex loans are open to repeat buyers, and the Keystone Home Loan waives the first-time rule for veterans and for homes in designated "target" counties or areas.

PHFA loans: the state's main first-time buyer programs

PHFA offers fixed-rate first mortgages through a network of approved participating lenders. You apply with one of those lenders, and PHFA usually services the loan afterward. Here are the four first mortgage programs.

Keystone Home Loan

This is PHFA's classic first-time buyer loan. It can be conventional (insured by PHFA's own mortgage insurance fund), FHA, VA or USDA Rural Development. To qualify you generally need to:

Be a first-time buyer, a discharged veteran, or buying in a target county or area
Stay under PHFA's household income limit and purchase price limit for your county
Have acceptable credit (660 minimum for PHFA's conventional insured version) and enough funds for closing costs

For reservations on or after July 1, 2026, PHFA's published Keystone Home Loan limits include:

County (examples)	Max purchase price	Income limit, 1–2 people	Income limit, 3+ people
Bucks, Chester, Delaware, Montgomery	$588,800	$122,700	$141,100
Philadelphia (target area)	$730,600	$147,200	$171,700
Allegheny	$523,000	$110,400	$126,900
Lehigh, Northampton, Berks	$499,900	$106,000	$121,900

Source: PHFA Appendix A, effective for reservations on or after 7/1/2026. Some non-target counties include targeted census tracts with different limits.

Keystone Government Loan (K-Gov)

An FHA, VA or USDA loan underwritten to that agency's own rules. PHFA doesn't add its own income or price limits (FHA and VA loan limits and USDA income limits still apply), and you don't need to be a first-time buyer. It pairs with Keystone Advantage assistance.

HFA Preferred (conventional)

A conventional fixed-rate loan with reduced-cost private mortgage insurance. It has income limits but no PHFA purchase price limit and no first-time buyer requirement. PHFA requires a minimum contribution from your own funds, and two-unit homes aren't eligible.

Keystone Flex with K-FIT

A first mortgage (conventional, FHA, VA or USDA) paired with K-FIT assistance. It has its own income and price limits, requires a 660 minimum credit score for all borrowers, and doesn't require first-time buyer status. Conventional and FHA borrowers must make a minimum contribution from their own funds, which PHFA sets.

PHFA down payment and closing cost assistance

PHFA assistance comes as a second mortgage, not free cash. The differences come down to how (and whether) you pay it back.

Program	How much	Repayment	Pairs with	Min. credit score
Keystone Advantage Assistance	4% of price or value, max $6,000	Repaid in monthly installments on terms PHFA sets	Keystone Home, K-Gov, HFA Preferred	660
K-FIT (Keystone Forgivable in Ten Years)	5% of price or value, no dollar cap	Forgiven 10% per year over 10 years; prorated payback if you sell, transfer or move out early	Keystone Home, Keystone Flex	660
K-DATE (Keystone Due at Time of Expiration)	8% if the first mortgage is $150,000 or less; 5% if higher	Due in full when you sell, refinance or pay off the first mortgage	Keystone Home, Keystone Flex	660

Source: PHFA "Subordinate Loan Programs at a Glance," August 2026.

A few rules worth knowing:

Liquid asset cap. For Keystone Advantage, K-FIT and K-DATE, your liquid assets can't exceed $50,000 after the money you need to close.
One assistance program at a time. PHFA assistance programs generally can't be stacked with each other (the Access Home Modification loan for accessibility work is the exception).
Homebuyer education. If any borrower has a credit score below 680, face-to-face counseling with a PHFA-approved agency is required. If everyone is at 680 or higher, one borrower can take the online course.

What about the PHFA loan interest rate?

PHFA sets its own rates, and they change often. A PHFA loan isn't automatically the cheapest option. Once you add mortgage insurance, the assistance terms and fees, a standard FHA or conventional loan with a seller credit or a family gift sometimes costs less overall. The only way to know is to compare Loan Estimates for the same price and the same amount of cash in.

The Philly First Home program (the "$10,000 grant")

When people search for a "first-time home buyer PA $10,000 grant," this is usually what they mean. Philly First Home is run by the City of Philadelphia through the Philadelphia Housing Development Corporation (PHDC). It offers a grant of up to $10,000 or 6% of the purchase price, whichever is less, for down payment, closing costs or reducing principal.

Key requirements (as published by PHDC and the City):

The home must be a single-family home or duplex in Philadelphia. Condos aren't eligible.
You must be a first-time buyer or haven't owned a home in the past three years.
You must complete one-on-one counseling with a City-funded housing counseling agency before you sign an agreement of sale. This is the step people miss most often.
Household income must fall under the program limits.
The City says the grant must be repaid if you move or refinance within 15 years, and grants are given while funding lasts.

Household size	Max annual household income
1	$85,900
2	$98,200
3	$110,500
4	$122,700
5	$132,600
6	$142,400
7	$152,200
8	$162,000

Source: PHDC Philly First Home income guidelines, as listed in November 2026.

Timing matters. Guidance published by a City-funded counseling agency says that starting June 1, 2026, complete Philly First Home applications must be submitted at least 35 days before settlement. Build that into your contract dates. If you're combining Philly First Home with another grant, PHDC asks you to confirm with your housing counselor that the programs are compatible.

Once you own your Philadelphia home, don't forget to apply for the City's Philadelphia Homestead Exemption, which lowers the assessed value used for your Real Estate Tax.

Outside Philadelphia? Some counties and municipalities run their own assistance programs, and availability changes with funding. Fannie Mae's and Freddie Mac's down payment assistance search tools are a good place to look. We've linked them on our homebuyer grant programs page.

Other loan options for first-time buyers in PA

State programs aren't the only route. Many Pennsylvania first-time buyers end up with a standard loan because it fits their situation better:

FHA loans: Allow high loan-to-value ratios and more flexible credit guidelines. See our FHA loan overview.
Low-equity conventional loans: Programs like Fannie Mae HomeReady and Freddie Mac Home Possible allow loan-to-value ratios up to 97% for eligible buyers, and the mortgage insurance can be removed later as you build equity.
VA and USDA: Financing up to the full value of the home for eligible veterans and service members (VA) and for eligible buyers in qualifying rural areas (USDA).
Combining grants with high-LTV loans: Some buyers pair assistance with these loans to keep their cash to close as low as possible. Our 100% financing guide walks through how that can work.

Also check your county's conforming loan limits if you're shopping at higher price points. They decide whether a loan is conforming or jumbo.

How to choose: PHFA vs. a standard loan

Ask yourself these questions:

Am I under the income and price limits for my county? If not, Keystone Home and K-FIT are off the table, though K-Gov may still work.
How much cash do I have? If you're short on funds to close, assistance can bridge the gap. If you have more than $50,000 liquid after closing, Keystone Advantage, K-FIT and K-DATE won't be available.
How long will I stay? K-FIT is forgiven over 10 years, and K-DATE is due when you sell or refinance. If you expect to move or refinance soon, factor in the payback.
What's the total monthly cost? Compare the full payment, including principal, interest, taxes, insurance and mortgage insurance. (New to the acronym? Here's what PITI means.)
What's the total cash to close? Line up the Loan Estimates and compare them side by side.

Step-by-step: getting started as a first time home buyer in PA

Check your credit and budget. Know your score, your monthly debts and the payment you're comfortable with, not just the maximum you could qualify for.
Take homebuyer counseling early. It's required for many programs, and for Philly First Home it must happen before you sign an agreement of sale.
Get prequalified. A prequalification shows sellers you're serious and tells you what price range works.
Compare options side by side. Ask a PHFA participating lender for a PHFA quote, and ask a broker like MortgageCS to shop FHA, conventional or VA. Compare rate, APR, mortgage insurance, fees and cash to close.
Write grant timelines into your contract. Give yourself enough time before settlement for any grant approvals.

Frequently asked questions

What is the $10,000 first-time home buyer grant in PA?

It's usually the Philly First Home program, a City of Philadelphia grant of up to $10,000 or 6% of the purchase price, whichever is less. It's only for single-family homes or duplexes in Philadelphia, requires City-funded counseling before you sign an agreement of sale, and has income limits. It's not a statewide program.

What credit score do I need for a PHFA loan?

PHFA's Keystone Advantage, K-FIT and K-DATE assistance programs require a minimum credit score of 660 for all borrowers, as does PHFA's conventional insured Keystone Home Loan. FHA, VA and USDA versions follow those agencies' guidelines plus any lender requirements. Borrowers below 680 must also complete face-to-face homebuyer counseling.

Is PHFA down payment assistance free money?

Usually not. Keystone Advantage is a second mortgage that you repay in monthly installments on terms PHFA sets. K-FIT is forgiven 10% per year over 10 years, but you repay a prorated amount if you sell or move out early. K-DATE has no monthly installments but is due in full when you sell, refinance or pay off the first mortgage.

What are the PHFA income limits in Bucks County?

For Keystone Home Loan reservations on or after July 1, 2026, PHFA lists a $588,800 maximum purchase price in Bucks County, with income limits of $122,700 for one- to two-person households and $141,100 for households of three or more. Other PHFA programs have different limits.

Do I have to be a first-time buyer to use PHFA programs?

Not always. HFA Preferred, Keystone Government and Keystone Flex don't require first-time buyer status. The Keystone Home Loan does, unless you're a discharged veteran or buying in a target county or area. PHFA defines a first-time buyer as someone who hasn't owned their principal residence in the past three years.

Can MortgageCS help me with a PHFA loan?

MortgageCS isn't a PHFA participating lender, so we don't originate PHFA loans. We can compare a PHFA quote you get from a participating lender against FHA, conventional, VA and other loans we shop across multiple lenders, so you can see which option costs less overall.

Talk to a MortgageCS loan officer

Comparing programs is a lot easier with someone who does it every day. MortgageCS is a Newtown, PA–based Pennsylvania mortgage broker that shops multiple lenders for you, and we're happy to run your numbers next to any PHFA or grant option you're considering. Program terms and eligibility are set by the agencies that run them, and every loan is subject to credit approval.

Schedule a quick call with our team, start your prequalification, or call or text (215) 987-2602.

Sources

Any examples, rates, or payment amounts shown are for illustrative purposes only and may not reflect current market conditions.
Please refer to our advertising disclosures for more information.

Pennsylvania First-Time Home Buyer Programs (PHFA, Philly First Home, $10K Grants)