Pennsylvania First-Time Home Buyer Guide 2026
This guide for Pennsylvania first-time home buyers covers PHFA’s K-FIT and Keystone Advantage down payment assistance, HOMEstead and the PHFA Grant, income limits by county, and step-by-step guidance for first-time buyers in Pennsylvania.
K-FIT Assistance Program
K-FIT (Keystone Forgivable in Ten Years) is Pennsylvania’s most generous PHFA down payment assistance program. It provides 5% of the purchase price or appraised value, whichever is less, structured as a forgivable second mortgage — forgiven at a rate of 10% per year, so it is fully forgiven after 10 years with no monthly payment.
| Feature | Detail |
|---|---|
| Assistance amount | 5% of purchase price or appraised value, whichever is less |
| Repayment | Forgiven 10% per year over 10 years; no monthly payment |
| Eligible first mortgage | Only available with a PHFA Keystone Home Loan |
| Min credit score | 660 |
| Purchase price / income limits | Set by PHFA and vary by county |
| First-time buyer required? | Generally required outside of targeted areas; PHFA allows exceptions in some designated areas |
| Homebuyer education | Required — PHFA-approved homebuyer counseling course |
| Owner occupancy | Required — must be primary residence |
K-FIT is one of the largest forgivable DPA programs in the country at 5% of the purchase price with no dollar cap. It can only be paired with PHFA’s own Keystone Home Loan — not with HFA Preferred, Keystone Government, or other first mortgage products. Confirm current terms at phfa.org.
Keystone Advantage Assistance Loan
Keystone Advantage is PHFA’s more flexible down payment assistance loan — it pairs with more first mortgage products than K-FIT, but is not forgivable; it must be repaid monthly over 10 years at 0% interest.
| Feature | Detail |
|---|---|
| DPA amount | Lesser of 4% of purchase price/value or $6,000 |
| Structure | 0% interest second mortgage, amortized and repaid monthly over 10 years |
| Forgiveness | None — this loan is repaid in full, unlike K-FIT |
| Eligible first mortgages | HFA Preferred, Keystone Government Loan, or Keystone Home Loan |
| Min credit score | 660 |
| First-time buyer | Generally required outside of targeted areas |
HOMEstead and the PHFA Grant
PHFA offers two additional assistance options that serve different situations: HOMEstead, a larger forgivable loan available only in specific counties, and the PHFA Grant, a small non-repayable grant for buyers using HFA Preferred.
- HOMEstead: Provides up to $10,000 (minimum loan amount $1,000) as a 0% interest second mortgage, forgiven 20% per year over 5 years. Income and purchase price limits vary by county. Philadelphia and several other counties are excluded because they receive their own separate federal HOME allocation directly.
- PHFA Grant: A flat $500 grant that never needs to be repaid — the simplest PHFA assistance option, but only available when paired with an HFA Preferred (Lo MI) first mortgage.
These programs have specific income limits, purchase price limits, and geographic restrictions that vary by county. Check with a PHFA-participating lender for current program availability and terms in your specific county.
Income and Purchase Price Limits
| Program | Income Limit | Purchase Price Limit | Geography |
|---|---|---|---|
| K-FIT | Set by PHFA, varies by county | Varies by county | Statewide (Keystone Home Loan required) |
| Keystone Advantage | Set by PHFA, varies by county | Varies by county | Statewide |
| HOMEstead | Varies by county | Varies by county | Most counties except Philadelphia and several others with separate federal allocations |
Pennsylvania Down Payment Assistance Eligibility Requirements
To qualify for K-FIT, Keystone Advantage, or Pennsylvania’s other PHFA DPA programs, buyers generally must meet the following requirements:
- Credit score: Minimum 660 for K-FIT and Keystone Advantage
- Owner-occupancy: Must live in the home as a primary residence
- Income limits: Household income must be at or below PHFA’s published limit for the specific county and program
- Homebuyer education: Required for PHFA down payment assistance programs — a PHFA-approved homebuyer counseling course must be completed before closing
- Participating lender: Must use a PHFA-participating lender — not all Pennsylvania lenders offer PHFA programs
- First-time buyer status: Generally required for most PHFA DPA programs outside of targeted areas
Combining DPA programs: K-FIT, Keystone Advantage, and HOMEstead generally cannot be combined with each other on the same loan, since each is structured as its own second mortgage tied to a specific first mortgage product. Ask your PHFA-participating lender which single program offers the best terms for your situation.
Step-by-Step Buying Process for Pennsylvania First-Time Home Buyers
| Step | What to Do | Notes |
|---|---|---|
| 1 | Check your credit score | You need at least 660 for K-FIT and Keystone Advantage. |
| 2 | Find a PHFA-participating lender | Not all Pennsylvania lenders offer PHFA programs. Ask specifically about K-FIT and Keystone Advantage eligibility. |
| 3 | Complete homebuyer education | Required for PHFA down payment assistance. Complete a PHFA-approved counseling course before closing. |
| 4 | Get pre-approved | Your lender calculates your maximum loan amount and determines which PHFA programs you qualify for. |
| 5 | Make an offer | Your real estate agent will guide you through the Pennsylvania agreement of sale and disclosures. |
| 6 | Complete due diligence period | Negotiate inspection contingencies and any repairs or credits per your agreement of sale. |
| 7 | Close on your home | Attorney-conducted or attorney-reviewed closings are common in much of Pennsylvania. Review your Closing Disclosure and sign documents, and budget for the realty transfer tax due at recording. |
